For agrifood group MHP, poultry production is proceeding at full capacity in Ukraine, according to its latest report covering the second quarter and first half of the 2021 fiscal year.
At more than 190,900 metric tons (mt), poultry production for the latest three-month period is up 5% year-on-year, and 13% above the previous quarter. Output for the half-year was down from the corresponding figure last year at around 357,500mt.
2021: adaptations to business challenges
Over the past year, MHP’s operations have faced the dual challenges of avian influenza and the coronavirus (COVID-19) pandemic. The former led to a halt of poultry exports to the European Union during the first quarter of 2021, while the pandemic disrupted both the domestic market and international trade.
Among the mitigations adopted by the company was to increase production of smaller chickens, and exports to the Middle East and North Africa (MENA). To achieve this, a higher proportion of birds were thinned in the first and second quarters of this year than in the corresponding period of 2020. This amounted to 56% in the first three months of the year (compared with 25% in 2020). In the latest quarter of this year, 47% of birds were thinned — up from 37% in the corresponding period of last year.
Shifting patterns in Ukrainian poultry sales, prices
This shift towards a greater focus in export sales is reflected in a growing proportion of MHP’s poultry meat sales for the first six months of 2021. At around 191,300mt for the half-year just closed, export sales were 12% up year-on-year, while domestic sales in Ukraine were down 8% at almost 144,900mt. For the second quarter, these changes were an increase of 23%, and a decline of 12%, respectively.
For MHP, significant increases were achieved on selling prices of its Ukrainian-produced chicken, both on the domestic and overseas markets. This amounted to a 42% higher average price for its Ukrainian sales (in local currency) in the latest quarter. The firm attributes this price development to a relative fall in sales of lower-value products (frozen meat and mechanically deboned meat, MDM), and to a “substantial” increase in production costs.
According to MHP, strong growth in sales of smaller birds to the MENA region and generally positive price for whole birds underpinned a 25% increase in the average price of its exports (in US dollars) for the second quarter of 2021 compared to the corresponding period in 2020.
Steady developments in meat processing and convenience food businesses
For MHP’s meat processing business in Ukraine, sales of sausages and smoked meats over the latest three- and six-month periods were lower — by 2% and 3%, respectively —than in the comparative periods of 2020. Average prices in local currency, however, rose by 14% and 12%, respectively, year-on-year.
At almost 4,500mt, third-party sales of the firm’s convenience foods in the second quarter of 2021 were 3% higher in volume than a year earlier. Average price for these sales was up by 32%. MHP attributes this development to due to a shift in product mix towards higher-value products, as well as the start of cooperation with McDonalds Ukraine during this period. Compared to the same period of last year, sales for this business were 2% higher at more than 8,660mt, while the average price was up by 18%.
Perutnina Ptuj pursues growth strategy
So far in 2021, MHP’s European operation Perutnina Ptuj has been achieving success in its strategy to increase poultry production.
Based in Slovenia and with operations in other Balkans countries, this company produces chicken and turkey meat.
At just over 19,500mt for the latest three-month period, sales volume is 23% higher year-on-year. For the half-year, the change amounts to growth of 15%. Average selling prices for poultry were hardly changed compared to the corresponding periods of 2020.
For the company’s processed meat products — mainly sausages and convenience foods — sales volume to third parties increased by 5% year-on-year for the latest quarter, and by 2% for the half-year. Total sales amounted to around 9,870mt and just over 19,000mt, respectively. Compared to the corresponding periods of 2020, average prices (in Euros) were higher by 4% in the second quarter, and by 1% for the half-year.
Commenting on the latest report, MHP attributes these stable trends to the easing of COVID restrictions in the European Union, and to generally improved market conditions.
More on MHP
With annual slaughterings last year estimated at 478 million birds, MHP (formerly Myronivsky Hliboproduct) is now the second largest poultry company in Europe, according to the WATTPoultry.com Top Poultry Companies database.
Accounting for approximately 30% of all industrially produced chicken meat consumed in the country in 2019, MHP is the leading poultry producer in Ukraine. The group exports chicken products to more than 80 countries, and poultry accounts for about 50% of the company’s total revenue. Other significant businesses include grain and oilseed production.
Earlier this month, MHP set out its progress on sustainability during 2020, and its goals for 2021. Animal welfare and food safety continue to be key focus areas, highlighted the executive chairman of the company’s board.
