September 20, 2010

Bulgaria's Mekom kicks off Russian export deals

Bulgarian meat firm Mekom is about to kick off exports to the Russian market, majority owner Stefan Raychev said yesterday, September 19.

"We have obtained a licence and we have struck a million-dollar contract with four major Russian companies," he said. Raychev added that the new contracts had not been planned in the firm's 2010 budget and would positively affect its financial performance.

According to Raychev, the breakthrough in the Russian market is a huge success not just for the company but also for the overall sector as not a single Bulgarian meat company has shipped to Russia since 1997.

"Getting a licence is a tough task and even many western companies cannot make it," Raychev said.

Mekom will aim to fulfil the 2,500-tonne annual meat quota granted to Bulgaria by Russia.

Other sector representatives did not confirm the figures reported by Raychev, but agreed that Russia was indeed a very difficult market to sell to. It is very attractive for meat processing firms thanks to the higher prices that provide for better profit margins for both producers and traders.

Mekom is currently targeting to raise BGN14 million (US$9.4 million/EUR 7.1 million) from the Bulgarian Stock Exchange (BSE) to pick up a portion of the tab of a BGN 34.4 million (US$23.12 million) upgrade and reconstruction of their pig farm near Silistra. The company plans to issue preferred shares with annual cumulative dividend of 18%, the highest ever offered by a Bulgarian firm. The dividend was initially set at 12% but was then boosted after it failed to ignite interest.