MHP to expand poultry facilities in Ukraine and the Netherlands
Speaking at the International Economic Forum of Kiev on 7 October, Kosyuk said MHP would start to implement all these plans in 2016 and would launch the second-stage construction of the Vinitsia farm shortly.
Earlier, MHP’s CFO Victoria Kapelushnaya had suggested the company would increase the size of its capital investments from US$100–$110m in 2016 to US$150–$180m in 2017.
The company plans to expand capacity at its processing facility in Netherlands, opened in the first half of 2016, from 1,500 tonnes (t) per year currently to nearly 10,000t per year, said Kosyuk, not specifying when this expansion might happen.
He added that the poultry market in the European Union was very tough for MHP, due to high import duties and because the company was currently supplying products above the quota allowed for Ukraine by the European Commission.
According to Kosyuk, the profitability of its facility in the Netherlands is close to zero – again because of import duties – so the company is not initially making money in this venture, but is exploring new sales markets.
Vinitsia Poultry Farm is believed to be one of the largest poultry farms in Europe. Its first stage, commissioned in 2014, has a capacity of 220,000t of broiler meat per year. The second stage should have the same capacity.
According to official information from MHP, the second stage should be constructed within two to three years, so the farm will reach full operational capacity of 440,000t of broiler meat per year by 2018-2019.
However, MHP’s plans are not progressing without a hitch, since the company has faced protests from citizens and municipal authorities against its rapid expansion, which started at the end of 2015.
In particular, in December 2015, people living in the village of Chetvertinovka in Vinitsia Oblast blocked the road and started an indefinite protest against the construction of a second stage at the Vinitsia Poultry Farm. Protestors have been worried about unpleasant smells and worsening environmental conditions in the region.
Meanwhile, in November 2015, Cherkasy Regional Council member Yuri Botnari, citing opinions from the local population, requested that regional authorities take measures to stop the construction of MHP poultry farms, since it could negatively affect the water wells of the nearby city of Chigirin.
And in February 2016, a group of famous Ukrainian writers also opposed the construction of MHP farms in Cherkasy Oblast, appealing to the company to stop this initiative, since it could have harmful effects on the National Historical and Cultural Reserve Chigirin, located nearby.
Finally, in May 2016, the director of the Center of Eurasian Studies of Ukraine, Vladimir Kornilov, suggested that market participants in the Netherlands were also concerned about MHP’s expansion in the local market. Worries have also been expressed by numerous local market participants, in particular Hennie de Haan, chairman of the Dutch poultry farmers’ association.