Butchers Clear New Frontiers

28.08.2006 Delovoy Peterburg (Business Petersburg)

"Refrigerator" market warms up. St.Petersburg importer of raw meat and meat semi-products – Rubeg Group of Companies – will build a low-temperature terminal with 20 thousand mt capacity.

Computer-aided deep-frost warehouse for raw meet storage will be located on Sofiyskaya Street, near Rubeg active sausage production facilities (97092)*. Its goods turnover will reach up to 4,000 mt per day. The terminal will probably be commissioned in the second half of 2007 (the exact terms are not finally approved yet). ZAO Rambol will act as the designer of the warehouse (39848)* (the company is known as the planner of Toyota automobile factory in Shushary). It was selected in June 2006 following results of the tender held by Rubeg. The investments volume in the project, according to the market participants’ estimations, will make over 20 MUSD.

At the moment Rubeg Group of Companies does not have its own warehouse and contract batches of raw meat are stored by outsourced companies.

Rubeg representatives refused to give detailed comments on the project.

"So far we have not decided whether we are going to render storage services to other companies or use the terminal for our needs only. Everything will depend on its occupancy," Oksana Levkovich, Rubeg GC marketer, said.

Frost is coming. Now almost 20 thousand big refrigerators with average capacity of 5 mt operate in the city; these companies only render raw materials warehousing services. All in all around 250 thousand mt can be stored by the warehouses at a time whilst the necessary capacity of the warehouses should be twice as much. Shortage of the low-temperature warehouses forced meat importers to provide themselves with own warehouses.

For instance, recently OOO Iceberg (11426)* (a part of Moscow concern GasReserve, deals with meat supplies) stated that they plan to build a logistic complex of 100,000 m² total square on Tallinskoye Shosse, at the exit from the city (the complex will include a refrigerating terminal for meat storage). And local meat supplier MeatLand L&D already has an active distribution center (refrigerator capacity – 9,000 mt). Also meat products manufacturers start local freezing chambers of smaller volume.

Despite this trend the companies specializing in rendering raw meat storage services believe they will be in demand by the market.

“Meat and fish supplies to the city keep growing, the demand keeps growing as well. Besides, old refrigerating facilities will be moved out of the city center and will not operate for a period of time”, Vladimir Danilov, CFO of OOO “Green” (owns two warehouses), is confident. Igor Yefimov, Director of ZAO Mikoyanovsky Meat Factory branch in St.Petersburg believes that there are no up-to-date refrigerating warehouses with good transport accessibility in the city. Also last week St.Petersburg branch of Moscow agroindustrial complex Cherkizovsky opened its warehouse with 100 mt storage capacity. The warehouse is located on Irinovsky Prospect. According to Rustem Hafizov, Technical Deputy Director of OOO Cherkizovsly St.Petersburg business unit, the existing warehouses in St.Petersburg do not meet the Companys requirements. “And our warehouse is fully automated, which allows to significantly reduce the period of acceptance, processing and delivery of goods”, he said.

Vasily Latenko