Business news from Ukraine

OVOSTAR REDUCES EGG SALES BY 16%

Ovostar Union agricultural group of companies, one of the leading producers of eggs in Ukraine, in January-September 2019 reduced egg sales by 15.9% compared to the same period in 2018, to 888 million pieces, due to a decrease in trading activity.
According to the group’s report on the Warsaw Stock Exchange, egg production during this period declined by 0.9%, to 1.191 billion pieces.
Egg exports for the nine months of this year were down by 0.7%, to 440 million eggs. The share of exports in the total volume of egg sales was 50% compared to 42% for the same period in 2018.

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MAJORITY OF UKRAINIANS AGAINST LIFTING OF MORATORIUM ON AGRICULTURAL LAND SALES

More than half of Ukrainians do not approve of the lifting of the moratorium on agricultural land sales, and 64% believe that this issue should be resolved in a referendum, according to a study conducted by the Kyiv International Institute of Sociology (KIIS)on September 16-19, 2019. According to the survey, 52% of respondents do not approve of the instructions of President of Ukraine Volodymyr Zelensky to lift the moratorium (ban) on the sale of agricultural land until October this year and the introduction of land sale until December this year. Some 35% of those surveyed are positive about this order, while 13% of respondents had difficulty answering the question.
Some 64% of respondents believe that the issue of agricultural land sale should be solved only in an all-Ukrainian referendum, and 26% believe that the issue should be resolved by the president, the Verkhovna Rada and the Cabinet of Ministers, while 10% of respondents could not answer the question.
Director General of the Kyiv International Institute of Sociology (KIIS) Volodymyr Paniotto noted that the number of opponents of land sale has decreased over the year – 72% were against the land sale in November 2018.
The survey was conducted by CATI method (computer-assisted telephone interviews) based on a random sampling of mobile phone numbers. The sample is representative of the adult population of Ukraine (18 years and older). The sample does not include territories temporarily not controlled by the authorities of Ukraine – the Autonomous Republic of Crimea, certain areas of Donetsk and Luhansk regions. During the survey, 1,500 interviews were conducted. The sampling error with a probability of 0.95 does not exceed 2.6%.

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POLISH FASHION RETAILER LPP SEES 29.3% RISE IN SALES IN UKRAINE

Poland’s fashion retailer LPP Group, which manages the Reserved, Cropp, House, Mohito and Sinsay brands, in January-June 2019 saw a 29.3% rise in sales in Ukraine year-over-year, to PLN 194.2 million (around $49.7 million). According to the company’s financial statements, LPP total sales revenue for six months grew by 11.3%, exceeding PLN 4 billion (about $1 billion). At the same time, one of the highest sales growth pace was recorded in Ukraine.

In the first half of the year, LPP revenue abroad exceeded domestic revenues, being PLN 2 billion (49.6% of the group’s total sales). The largest volumes of foreign sales are in Russia (17.9%), the Czech Republic (5%), Ukraine (4.8%) and Romania (4.0%). Thus, the Ukrainian market for the Polish retailer remains the fourth largest in the income structure.

According to the results of the reporting period, all LPP brands showed an increase in like-for-like sales. The highest growth was seen in the stores House (double-digit) and Sinsay.

In the second half of 2019, the group plans to launch an online store in Ukraine and for all EU countries. According to the report, thanks to the launch of e-commerce in these markets in 2019, the revenue of the online channel will exceed PLN 1 billion.

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SOPHARMA FROM BULGARIA INCREASES SALES IN UKRAINE BY 35%

Sopharma AD pharmaceutical company in January-June 2019 increased sales in Ukraine by 35% compared to the same period in 2018.
The company reported that, in general, in the first half of 2019, revenue from the sales to European countries rose by 13% compared with the first half of 2018.
The main reasons for sales growth in Europe are higher sales in Ukraine, as well as in Russia, where sales in January-June grew by 7%.
As reported, in 2014 Sopharma reduced sales in Ukraine by 37%, but in 2017 the company expressed confidence in the resumption of sales growth in Ukraine.
In Ukraine, Sopharma AD has been controlling PJSC Vitamins since January 2008, and in August 2012 it established the subsidiary Sopharma Ukraine LLC (Kyiv) to optimize trading business.

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LEADING PRODUCER OF EGGS IN UKRAINE CUTS SALES BY 10%

Ovostar Union, one of the leading producers of eggs in Ukraine, in January-June 2019 reduced sales of eggs by 10.2%, to 610 million units due to a significant reduction in trade operations.
According to the company’s report posted on the website of the Warsaw Stock Exchange, the company produced 782 million eggs against 787 million units for the same period last year.
Exports grew by 14%, to 335 million eggs, thus, the share of export in the total structure of sales is estimated at 55%.
The group of companies said that the average price of eggs fell by 8.7%, to $0.063/piece compared to the same period in 2018.
As of June 30, 2019, the total number of hens at the holding was 7.6 million, which is 2.7% more than on the same date in 2018. The number of laying hens increased by 4.8%, to 6.5 million.
According to Ovostar Union, the volume of egg processing in January-June of the current year grew by 5%, to 293 million units. Production of liquid egg goods during this period rose by 19%, to 7,210 tonnes, dry egg products decreased by 8%, to 1,530 tonnes.

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MILK ALLIANCE GROUP INCREASES SALES OF DAIRY PRODUCTS BY 8%

The Milk Alliance Group in January-June 2019 increased sales of dairy products by 8% year-over-year, to UAH 2.92 billion.
“In the first half of this year, the situation was worse than planned. In particular, we processed only about 180,000 tonnes of milk against 207,000 tonnes in the same period last year,” Chairman of Milk Alliance’s Supervisory Board Serhiy Vovchenko told Interfax -Ukraine in an interview.
In the first half of 2019, the Milk Alliance increased the production of processed cheese by 19%, to 1,300 tonnes; that of ultra-pasteurized cream by 28%, to 1,300 tonnes; fermented cheese by 11%, to 2,000 tonnes; sour cream by 5%, to 5,300 tonnes; baby food products by 4%, to 5,500 tonnes. The output of milk in different types of packaging remained at last year’s level 27,000 tonnes.
“The output of fermented milk products fell slightly (by 2% to 14,700 tonnes). The production of butter and dry cheese whey fell by 30%, because, firstly, international prices of these products became unprofitable for us, and secondly, we did not make cheese products for export in the same volumes as in previous periods,” Vovchenko said.
In total, the group increased sales of dairy products for the six months of 2019 by 8%, to UAH 2.923 billion.
“We plan to slightly change the structure of capacity utilization in the second half of the year in order to make up the lost income in the first six months of the year. Thus, we should receive revenue at the level of UAH 6.2 billion,” he said.
He pointed out that the share of export earnings in Milk Alliance’s total sales now stands at 25%, the domestic market accounts for 75%.

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