Poultry industry

Ukraine increased imports of poultry products dramatically in the middle of 2008, following WTO accession. State purchases of poultry are expected to be short termed, while commercial sales of poultry will cover remaining market demand in the remaining months of 2008 and then dominate the market in 2009. The GOU trade policies will continue to be highly volatile and unpredictable, but poultry import numbers in 2009 will remain at a relatively high level. In the meantime domestic poultry production will continue to expand at 20-25 per cent rate, slowly replacing imported product.

Ukrainian domestic production of poultry continues to be highly concentrated with 2 vertically integrated companies dominating the market and controlling approximately 70 per cent of production. In the last year, both companies invested significant resources into further integration. Sizable investments went for arable land acquisitions to produce company-owned fodder crops and for processing facilities for semi-cooked poultry products. Significant resources also continued to be spent on simple expansion through newer and bigger production facilities and slaughterhouses. Production in 2008-09 is expected to grow at the same rate of 20-25 per cent a year, similar to the previous year. Production growth in 2008 came mostly from existing production facilities coming fully into operation at projected capacity.

Myronivsky Khliboproduct (Nasha Ryaba trade mark) remains the biggest and the most dynamic company on the market. In 2008, the company has finished internal restructuring increasing statuary fund by 23.4 per cent concluding the IPO process on the London Stock Exchange (LSE). The successful sale of the company’s 19.41 per cent share (arranged by UBS and Morgan Stanley) yielded $322 million. Thus the Myronovsky Khliboproduct S.A. (as named on LSE) was estimated at a relatively modest $1.7 billion, which leaves significant space for future growth. The company will continue to develop existing production sites in the rest of 2008, but plans to launch another ambitious project in 2009. The new site project at $1.3-1.5 billion, will include a new production and slaughter facility for 420,000 tonnes of poultry, combined feed facilities, sunflower and rapeseed crushing facilities as well as nine elevators with a total capacity over one million tonnes of grain. The project will end in 2015.

Agromars — the second largest poultry producer in the country — is sized well below the Myronivsky Khliboproduct and shows no signs of ambitious country-wide expansion. The company is slowly absorbing the Kurgansky Broiler after its friendly takeover in 2006 and trying to increase supplies from two major production hubs in its possession. Two remaining large poultry producers are trying to keep up with bigger competitors investing into expansion of their own production facilities (one production site per company).

See also:

Poultry industry of Ukraine

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