Avangardco, the largest producer of shell eggs and egg products in Ukraine and the second largest in the world, has reported a 3.3% year on year increase in the total poultry flock in its trading update for the year ended 31 December 2011. The number of laying hens increased by 9.6%.
The Company retained its leading position in the domestic market and increased the shell egg production volume by 34.7% in 2011. This was primarily due to the increase in the number of poultry flock as well as due to improved efficiency at existing poultry farms and the commissioning of new egg production facilities.
During the reporting period, sales to external customers increased by 25% year on year to 4,862 million pieces (2010: 3,888 million pieces). In addition, the share of shell egg sales through modern retail chains (supermarkets) increased to 30% of total sales to third parties (2010: 16%). The Company’s shell eggs were sold to more than 20 large supermarkets.
The increase in sales through modern retail chains (supermarkets) is due to the relaunch of “Kvochka” – the Company’s flagship packaged egg brand – in the third quarter of 2011. In the second half of 2011 the export market environment showed some improvement, compared to the first half of the year, with increased demand for shell eggs having a positive impact on both export and domestic prices. Due to its flexible pricing and export policy the Company managed to export over 90% of its annual export volumes in the second half of the year. The Company also further strengthened its international sales team. The total export of shell eggs was 295 million pieces, an increase of 74.6% year on year. The most rapidly growing export markets were Iraq and the CIS countries, which accounted for approximately 60% and 38% of total exports, respectively. In 2011, the Company also opened up new export markets to geographies including Armenia, Turkmenistan and Azerbaijan.
In July 2011, the first stage of laying hens facilities with 3 million heads capacity was officially launched. As at December 31, 2011, these facilities were operating at over 80% of their capacity. The capacity of the facilities for laying hens is used in line with the Company’s operational plans. Both the rearing site facilities as well as the facilities for laying hens are fully compliant with the European standards (using equipment of Officine Facco & C. Spa).
In the summer of 2011, the Company’s management made a decision to increase production capacities at “Avis” and “Chornobaivske”, including capacities of the rearing and laying hens sites from 1.5 mln to 2.5 mln and from 3 mln to 5 mln heads, respectively. Production capacities for biogas are planned to be increased from 9.74 MW/h to 20.4 MW/h of electricity and from 11 MW/h to 22 MW/h of heating, respectively.
The plant for processing eggs, “Imperovo Foods”, is currently undergoing plans to increase its capacity. It is expected that the first stage of the project, namely the increase in processing capacity from 3 million to 6 million shell eggs a day, will be completed in December 2012. The second stage of the project to increase processing capacity from 6 million to 10 million shell eggs a day will be completed in July 2013.