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Yuriy Kosiuk


location for its factory and find skilled personnel - the lack of which really exists and can be a problem.”


UBI: Some years ago you started to develop you own franchising chain of outlets. Is it a good channel for selling? YK: “It is very effective. We started to build the chain in 2003 as that was the only way to teach Ukrainians to eat fresh meat because people had thought that poultry should be frozen. Today we operate about three thousand retail outlets throughout Ukraine and these account for about 40% of our total sales. The product offering extends beyond poultry to include processed meat products and sausages.”


UBI: How is your sales operation organised? YK: “We do not work with the distribution companies and we operate the service ourselves using our own transport from the factory to the shop shelves. We took this step because of the low level of service and lack of expertise offered by local distribution companies. We also work on the principle that if you want to do something well, do it yourself. We also developed logistics services ourselves and prefer to build our own warehouses because of the lack of quality alternatives.”


UBI: What changes would you like to see in legislation to make your operation easier? YK: “We do not need any changes. The only thing is to leave everything as it is because all the rules now operating in the meat market work and are honest and that is enough to be successful. Frequent changes in regulation are catastrophic for agriculture.”


UBI: What is the progress in your activities in the beef sector? YK: We have been disappointed in this product, because there is no customer culture in Ukraine to use beef as an unprocessed product. I do not believe there is currently a viable market for ‘red meat’ production. So we have reduced our capacity by two thirds.”


UBI: Is the production of goose liver an attractive market? YK: “It has good export prospects in Russia


and the European Union countries. That is why we have not reduced production volumes. Today we deliver 50% of our output to the retail market and 50% to the HoReCa sector.”


UBI: What about the sausage goods market? YK: “It is also successful. We are the leader in this segment and control about 10% of the Ukrainian market.”


UBI: Are you interested in developing other processing businesses? YK: No. We have to grow in those market segments where we are currently operating.”


UBI: Which areas are your most profitable products? YK: “Our profit levels have reduced significantly, and if some years ago it was about 30%, today it is about 20% - even though we have kept our costs


Poultry market size (thousand birds) Region


Ukraine


Autonomous republic of Crimea Vinnietska Volunska


Dnipropetrovska Donetska


Zhitomyrska Zakarpatska Zaporizka


Ivano-Frankivska Kyivska


Kirivogradska Luganska Lvivska


Mykolaivska Odeska


Poltavska Rivnenska Sumska


Ternopilska Kharkivska Khersonska Khelnytska Cherkasska Chernivetska Chernigivska


2009


226543.3 12377.8 11204.7 7092.6


17881.8 17331.9 6618.3 4668.8 6170


6122.7 23056 6014.4 6499.9 10871 4493.8 7420.9 7463.5 7263.2 5371.2 5665.3


11327.1 6449.2 4770.3


21546.6 3883.5 4978.8


down thanks to new technology and professional management. If the profit level is less than 15% there is no need to operate a business and it is better to put your deposit in the bank. All our sectors have roughly equal profit levels.”


UBI: Are you planning to expand your agriculture sector? You have said that you were going to increase your land plots from 180 to 250 thousand hectares. YK: “I think that we will rent the bigger plots that you refer to, located in the regions the company traditionally operates in, Cherkassy and Vinnytsia (the central Ukraine – UBI) and look at some western and northern regions. We are also focused on export of sunflower oil and our company is the third biggest exporter of this product. It helps to ensure our exchange rate risk and supply our poultry factories with protein and husks.” UBi


2010


235150.6 13289.4 12529.4 6650.2


18654.3 18001.5 7008.9 4730.3 6109.3 6478.7


22312.5 6265.5 6208.8


11249.7 4745.5 7481.3 6745.9 7630.1 5526.8 5652.7


11326.8 6587.1 4999.3


26020.6 4192.1 4753.9


2010 in % to 2009 103.8


107.4 111.8 93.8


104.3 103.9 105.9 101.3 99


105.8 96.8


104.2 95.5


103.5 105.6 100.8 90.4


105.1 102.9 99.8 100


102.1 104.8 120.8 107.9 95.5


* to the 1st of August Source: Association “Alliance of breeders of Ukraine” October/November 2010 UkraineBusiness insight 11


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