Other goals include the launch of poultry processing facilities in the Netherlands and an improvement in animal welfare via an agreement with Dutch company Gezondheidsdienst voor Dieren.
The Ukraine agricultural holding has struggled to improve profitability, which has been affected by the country’s ongoing crisis. Last year, according to official company data, it suffered a net loss of US$126m as a result of adverse foreign exchange rates, which was, nonetheless, 3.3 times lower than in 2013. Pre-tax profit fell by 17% to US$459m.
This year the poultry manufacturer aims to invest UAH400 million on modernising its Orel-Leader poultry farm in the Dnipropetrovsk Oblast, increasing capacity from 62,000 tonnes (t) to 92,000t per year. The investment should also enable the company to double the volume of hatching eggs at the farm, bringing it to 75 million units.
Overall, the company plans to increase production capacity by 40,000t to about 565,000t this year and reach self-sufficiency in hatching eggs. This segment of company’s operations was hurt when pro-Russian rebels seized the Shahtersky Nova poultry farm in the country’s Donetsk Oblast.
EU expansion
Anastasia Sobotyuk, head of MHP’s investor relations department, revealed that the company also plans to open a poultry processing facility in the Netherlands by the middle of this year. The company stated: “MHP plans to open a facility in the Netherlands in a joint venture with a local player. It will be a small facility with low investment.”
So far, the company has refrained from further comment, while industry observers have suggested that, with this step, MHP is hoping to increase its presence in Europe.
“The agricultural holding’s management previously looked for options to expand its presence in the EU market, as EU quotas on poultry meat exports remain small,” commented Natalia Shpygotska, an analyst at Dragon Capital. The overall quota for duty-free exports of chilled poultry amounts to 36,000t and this has already been fully supplied by Ukraine manufacturers within first two months of the year.
“This could be a new global strategy by MHP to enter into new markets,” agreed Nikolay Vernitsky, head of the investment company ProAgro. “It is easy to get access to the EU market when the company is registered in one of the EU states.”
Better animal welfare
As part of this strategy, MHP recently signed a two-year cooperation memorandum of understanding (MOU) with Netherlands firm Gezondheidsdienst voor Dieren, in a bid to ensure better animal welfare at the Ukraine company’s poultry farms.
“Gezondheid Dienst voor Dieren has not been chosen at random, as the company has worked with us for several years,” explained Sobotyuk. “GD Animal Health is a leader in Europe in terms of animal welfare and the right attitude to [agricultural animals].”
According to her, MHP currently supplies poultry to 65 countries around the world, so the issue of animal welfare is crucial and, via this step, the company has confirmed its commitment to the highest welfare standards.
“Our goals are to raise standards in poultry rearing, prevent disease and raise the qualifications of the people who work directly in production,” said Sobotyuk, adding that specialist training is one of the points referenced in the MOU with the Dutch firm.