Ukraine’s largest poultry producer, MHP, announced plans to acquire 100,000 hectares of land and additional businesses both in Ukraine and overseas.

 

The expansion of the company’s landholdings has been undertaken to meet its future demand for grains, which is expected to nearly double within the coming years as the company begins the second phase of construction on its Vinnytsia poultry farm.

 

The Vinnytsia project will ultimately double the capacity of the farm from the current 220,000 tons to 440,000 tons. The first phase of construction was completed in 2014, and the second phase, which was started in early 2015 should be completed in 2021.

 

“At the moment, there are 12 operating production sites, which rear 24 million birds during a two-month period,” said Alexander Gurov, head of the Vinnytsia site. “In future we aim to have 24 sites rearing 48 million birds during the same time frame. This, in turn, will increase the volume of processed meat and finished meat products.”

 

Because of the wide fluctuation in the value of Ukraine’s currency, the costs of the phases of construction are difficult to determine, however, based on the 2013 conversion rate, the first phase of construction cost the company more than US$750 million.

 

After a difficult 2014, the company’s financials have improved, allowing for more active investment. During the first half of 2015 the company saw net losses of US$61.2 million compared to losses of US$270 million during the same period a year before. During the first half of 2015 the company also increased its production capacity by 4% year on year to 278,430 tons.

 

The company’s supply situation has also improved. Last year it was in danger of losing its Shahtershaya poultry farms in Donetsk Oblast due to fighting in the region, forcing the company to turn to imports to secure a supply of hatching eggs. However, the company is working on resolving this issue and expects that it will be able to cease imports of hatching eggs some time in 2016.

 

The devaluation of Ukraine’s currency has also made its exports more attractive. The Vinnytsia poultry farm currently has approval to export to 64 countries, and the company is allocating between 60% and 70% of its total production, or between 13,000 tons and 14,000 tons per month to export markets.