April 5, 2021
MHP's EBITDA for poultry by-product processing almost doubled at start of 2021
In January 2021, MHP's earnings before interest, taxes, depreciation, and amortisation (EBITDA) in rendering (poultry by-product processing) increased by 88.8% compared to the same period of 2020, the company announced last month.
Poultry by-products are the products not intended for human consumption (skeletons, bones, brains, feathers, fat and blood). They are processed into valuable proteins, minerals and fats used in the food and feed industry, as well as in alternative energy. Despite a slight reduction in production, the company succeeded in increasing EBITDA in this area by more than 10% last year.
"2020 was a year of challenges and changes; however, it resulted in an increase in profits from the sale of rendered products due to a number of factors. Firstly, we have improved the quality of our products and stepped up to the premium quality segment of key products: meat and bone meal and fat. Secondly, against the background of the pandemic and the general shortage of proteins in the market, prices showed an increase with respect to all rendered products… a sharp rise in prices for vegetable proteins and oils was reflected in increased prices for animal proteins and fats," said Maksym Huziev, head of MHP's processed product sales department.
MHP previously expected that 100% of its poultry by-products would be disposed. In 2015, the company revised its approach and reequipped its production facilities to process by-products rather than dispose them.
Today, MHP has set a more ambitious goal: to maximise the portion of products with premium and super-premium quality which are of great value for consumers.
"We constantly communicate closely with buyers of our products and focus on the supply of the highest quality, premium products," said Vitalii Adamchuk, technical director of MHP's poultry department. "This makes it possible for us to quickly develop our processes and promptly meet the needs of buyers. Attention and competent prompt response to their demands are very important for customers. Therefore, they choose us as the main suppliers and are ready to long-term cooperation with us.
"I would also like to (add) that we constantly improve the processes at all our enterprises: we optimise, reconstruct and modernise equipment and production lines in order to reduce prime cost. The significant decrease in the prime cost of processed by-products in January 2021 also contributed to EBITDA in this area."