Ovostar Union remains optimistic despite a drop in production

23-02-2023 | |
Ovostar Union manufactured 9% fewer eggs than in 2021. Photo: Bert Jansen
Ovostar Union manufactured 9% fewer eggs than in 2021. Photo: Bert Jansen

Ukraine’s major egg manufacturer, Ovostar Union, saw a decline in its flock from 8.4 million head at the end of 2021 to 7.2 million at the end of 2022. The company’s laying hens number shrank by 1 million heads to 6 million, the company said in a statement.

In 2022, Ovostar Union manufactured 1.55 billion eggs, which was 9% less than in 2021. On the domestic market, the company experienced a 6% drop in sales to 1.08 billion. However, export sales climbed from 264 million in 2021 to 290 million in 2022.

The company also reported a 15% decline in output in the processing segment. In total, 427 million eggs were processed last year.

Borys Bielikov, CEO of Ovostar Union, admitted that last year proved to be hard for the Ukrainian egg industry. “Throughout the year, the company now and again faced various challenges that urged to seek new approaches to the logistics, sales markets, production technology and overall operations,” Belikov said.

He continued to say that problems with supply chains, additional export and import regulations, internal and external migration, temporary occupation of some territories in the first half of the year, as well as worsening purchasing power and electricity cut-offs in the second half, made the company decrease its investments in the new flock and optimise other processes.

Belikov also noted that the company took steps to soften the impact of the 14% drop in the total flock, not elaborating. “At the same time, the sales volume fell by only 6% on account of, among other things, lower volumes of processing. All this, added to the favourable price dynamics observed on the world shell eggs and egg products market in the second half of 2022, makes the management content with the group’s operational results,” he added.

The industry is bouncing back

There are signs of recovery in the Ukrainian egg industry after the last year’s upheavals, Sergey Karpenko, head of the Ukrainian association of poultry producers said.

“Producers fulfilled their obligations and during the last quarter of 2022 expanded flock by 4.5 million heads of day-old-chicks, which is 25% more than in September. In January of this year, the rise in the number of laying hens continued. Accordingly, there is a gradual renewal of egg production in Ukraine,” said Karpenko.

Svetlana Litvin, an analyst of the Ukrainian Agribusiness Club, confirmed that the number of laying hens in Ukraine is on the rise. She added, however, that restoring production is a lengthy process, especially since the industry keeps suffering much pain from ongoing hostilities, in the first place, the Russian strikes on the Ukrainian energy infrastructure.

Contributors Global Poultry Sector Authors