Ukraine poultry producers see potential in EU market

07-01-2013 | | |
Ukraine poultry producers see potential in EU market
Ukraine poultry producers see potential in EU market

As EU authorities recently approved Ukraine poultry for the domestic market, the country’s largest companies have already expressed a desire to start active supplying chicken in the coming months. The largest market players and leading experts say that the European market will bring the Ukrainian poultry industry a strong impulse for development.

“Our company hopes to export up to 20,000 tonnes to EU markets next year, increasing our share of exports (from 20%) to 30% of total production, which itself will increase by at least 15% to 460,000 tonnes with the launch of a brand new factory in Ukraine’s Vinnytsia region,” reported Yuriy Kosyuk, CEO and majority owner of MHP, the largest poultry producer in Ukraine.

“Despite tariffs of €800 a tonne for fillets and €150-200 a ton on chicken cuts, Ukrainian poultry will be very competitive on EU markets. Our brand new, state-of-the-art factories are EU certified”.

“We are looking to diversify our sales. The European market is very interesting for us because of its high demand for value-added products, as well as fillets,” Kosyuk says, adding that MHP is looking at possible acquisitions in Europe for distribution, production and processing.

MHP is also in talks with Yum! International to become a supplier for its KFC restaurants in the region – including a chain that is expected to be rolled out in Ukraine soon.

Tamara Levchenko, analyst at Kiev-based investment bank Dragon Capital, says Ukrainian producers could in coming years export about 30,000 tonnes of poultry products to the EU annually, accounting for 4% of imports and 0.3% of the EU’s annual consumption.

While that market share is quite small, Levchenko says, the EU is a promising market for Ukraine with poultry prices about 19% higher than the current price in Ukraine of $2.17 a kilogram.

Exports, curtailed by tariffs, are expected to begin within months once technicalities are worked out. But larger volumes of chicken and eggs could be making their way to the EU if Kiev and Brussels ink a much-talked about free trade agreement next year, experts say.

Vladislav Vorotnikov Eastern European correspondent