With a 2% fall in domestic sales to 74,780t, the share of exports in the company’s total outlay reached 40% – its highest figure ever.
MHP’s press service also noted that the company did well to diversify its export sales, including at its poultry processing plant in the Netherlands and distribution centre in the UAE.
As in previous years, the Middle East was the main target for MHP’s export sales, accounting for 24% of the total, followed by Europe with a 21% share and North Africa with a 14% share.
Import restrictions
The company is retaining its high pace of export growth this year, despite outbreaks of highly pathogenic avian influenza (AI) reported in several regions at the end of 2016 and the subsequent import restrictions on imports of poultry meat by key customers, including Iraq, which accounted for 27% of Ukraine poultry exports in 2016.
MHP’s activity is driving up the overall total of Ukraine’s poultry exports, which rose 57% in the first quarter of 2017 compared to the same period in 2016, to 65,000t, according to official statistics.
Also, the country’s veterinary services have already signalled that AI-related veterinary restrictions could be lifted by May 2017, if new outbreaks do not occur.
European focus
However, it is questionable whether the country will be able to maintain this volume of export sales, as Ukraine has already used nearly half of its annual duty-free poultry export quota allowed by the EU.
MHP CEO Yuriy Kosyuk recently commented that the level of quotas for the delivery of chilled poultry meat from Ukraine to the EU, amounting to 20,000t per year, was unfair. He said this amount was extremely low and, in his opinion, a quota of around 250,000-300,000t would be reasonable. Kosyuk said the EU quota limits imposed were constraining for European customers because, without larger quantities of Ukraine chicken in the local markets, they had to pay more for poultry products.
Nevertheless, Kosyuk also revealed that MHP plans to double the value of its investment into its Vinnitsa poultry farm, from US$112 million in 2016 to US$200-250m this year.
He said that with the commissioning of a second stage at the farm, the company plans to add a capacity of 250,000t to poultry manufacturing and the need for this expansion was associated primarily with exports to Europe. He claimed that the company still has a shortage of capacity, but the expansion would enable it to offer more products to Europe.