Business news from Ukraine

ONE OF THE LARGEST PRODUCERS OF EGGS “OVOSTAR” RECEIVES LOSSES

Ovostar Union agro-industrial group of companies, one of the leading producers of eggs and egg products in Ukraine, in January-March 2022 received $ 16.44 million in net loss against the Russian military invasion against $ 4.72 million in net profit in the first quarter of 2021, according to the message of the agrarian group on the Warsaw Stock Exchange on Tuesday.
“The egg processing plant in Makarov (Bucha district, Kyiv region) was temporarily shut down until the city was deoccupied by Ukrainian troops in late March. A subsequent inspection of the plant revealed signs of uncritical damage to administrative and industrial buildings … Management expects to resume the operation of the plant after the completion of repair work in the premises, “the company said in a report on the consequences of the Russian invasion.
Ovostar’s revenue in the first quarter of 2022 decreased by 13.7% compared to January-March 2021 – to $ 27.71 million. The gross loss of the group of companies in the first quarter of this year amounted to $ 13.38 million against $ 6.91 million gross profit in January-March 2021, also for this period it received $ 15.67 million in operating loss against $ 4.37 in operating profit last year.
In the structure of Ovostar’s revenue, 75% was accounted for by egg sales ($ 20.8 million), of which 87% ($ 18.1 million) accounted for sales in Ukraine. The egg products segment generated 25% of the agroholding’s revenue ($ 6.8 million), with 58% of its sales ($ 3.93 million) in the domestic market.
“The main sales channel of the egg segment is large national retail chains. Geographically, sales are concentrated in the central part of the country, and the share of sales in the most affected regions does not exceed 10%. Market losses in the east and south where a large number of internally displaced persons temporarily reside, “the Ovostar report said.
The document states that the assets of the agricultural holding as of March 31, 2022 decreased compared to December 31, 2012 by 18.3% to $ 115.3 million, its long-term debt decreased by 1.8 times to $ 5.8 million, and current growth – by 1% to $ 14.5 million
“Since the beginning of the Russian military campaign, the group has faced significant obstacles to export activities due to serious logistics disruptions. In particular, the blockade of the port of Odessa blocked access to Middle Eastern markets, where goods were shipped by sea. after the company was issued a special license, “the egg producer said in a statement.
Ovostar also noted its dependence on imports of certain feed additives, vaccines and spare parts for equipment, which are included in the list of critical imports and are imported into Ukraine without restrictions. The management is also looking for adequate substitutes for imported supplies on the Ukrainian market.
According to the report, as of March 31, 2022, Ovostar Union shares were owned by: Prime One Capital Limited (67.93%), controlled by Ovostar CEO Boris Belikov and Chairman of the Board Vitaly Veresenko; Generali Open Funds Emergency Fund (10.39%), Fairfax Financial Holdings Limited (10.39%), Aviva Open Funds Emergency Fund (5.02%).
Ovostar Union Group is a vertically integrated public holding company, one of the leading producers of chicken eggs and egg products in Europe. The manufacturer is a certified exporter to EU countries since 2015.
The group’s holding company is Ovostar Union N.V. in mid-June 2011 held an IPO of 25% of the shares on the Warsaw Stock Exchange and raised $ 33.2 million. The majority stake in the company is owned by Prime One Capital Limited, which is controlled by its CEO Boris Belikov and Chairman of the Board Vitaly Veresenko.

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DEMAND FOR EGGS IN UKRAINE QUADRUPLES IN MARCH

Demand for eggs quadrupled in March in the LotOK convenience store chain, demand for pet products tripled, for groceries doubled, and for tobacco products and drinks and non-alcoholic beverages almost doubled. Demand for confectionery grew 1.5 times, but demand for vegetables and bakery products remained at the same level.
Such data was given in a commentary to Interfax-Ukraine by marketing director of the LotOK store chain Olha Momchylovych.
At the same time, she said that the demand structure of large supermarkets and convenience stores is significantly different.
“If in peacetime for small stores located in residential buildings and residential complexes, the top categories of demand are tobacco products, soft drinks, confectionery, dairy products and groceries, then in the first days of the war, groceries took the top position in demand, and eggs joined the top categories,” Momchylovych said.
At the same time, demand for dairy products temporarily decreased in March, which, the expert emphasized, was the result of a disruption in supply chains.
“In April, we see almost the full recovery of milk sales,” Momchylovych said.
At the same time, she predicts, April results in terms of the structure of demand will differ from March due to the lifting of restrictions on the sale of alcohol and alcoholic beverages, as well as the resumption of operation of a number of enterprises.
“During the first ten days of April, the demand for alcohol increased almost 2.5 times, the level of demand for eggs is still at the level of March, and the demand for groceries has returned to pre-war levels,” she said.

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MEAT AND EGGS PRODUCTION DOWN IN UKRAINE

Sales of meat for slaughter (in live weight) in Ukraine in January-August 2021 decreased by 2% compared to January-August 2020, to 2.1 million tonnes, milk production – by 6.2%, to 6.04 million tonnes, eggs – by 14.5%, to 9.87 billion pieces, the State Statistics Service has reported.
According to its data, as of September 1, poultry numbers in Ukraine decreased by 1.5% compared to the same date last year, to 240.1 million birds, pigs – by 1%, to 6.09 million animals, cattle – by 6.4%, to 3.18 million animals, sheep and goats – by 5.6%, to 1.34 million animals.
The sale of poultry for slaughter by agricultural enterprises in the first eight months of this year decreased by 1.9% against January-August last year and amounted to 438.4 million birds, the sale of pigs increased by 11.6% – to 3.38 million animals, cattle – decreased by 10.3%, to 211,400 animals, sheep – by 23.3%, to 31,800 animals.
Agricultural enterprises for the same period sold 22.9% fewer eggs – 4.57 billion pieces.
The State Statistics Service clarified that in January-August 2021 the leaders in production of eggs became Kyiv region with 1.75 billion pieces (more by 0.5% against January-August 2020), Khmelnytsky – 344.4 million units (less by 35.5%), Kherson – 333.7 million units (less by 28.6%) and Dnipropetrovsk regions – 325.7 million units (less by 5.5%).
According to the statistics department, in the eight months of 2021 the most milk was produced by enterprises of Poltava – 260,700 tonnes (less by 2% compared to January-August 2020), Cherkasy – 190,400 tonnes (less by 7.3%), Kharkiv – 165,600 tonnes (more by 0.5%) and Chernihiv – 153,900 tonnes (less by 6.3%) regions.

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QATARI COMPANY LOOKING FOR PARTNERS IN UKRAINE TO PRODUCE ANIMAL FEED AND EGGS

Qatari entrepreneurs are seriously interested in investing in Ukraine, including one of the largest agricultural companies in the country, Hassad Food, which is looking for partners for the production of animal feed and eggs, the Ukrainian Chamber of Commerce and Industry (UCCI) reported on its website.
According to its data, representatives of the largest companies of Qatar arrived in Ukraine as part of a delegation to participate in the second meeting of the joint commission on economic, trade and technical cooperation between the governments of Ukraine and Qatar.
It is clarified that Ukrainian grain traders and animal feed manufacturers at a meeting with Hassad Food Executive Director Mubarak Al-Suhooti discussed prospects for cooperation.
“The international campaign Hassad Food Company invests in production in other countries. In Ukraine, in particular, they are looking for partners for the production of animal feed and eggs, so Ukrainian entrepreneurs presented their capabilities,” the UCCI said.
During the talks between President of the Ukrainian Chamber of Commerce and Industry Hennadiy Chizhikov and First Vice Chairman of the Qatar Chamber of Commerce and Industry H.E Ali bin Ahmed Al Kuwari, the latter said that Qatari entrepreneurs are considering Ukraine for investment.
Chizhikov stressed that the composition of the representatives of the Qatari delegation testifies to the serious investment interest of this country in Ukraine. He urged Ukrainian business to take advantage of trade opportunities.

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STATE FOOD SERVICE: JAPAN ALLOWS IMPORT OF UKRAINIAN POULTRY AND EGGS

Japan on August 2 lifted the ban on the export of Ukrainian poultry and eggs, introduced in December 2020 in connection with the spread of pathogenic avian influenza in Ukraine, according to a Wednesday posting on the website of the State Service for Food Safety and Consumer Protection.
“We are not only creating new export opportunities for Ukrainian companies, but also restoring access to foreign markets that were closed for one reason or another. Such closure decisions are usually made quickly, and it takes a long effort to convince partners to reopen the market. I am glad that we managed to convince the Japanese partners of the safety of Ukrainian products, and from now on Ukrainian companies can again export their products,” the authority said, citing Minister of Foreign Affairs of Ukraine Dmytro Kuleba.
The authority said that the Ukrainian side informed its Japanese partners in detail about the measures taken in Ukraine to combat outbreaks of avian influenza.

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EGGS AND MEAT PRODUCTION DECREASE IN UKRAINE IN H1

Sales of meat for slaughter (in live weight) decreased by 2.5% in Ukraine in January-June 2021, year-over-year, to 1.60 million tonnes, milk production by 5.3%, to 4.32 million tonnes, eggs by 13.6%, to 7.38 billion pieces, the State Statistics Service of Ukraine said on the website on Friday.
According to it, as of July 1, the poultry population in Ukraine decreased by 3.8%, year-over-year, to 239.2 million heads, cattle by 6.5%, to 3.23 million heads (including the number of cows decreased by 5.8%, to 1.67 million heads), sheep and goats by 5.0%, to 1.39 million heads, while the number of pigs increased by 0.7%, to 6.11 million heads.
The sale of poultry for slaughter by agricultural enterprises decreased by 0.6% in the six months of 2021 versus January-June 2020 and amounted to 325.06 million heads, the sale of pigs increased by 10.1%, to 2.51 million heads, cattle decreased by 14.2%, to 157,900 heads, sheep by 27.9%, to 24,000 heads.
Agricultural enterprises for the same period sold 21.5% fewer eggs, 3.52 billion pieces.
The State Statistics Service said that for the specified period, Kyiv region became the leaders in the production of eggs with 1.32 billion pieces (2% more year-over-year), Khmelnytska with 260 million pieces (33.2% less), Kherson with 252.3 million pieces (28.6% less) and Dnipropetrovsk regions with 249.9 million pieces (5.2% less).
According to the statistics department, in the first half of 2021 most milk was produced by the enterprises of Poltava some 195,800 tonnes (1% less year-over-year), Cherkasy some 143,200 tonnes (5.1% less), Kharkiv some 123,200 tonnes (1.7% more) and Chernihiv some 115,100 tonnes (7.0% less).

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