The official reason given for the move was environmental claims from a village council in the Poltava region, where the main assets of the company are based. However, Russian commentators believe the real reasons to be politically motivated.
The Belikov village council, based in the Kobelyaky district of the Poltav Region, in the west of Ukraine, has ordered BEZRK-Belgrankorm to cease any activity on the region’s territory within a month.
"In order to prevent any acts of violence and confrontation, the agricultural holding has agreed to this decision," said Paul Tereshchenko, general director of the company’s Ukrainian division, Belgrankorm-Poltava.
Belgankorm currently operates a pig farm with a capacity of 10,000t of pork per year; a processing plant, ‘Clear Dawns-Poltava’, which was carrying out the slaughter and primary processing of pork; and a crop company, ‘Gromada-Agro’, which was harvesting corn and wheat to produce compound feed, near the village of Belikov.
Belgrankorm-Poltava has been operating in Ukraine since 2011 and no previous environmental problems had been reported. The company’s profit in 2013 amounted to RUB300m (US$9m) and the Ukraine division was one of the most profitable assets of BEZRK–Belgrankorm, according to official information from the company.
However, things have changed in recent months. In March 2014 Poltava authorities created a special commission, comprising environmental inspection, sanitary and veterinary services experts, to analyse activity at the pig farm, following several reports in the Ukrainian media that villagers were complaining of an "unbearable stench" from the location.
"The farm has violated Ukraine’s environmental laws, according to which such enterprises should be located not less than two kilometres from any living area," said village council deputy Oleg Pedchenko. The council members added that it was unclear how the farm had obtained construction approval.
In February the farm’s management announced it was planning to expand production capacity. "We held talks with partners about the future expansion of the farm and Ukrainian banks were willing to finance the project. Contractors were ready to start construction, and European partners had promised an uninterrupted supply of equipment for the new complex. We planned to increase the capacity of the farm to 25,000t of meat per year – and to increase the sowing area for feed crops from 3,300 to 8,000 hectares of land," said company representatives.
Such expansion would have allowed the company to enter the list of the top 10 largest producers in Ukraine.
However, on 3 March, Poltava regional governor Alexander Udovychenko, who approved the construction of BEZRK-Belgrankorm’s farms, was replaced by Victor Bugaychuk, a representative from the nationalist party ‘Svoboda’. From Russia’s standpoint, however, this new power was responsible for initiating the expulsion of the Russian producer.