STRATEGY ▶▶▶
Dark clouds hang over Ukrainian egg industry
The Ukrainian egg industry has been on a dream run but there are major problems looming on the horizon. Since the outbreak of the economic crisis in 2014 many companies have been under pressure with the large Avangard agricultural holding now hitting stormy weather.
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Avangard owner Oleh Bakh ma- tyuk has tough talks with his shareholders to keep the busi- ness afloat.
BY VLADISLAV VOROTNIKOV
ver the past few years Ukrainian egg production has grown steadily, driven by increasing exports against a background of growing political and economic stability in the country. The tables may
turn with the possible bankruptcy of what was once the world’s second biggest egg producer, Avangard agricultural holding. Something which would be an unprecedented catastrophe for the entire Ukrainian agricultural industry. The economic crisis that hit the country in 2014 following Rus- sia’s annexation of Crimea, severely tested the viability of the local egg industry when Avangard reduced egg production by 46% in 2015 compared with the previous year, to 3.434 billion eggs. In 2018, the company produced just over 2.6 billion eggs, almost half of the 5.09 billion produced in 2013. The reduction in housed birds in 2015 was because farms in the east of Ukraine, located close to the conflict zone, ceased
production. Added to which the domestic demand for eggs fell due to consumers’ reduced spending power. This further reduction is believed to be associated with a cocktail of fac- tors. Avangard’s share in Ukrainian egg exports in 2018 is estimated at 46.7%. However, the strong devaluation of the Ukrainian hryvnia dur- ing the period of the economic crisis boosted revenue from ex- ports. Needless to say, Ukrainian companies have put a lot of effort into gaining a foothold on the global market. Ukraine has one of the world’s highest per capita levels of egg consumption at around 310 per person per year, according to the Interna- tional Independent Institute of Agricultural Policy. It would be difficult to raise that figure, hence the focus on exports.
Egg exports gain momentum “Ukraine is actively increasing egg exports. Over the past two years our companies have more than doubled export vol- umes. In 2016 exports amounted to 650 million eggs in total, while in 2018 this figure reached 1.79 billion eggs,” Irina Pa- lamar, chairman of the Ukraine Livestock Industry Association told Poultry World. “The increase in exports can be attributed to both the increase in production and the opening up of new sales markets. Official statistical data show that industrial egg production in Ukraine increased by 6.4% in 2018 compared with the previous year. In 2018 our companies were given the green light to start exporting to Montenegro, Serbia, Hong Kong and Singapore. For egg products we have been given
20 ▶ POULTRY WORLD | No. 2, 2020
PHOTO: VADIM UVAZHNY
PHOTO: VADIM UVAZHNY
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