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Ukraine’s MHP wants to lift poultry exports 20% by year-end

26 May 2015 16:45 (UTC+04:00)
Ukraine’s MHP wants to lift poultry exports 20% by year-end

By Bloomberg

Mironovskiy Hleboproduct SA, Ukraine’s biggest poultry producer, wants to boost exports of chicken meat 20 percent this year to drive revenue, Chief Financial Officer Viktoria Kapelyushnaya said.

MHP which sells poultry to about 50 countries, exports more to the European Union after Russia stopped buying its products from in February 2014, Kapelyushnaya said in a phone interview from Kiev on Tuesday.

“If we talk about volume drivers, we are replacing the Russian market with the EU and the Middle East,” Kapelyushnaya said. April and May exports have growth after export volumes decreased 14 percent from a year ago in the first quarter, she said.

Ukraine’s economy shrank almost 18 percent in the first quarter, a year after Russia wrested the Crimea peninsula and the conflict with pro-Russian separatists in the east began. More than 6,000 people have been killed in the country’s two easternmost regions, bringing a dearth in investment and a 33 percent drop in the hryvnia, the world’s worst performer, in the first three months.

MHP’s revenue decreased 22 percent in the first quarter from the same period a year ago as the hryvnia tumbled, the Kiev-based company said in an e-mailed statement on Tuesday. Exports fell 14 percent in January-March mainly because of “the macroeconomic instability in” former Soviet countries and instability in some parts of the Middle East, MHP said.

Though production rose 2.2 percent and earnings before interest, taxes, depreciation and amortization rose 16 percent, MHP posted a net loss of $292 million in the first three months of the year.

Falling Prices

Export prices for chicken meat this year, compared with 2014, may be about 5 percent lower. Domestic prices will continue rising this year on the hryvnia’s declines and more expensive inputs such as grain and natural gas.

MHP wants to get pre-export financing loans this year of as much as $200 million to finance purchases of sunflower seeds and soybeans to stock up.

The outlook for this year’s harvest is very good so far, Kapelyushnaya said.

MHP will invest around $25 million to upgrade its facility in the Cherkasy region to produce hatching eggs after the hatch- egg plant in Donetsk, controlled by pro-Russian rebels, was halted last year, Kapelyushnaya said. The company currently covers 30 percent of its hatch-egg needs with imports and plans to stop importing hatch-eggs by mid-2016.

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