Germany’s leading meat processor Tönnies Lebensmittel has agreed to take over up to ten state-owned pig breeding businesses in Serbia, giving the company an additional supply capacity of up to 700,000 animals.

The investment is estimated to be worth EUR300m. The goal is to breed and process up to four million pigs by 2026. This deal was initiated by Serbia’s Prime Minister Aleksandar Vucic, who met with Tönnies’ owner, Clemens Tönnies, in Belgrade last week.

Serbia’s agriculture sector is slumping, with pork production at the same level as in 1910. “If you want to process four million pigs in Serbia in ten years’ time, you have to invest in the supply chain first,” said a Tönnies spokesperson. “Hence Tönnies has agreed to help in the development of the pig breeding sector.” Tönnies has made similar investments in Russia, where it bred 600,000 pigs in 2015, aiming for a Russian production capacity of 1.5 million animals in 2017.

Tönnies specialises in butchering, providing meat as raw material to producers of sausages, hams or steaks. In Serbia, Tönnies will initially supply local abattoirs, but has a medium-term goal to build its own meat processing facilities.