MHP SE liable for over 70% of the full quantity
5 September 2024
3 minute learn
Business hen meat manufacturing dominates in Ukraine, with the family sector liable for most effective 9% of overall 2023 output. Its percentage in overall manufacturing dropped via two proportion issues in 2022 because of the Russian career of Ukrainian territories. Family manufacturing is subsistent in nature, with a small percentage of hen offered at open-air markets.
It is on a 10-year downward slope and can not compete with mass-produced hen. Spent hens, layers, and different resources of hen meat are liable for some other 3 p.c of manufacturing. Their percentage dropped via one proportion level from ranges following the destruction of a big egg manufacturing facility in southern Ukraine. Even supposing part of the hen meat steadiness, family manufacturing and different non-broiler business hen meat manufacturing may not be additional mentioned on this record as hen meat from those resources does now not participate in global business. All references to “poultry” or “hen meat” within the research under will to mass-produced pre-full-scale invasion refer hen.
Ukraine’s business hen meat manufacturing may be very concentrated, with one huge manufacturer—MHP SE— liable for over 70% of the full quantity. Every other 5 firms every regulate between one and six% of the marketplace, with the remainder percentage cut up amongst many smaller manufacturers.
Prior to the full-scale invasion, MHP SE finished a vital enlargement, focusing on larger potency, deeper poultry processing, and its personal chain of shops. The corporate reported running at complete capability in Q1 2024. MHP SE finished the scheduled redemption of all exceptional Eurobonds due in 2024, with a blended nominal price of USD 0.5 billion, which can guarantee the corporate’s clean operations during 2024 and 2025.
Maximum Ukrainian poultry manufacturing amenities are concentrated in central and western Ukraine, now not immediately suffering from Russian aggression; on the other hand, MHP reported a frozen poultry batch loss because of a missile assault in Would possibly 2024. The corporate claimed a USD 8 million loss (guide price USD 7 million) in the leased warehouse in southern Ukraine. It’s the second one huge batch loss famous via the corporate put up full-scale invasion.
After the beginning of the Russian full-scale invasion, the trade stopped making an investment in enlargement and entered “survival mode,” keeping up present manufacturing and gross sales ranges. Rooster meat manufacturers confronted a number of demanding situations, together with foreign money devaluation, a surprising intake drop because of inhabitants outflow, enter procurement issues, a scarcity of vans and bins, and conscription of employees.
An in depth description of Russian full-scale invasion-related demanding situations is equipped within the manufacturing phase of the 2023 Poultry Semi-Annual GAIN Document.
In 2024, electrical energy provides and group of workers conscription was essentially the most important issues for the poultry sector. They may irritate in 2025, slowing the manufacturing restoration procedure.
Relating to power problems, Russia intensified missile and drone assaults at the Ukrainian energy grid within the spring of 2024, inflicting extended blackouts in lots of areas. Even supposing all manufacturing and maximum processing amenities possess backup energy turbines, many don’t seem to be designed to be the only real energy supply for a protracted duration. Reliance on on-site energy technology additionally will increase manufacturing prices. In spring 2024, Ukrainian government intensified their army conscription marketing campaign, which trade resources said led to exertions shortages and manufacturing procedure interruptions.
Lowered feed prices had been some of the elements contributing to 2024 manufacturing restoration. In line with manufacturing price information printed via the Ministry of Agrarian Coverage and Meals of Ukraine, the hen meat manufacturing price dropped via USD 0.04 in 2024 to USD 0.71, essentially because of a drop in feed prices from USD 0.41 to USD 0.39.
This price lower helped Ukrainian hen meat manufacturers take care of decrease poultry costs. Business representatives are pessimistic, predicting an extra worth decline towards the top 2024. The weakening Ukrainian foreign money might supply most effective transient reduction thru boosted exports. Within the first 5 months of 2024, the industrial trade price dropped from 38.4 to 39.9 hryvnias in step with greenback, reflecting financial issues and decrease foreign currency echange reserves.
Illness unfold stays a manufacturing and export chance issue. A plague of extremely pathogenic avian influenza (HPAI) of the Н5N1 subtype took place in central Ukraine in January 2024; on the other hand, the outbreak was once some distance from number one manufacturing websites and didn’t have an effect on manufacturing. Ukraine presented poultry manufacturing zoning to mitigate imaginable dangers, receiving EU popularity. The selection of registered HPAI instances in Ukraine is considerably not up to the selection of instances in neighbouring EU international locations.