A new railway route from Europe to Asia, by-passing Russian territory, has been launched by Ukraine authorities. If successful there is great potential for poultry market expansion.
According to country officials the main aim of the initiative is to avoid the negative effect of the transit ban that Moscow authorities launched against Ukraine food production at the beginning of the year.
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"Now we are implementing an initiative that has been discussed over recent years. This is an experimental railway Ukraine - Georgia - Azerbaijan - Kazakhstan – China. We will evaluate the entire supply chain," commented Andriy Pivovarsky, the Ukraine's Minister of Infrastructure of Ukraine.
"After 2 or 3 weeks we will be able, if all goes well, to shift to the normal operating mode on the new alternative route. We are not only opening a new way from Europe to China, we are opening a new way for Ukrainian goods to those markets where we have always been very strong: Georgia, Azerbaijan and Kazakhstan, as well as to markets where our access is limited due to the transit restrictions of the Russian Federation," concluded Pivovarsky.
Poultry exports to third country's blocked
Even prior to the transit restrictions, Ukrainian companies have been repeatedly blaming Russian authorities for blocking the country's poultry export to third countries.
Last year the country exported 160,000 tonnes (t) of poultry, which accounts for almost all the country's meat exports, 18% less than in 2014, according to State Fiscal Service data. In monetary terms, exports dropped by US$50 million, to US$227 million.
New Silk Road
Ukraine claims that it has created a new Silk Road from Europe to Asia, and that the profitability should be appropriate for manufacturers.
"By February 15 we will be able to state clearly what it would cost for freight transportation of goods on this train," said the acting head of Ukraine Railways, Alexander Zavgorodniy. "If the load is full, then the train can handle 40 cars with weight of 80, 40 or 20 pounds. The number of cars depends on the capacity of the ferries that serve the Alat-Aktau line on the Caspian Sea," he added.
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Potential to increase poultry exports
Top Ukraine meat companies so far haven't commented on the possibility of sending cargo via the new train. However, most expansion plans are connected with the growth of exports.
According to the head of MHP's department for media relationships Anastasia Sobotyuk, this year the company eyes an increase in the volume of production by 45,000t and this amount will be fully available for export.