MHP eyes foreign expansion

20-01-2020 | | |
MHP-representative Anastasiya Sobotuyk. Photo: MHP
MHP-representative Anastasiya Sobotuyk. Photo: MHP

Ukrainian poultry giant MHP is looking at Saudi Arabia for acquisitions and joint venture projects to further develop its poultry and meat-processing business, Anastasiya Sobotyuk Director of Investor Relations at MHP told Poultry World. The move comes at a time when investment conditions in Ukraine are worsening.

The company is also pushing to increase production and improve effectiveness of Perutnina Ptuj – MHP’s European division with production assets in Slovenia, Bosnia and Herzegovina, Croatia and Serbia. “Our plan [with Perutnina Ptuj] is to invest in modernisation, cost optimisation and expansion of production assets during the next 3-4 years,” Sobotyuk said.

International focus

Ukraine is focused on its international business and has decided to refrain from building any new facilities in Ukraine for a time being, Yuri Kosyuk, MHP owner told local press late 2019. The company is eyeing Croatia, Slovenia and Saudi Arabia for new projects, because in these countries investors can claim for state aid, get assistance with infrastructure and soft loans, Kosyuk explained.

Ukraine alters state aid schemes

“Our appetite to grow this company remains strong and we believe there are more opportunities for MHP in our key markets, Europe and the Middle East,” Kosyuk said, speaking at a press-conference in London in 2019. Without state aid, our home country Ukraine is no longer attractive for international investors. “In the Ukraine, state aid is needed because investors have to build everything on their own, including infrastructure from scratch and all communications. In terms of attracting investors Ukraine is not competitive globally. State aid, in fact, is an investment in economic modernisation – this is a common practice in the whole world,” he added.

Also read: Ukrainian export loophole closed

Ukrainian President orders investigation into state-aid recipients

In 2018, MHP received only $ 40 million as a state aid from the Ukrainian government, almost half of what the company got the previous year. The Ukrainian government has changed the state aid schemes in 2018 targeting to cut payments to the biggest agricultural holdings. The new Ukrainian government has been sending clear signals that it is was not happy with big payouts from the national budget to MHP. Ukrainian President Volodimir Zelensky asked the law enforcement and anti-corruption agencies to conduct an investigation into the state aid MHP had received in previous years.

“In 2017-2018 MHP, one of Ukraine’s biggest agricultural holdings, received state aid to the value of UAH2.5 billion ($ 101 million). Sure enough, it doesn’t need any state aid, because it gets super-profits and annually pays huge dividends to its shareholders,” Zelensky said, speaking at a government meeting in late 2019. MHP is not building anything in Ukraine at the moment, evaluating the current situation, but is ready to continue to do so in the future, Kosyuk said.

Vladislav Vorotnikov Eastern European correspondent