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To get a job done well – do it yourself

Ukraine remains an importer of meat despite having good agricultural land, hence the meat market is considered a very attractive sector for foreign investors, and one which is also seen as having huge potential for exports. However, it is also one of the most difficult areas in which to operate because there are so many bureaucratic obstacles and changes in legislation. UBI’s Aleksandra Nekrashchuk asked Yuriy Kosiuk, the owner of Myronivsky Hliboproduct, one of the country’s biggest agro-holding companies, to explain his view of the main changes that have occurred in this sector in the wake of the financial crisis and provide his perspectives on the country’s various agricultural sectors

UBI: What are the main trends in the meat market over the last year and during the first half of 2010? YK: “There is no market growth and each inhabitant currently consumes about 50 kilos of meat per year. But within that overall picture of the meat market we have seen several changes in customers’ choices. Four to five years ago poultry accounted for some 30 to 35% of the domestic meat market, and pork took a 35 to 40% share, but over the last year poultry’s share has increased to 50%. This trend has continued throughout 2010.”

UBI: Over the last couple of years many meat producers have complained about the volume of meat imports coming into the country, and the fact that they are often cheaper than local products. Has the situation changed this year? YK: “It’s true that in 2008 a lot of producers were complaining about the high level

of meat imports. This year the volume of meat delivered is expected to remain constant, and I would estimate that there would be about 350,000 to 400,000 tonnes imported into Ukraine. Our estimates suggest that the proportions will be as follows: 60% poultry and 40% pork.”

UBI: What are the main markets for local producers? YK: “First of all it’s the retail channel, then open markets but also the HoReCa (hotels, restaurants and cafeterias – UBI) which takes less than 5% of our sales. We do not work with processing companies much because we also have our own processing capabilities.”

UBI: The poultry market is much more competitive that other sectors of the meat market. But your company is planning to build a new poultry factory in the Vinnytsia region with capacity of 400 thousand tonnes per

year. What is the rationale behind the move? YK: “The market is really competitive, but there is an import part which we can capture without any significant problems. This factory in Vinnytsia region has four stages. Some 60% of products in the first two stages is intended to supply the domestic market and the remaining 40% will be exported. For the third and fourth stages the situation will be reversed, and then 70 to 80% of the poultry will be exported and the remaining 20 to 30% will be for the Ukrainian market.”

UBI: Do you believe that this will result in reduced prices for domestically produced meat in Ukraine? YK: “I would not say that imports need necessarily be cheaper and prices can change on one side or the other. We came across the paradox where Ukraine is one of the world’s four largest exporters of grain – the primary feedstock for cattle

October/November 2010 UkraineBusiness insight 9

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