July 23, 2013
Avangard sells poultry processing assets in US to Rabin Worldwide
Ukraine's Avangard has sold its chicken processor Townsends Inc.'s assets in the US for US$5.36 million to Rabin Worldwide and expects to close the deal within a few weeks.
According to Ukraine media, the CEO of Avangard, Oleg Bakhmatyuk, had been looking for a buyer for Townsends over the last year. The company, founded in 1891, was bought by the Ukrainian business in 2011 after it had been declared bankrupt. The poultry market in the US was then in decline, but Bakhmatyuk explained that he bought the assets expecting its recovery. With the help of Townsends, the entrepreneur had been planning to establish a USA meat supply to Ukraine and Russia.
The plans to restore the work of the poultry processing plant however, failed. Due to the supply of poultry meat from South America, mainly from Brazil, the US market became oversaturated with chicken. "It should be said that this was not a very good investment," admitted Oleg Bakhmatyuk.
As a result, Bakhmatyuk has decided to "leave the US market, registering losses." According to him, the company paid US$24.9 million for the purchase of US assets and incurred losses to the amount of US$30 million.