October 20, 2010

 

Ukraine's Myronivsky Hliboproduct eyes US poultry exports

 

 

Myronivsky Hliboproduct (MHP), fresh from dropping a trade dispute against US poultry groups shipping to Ukraine, is attempting to take them on in their home market, opening talks over supplies to ready meal groups, chief executive Yuriy Kosyuk said.

 

The poultry giant, which claims to be the world's lowest price chicken producer, was meeting US buyers in London over shipments from its Ukraine plants to US convenience food makers, which face tight supplies of breast meat.

 

The move would pitch MHP against US giants such as Tyson Foods and Pilgrim's Pride, the poultry giant controlled by Brazil's JBS, although Kosyuk views third-ranked Perdue, a producer of higher-quality product, as his biggest potential competitor.

 

"They have a premium in their production of 5-7% against Tyson and anybody else," he added.

 

It will also see MHP compete against current exporters, mainly from South America, to the US.

 

However, Kosyuk believes that MHP - which achieved a 22% operating profit margin last year, nearly three times that of high-tier US performer Sanderson Farms,  according to Renaissance Capital-will be able to undercut its rivals.

 

MHP, however, undertakes all its major services in house, a factor which gives it a cost advantage, besides being a lower-cost economy, he said.

 

The Ukraine group also produces 90% of its own feed needs from farms surrounding chicken operations, avoiding transport costs, besides lowering its exposure to grain market volatility. Its facilities are also more modern than those in the US and South America, allowing it a further edge.

 

MHP, which has yet to gain US consent for its plans, a process Kosyuk saw taking potentially two years, hopes to provide breast meat to poultry groups more interested in raising margins through making convenience meals than fighting in the commodity chicken market.

 

MHP, which has a 52% share by production in the domestic market, already ships to Asia and the Middle East, has gained consent to export to Russia and is working on permission from the EU.

 

The comments come a week after Ukraine's economy ministry revealed it had approved a request by MHP to withdraw an anti-dumping complaint lodged last year against US producers exporting to Ukraine.

 

The complaint alleged that US and Brazilian imports caused a chicken glut in Ukraine, forcing down prices.