Changes at the top of Russian turkey market

Eurodon, traditionally Russia’s largest producer of turkey meat has lost its market leadership in terms of production performance, having been overtook by poultry producer, Damate.

According to a market study by consulting firm Agrifood Strategies, within the first 9 months of 2016, Damate manufactured 44,500 tonnes of turkey meat versus the 39,200 tonnes produced at the facilities of Eurodon.

Investment in production capacities

Over the past few years, Damate has heavily invested in new production capacities and in 2016 launched a new production complex with an overall capacity of 60,000 tonnes per year, hence bringing the company’s overall performance to 5,500 tonnes per month, Damate’s CEO Rashid Khairov said to local media Agroinvestor.

Data from the Russian Union of Poultry Producers (Rosptizesoyuz) suggests that both companies have already exceeded the overall volume of production of 2015, when Eurodon produced 38,000 tonnes of turkey meat and Damate – 34,700 tonnes.

Turkey meat production growth

President of Rosptizesoyuz, Vladimir Fisinin, told participants at a recent poultry show in Moscow that last year Russian producers manufactured 149,500 tonnes of turkey meat in slaughter weight, a 34.9% increase compared to 2014.

In 2016, the overall volume of production should reach 170,000-180,000 tonnes, Fisinin suggested. By the end of 2016, Eurodon should produce 43,400 tonnes of turkey, while Damate 49,700 tonnes.

However, next year market situation should change, as Eurodon will launch new a facility bringing production performance to 66,100 tonnes, while Damate most likely will produce 60,800 tonnes, Rosptizesoyuz forecasts say. Both companies are eyeing a production output of 100,000 tonnes by 2018.

Continued investment in the turkey sector

In early October Damate obtained a new loan of the overall amount of RUB 12.8 billion (US$ 210 million) for the construction of a new production complex within the coming years. Given this investment, the overall amount of money Damate has pumped into the turkey segment reaches RUB 25.6 billion (US$ 420 million), according to the company’s estimations.

Eurodon has also stated its intent to not only increase its volume of production, but also to boost market share, from the current 30% to nearly 35% within coming years.

Turkey market has reached self sufficiency

However, it seems that both companies have no further place to grow, since the Russian turkey market has already reached self-sufficiency. With overall consumption at 180,000 tonnes, imports amounted to only 2,000 tonnes in the period of January-September of 2016.

In this situation, major market participants started to apply for export supplies and already this year it may reach 400 tonnes, Agrifood Strategies data suggests. In particular, Damate has already launched exports of turkey to Egypt, also receiving the approval of veterinary and religious authorities of the United Arab Emirates for first supplies.

According to the company’s executives promising markets for Russian turkey at the moment are also Hong Kong, Vietnam, Serbia and the countries of West Africa.