Chicken company rules the roost

MHP looks set to take its all-conquering poultry produce to the EU elite following the commissioning of

Ukrainian export at the end of 2012, with the company expecting to start exporting its poultry produce to EU countries in the first half of 2013.

It has taken 15 years to reach this point, despite some staggering and rapid expansion since Mr Yuriy Kosyuk founded the company in 1998. And having become the number one poultry producer in its native country, the business’s international influence

is now spreading at an equally impressive rate.

International relationshipsMHP now exports 15 percent of its chicken internationally, having formed relationships outside of the Ukraine over the past five years.

The Middle East has been a welcome exponent of this geographical growth, while 2012 also saw African nations introduced as part of the organisation’s ever-growing distribution network.

“It is a little challenging to export to these countries but it works really, really well,” said Head of

MHP

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Investor Relations and PR at MHP, Anastasiya Sobotyuk.

“Total production in 2012 was roughly 400,000 tonnes of chicken, and we expect this to grow over the next six years, with a new capacity launch.”

Vertical integrationMHP’s recent successes overseas, and imminent expansion of a similar kind, is testament to the capacity growth that the company has achieved over the past decade.

As well as the business’s well established poultry operations, MHP also pays homage to its

grain growing development which has been an integral part of the organisation since 2005.

“We established our grain growing operations, and started to cultivate land,” Yuriy Kosyuk continued. “Step by step we introduced a vertical integration business model so that we are now 100 percent vertically integrated across the whole company, starting from production of grain to production of fodder, from breeding to hatching eggs, from processing to distribution.

“From 2004 until 2007 we built a huge new complex investing more than US$500 million to increase

Written by: Matthew Staff and Produced by: Kelly Keegan >>>

Chicken company rules the roostThe entirely self efficient Ukrainian poultry producer and agricultural specialist continues to expand at a staggering rate as its sets its sights on new international markets

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MHPChicken company rules the roost

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capacity. At this time, this complex could produce more than 200,000 tonnes of chicken per annum; the biggest poultry production capacity in Ukraine.

“From 2010, we began the construction of the Vinnitsa complex which we launched by the end of 2012, and which will double our current production capacity of 400,000 tonnes in the following six years.”

“This US$1.2 billion investment into this complex is not only about poultry, but I’m talking about processing, rearing sites, fodder production, infrastructure, trucks, everything. It was for the entire vertical integration. It is a huge complex,” explained Sobotyuk.

Further to this cause, MHP’s land bank has also increased from 180,000 hectares during 2010 to around 300,000 to aid

MHP’s land bank increases self sufficiency in crop production

This US$1.2 billion expansion capex is not about only poultry, but I’m talking about processing, rearing sites, fodder production, infrastructure, trucks, everything. It was for the entire vertical integration. It is a huge complex.”— Anastasiya Sobotyuk, Head of Investor Relations and PR, MHP

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self sufficiency in the production and sale of crops. The company’s purpose is to continue land expansion, to cultivate around 500,000 hectares by 2016.

Number one“Our nearest competitor has three times less market share than our 50 percent. Competitor number three has five times less again,” continued Sobotyuk.

“We are able to sell our produce at premium price too, which is around six percent higher than the nearest competitor. People know that quality and bio-security are cornerstones for the company, and they have been with us for more than 15 years already.”

A strong emphasis on bio-security,

safety and quality control is pushed through extensive media advertising, and all of this effort, investment and expansion resulted in US$1.2 billion in revenue for 2011, and a projected US$1.4 billion for 2012.

Something newFollowing the collapse of the Soviet Union the company was brave in trying to offer a new food solution to the country quite so soon.

“It was 2000 and many enterprises in Ukraine closed their operations and it was difficult to find fresh chicken produced in Ukraine at the time,” explained Sobotyuk. “At that time most chicken was imported from the USA and it was all deeply frozen.

“When Mr Kosyuk established

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his enterprise back then, we started the commercial production of chilled chicken, which was branded and produced by the local producer. It was new to the population of Ukraine to produce not frozen, but chilled chicken, and it transformed chicken meat from a commodity to a product.”

This presented a big challenge for the company in trying to convince potential customers that this was a better way to shop, both for the industry, and the country itself.

“We sold poultry in whole or cuts, different sizes and shapes, it

MHPChicken company rules the roost

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was packed properly. People were cautious about something new appearing on the market and that’s why we made many marketing and advertising campaigns on TV explaining the difference between frozen and chilled chicken, as well as our high food safety and biosecurity standards, production control, and processing technologies.”

Employee motivationNot only did MHP succeed in its goal to win over the general population,

MHP

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Chicken company rules the roost

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Supplier Profile

but it has also become an esteemed and popular place to work for more than 25,000 employees.

“As one of the main employers in Ukraine, we strive to create a safe working environment for our employees, contributing to their professional development and taking care of their health and welfare. A special programme aimed at attracting and promoting the professional development of young people is in progress.

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MHPChicken company rules the roost

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MHP values its employees

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MHPChicken company rules the roost

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place to work with well-structured regeneration packages and well-developed health and safety policies and we feel that is very important,” Sobotyuk said.

There are also KPIs (Key Performance Indicators) in place for each section of the workforce. Remuneration packages include monthly and annual bonuses, based on the efficiency and quality of production and on employee performance. The company also provides sanctions, holiday and maternity benefits in accordance with Ukrainian legislation.

Biggest in EuropeLooking to the future and MHP’s ambition certainly isn’t dwindling.

Supplier Profile

Supplier Profile

Headquarters

T: +380 (44) 230 14 70 • E: secretary@acti.kiev.ua • 16-a, P.Sahaidachnoho Street, Ukraine, 04070, Kyiv

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MHPChicken company rules the roost

Having formed relationships with some of the industry’s biggest global producers, the company is learning from the best and aiming to emulate these strategies as it branches out into the rest of Europe.

“First of all we will definitely be one of the biggest producers not just in Ukraine but in Europe. In 2018, we will produce more than 800,000 tonnes of chicken per annum; the biggest capacity in Europe,” Sobotyuk continued.

“We are also going to cultivate more than 500,000 hectares of land, to be completely self efficient in grains as well as exporting different types of grains to the

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Supplier Profile

First of all we will definitely be one of the biggest producers not just in Ukraine but in Europe. In 2018, we will produce more than 800,000 tonnes of chicken per annum; the biggest capacity in Europe.”— Anastasiya Sobotyuk

world’s markets. “Thirdly, we have some new,

really interesting projects in operation. We opened our biogas station in 2012 using parts of chicken unused in operation. From this, we receive two products: first of all we produce gas, second we receive chicken manure. With the manure we fertilise our land and from the gas we produce electricity, hot water and cold water; all required for use in our operations.”

Striving for self efficiency and entire vertical integration, as well as an outstanding marginality of the business is what separates MHP from its rivals domestically and what is now promising to put it on the global landscape too.

Sobotyuk concluded: “Mr Kosyuk’s key philosophy is ‘if you want to do something really well, do it yourself’, and that has been a very successful philosophy for this company over the past 15 years.”

MHPChicken company rules the roost

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Poultry HousesPoultry Processing Complex

Small chicks Mature chickens

STATISTICS

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Industry: Agriculture/Food Production

Founded: 1998

Headquarters: Kyiv, Ukraine

Key PeoPle/tItles: Yuriy Kosyuk – CEO, Founder and major Shareholder

Products: Grains, poultry and meat processing operations

revenue: US$1.2 bln (2011 results), US$1.4 bln (expected 2012 results)

emPloyees: over 25,000

WebsIte: www.mhp.com.ua

Visit us online:

Poultry Houses

Roast chicken

MHP

158, Akademika Zabolotnogo Str, Kyiv, Ukraine

Tel: +38 044 207 00 00Fax: +38 044 207 00 02

office@mhp.com.ua

www.mhp.com.ua

http://digitalmediamarketing.com/

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