MHP Growth Prospects Look Strong
The vertically integrated Ukraine-based poultry company MHP looks well positioned to take advantage of the growing consumption of white meat in the country. At a time when a number of food and drink companies have found strong growth hard to come by in Central and Eastern Europe , MHP has benefited from some key trends , with annual sales growing by an average rate of 28.5% over the past five financial years.
Our Agribusiness team expects t he consumption of poultry in Ukraine to grow quite considerably on a per capita basis over our forecast period to 2017 , and we expect MHP to continue to benefit from Ukrainians ' greater appetite for white mea t as well as a growing export business. MHP's CEO Yuriy Kosyuk believes the company can become the ' meat basket of Europe ' through its export business.
With annual sales in excess of US$1bn and a leading position in Ukraine , where the fundamental outlook for poultry is positive , MHP looks well placed in its domestic market . It is arguably on the export side that the potential to truly transform the company's business lies. In December 2012, the EU agreed to allow imports of Ukrainian poultry into its 27 markets . G iven that MHP ' s exports ha ve mainly been restricted to the Commonwealth of Independent States region ( primarily Russia ) , this is a major opportunity and potentially widens MHP ' s target market by more than 500mn consumers. Moreover, t here is greater demand for higher-value products across the EU , where incomes are a lot higher . MHP's products are likely to be competitively priced , and it therefore seems particularly well placed to take advantage of the new legislation.
|Solid Outlook At Home|
|Ukraine - Poultry Production & Consumption ('000 tonnes, LHS) & Consumption Per Capita (kg)|