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Ukraine chicken giant MHP placed to exploit no-deal Brexit

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Ukraine’s MHP may prove a beneficiary of Brexit, if the UK quits the European Union without a deal, with the chicken group saying that it is preparing to exploit any fallout on poultry trading.

 

The Kiev-based poultry producer, which is listed in London, said that if a so-called “hard” Brexit, undertaken without a trade deal, disrupts UK-EU poultry trade, Ukraine looked likely to pick up trade

 

“In case of a hard Brexit, Ukraine will be the only opportunity for [the] UK to get imported fresh chicken with substantial volume outside of [the] EU,” MHP said.

 

UK and Ukraine governments were in talks on a trade deal which London “has already declared… as a top priority”.

 

‘Interesting option’

Sergey Ivanov, the MHP commercial director, told investors that if the UK indeed undertook a hard Brexit, “which is likely”, it was “an interesting option” in terms of the potential for switching import demand to Ukraine.

 

“That’s the only way [for the UK] to get fresh chicken meat outside Europe,” he said.

 

“If a hard Brexit happens, we are working on this option, and we understand how we’re going to move in this direction.”

 

The UK is an importer in particular of breast meat, while exporting brown meat, which is not so popular with Britons.

 

The UK in 2017 imported 867,000 tonnes of poultry meat, the great majority from the EU, including more than 220,000 tonnes from the Netherlands alone, although Brazil and Thailand represented notable origins of processed meat, at 41,000 tonnes and 138,000 tonnes respectively.

 

The UK has announced tariffs of up to E61.80 per 100 kilogrammes on chicken imports in the case of a no-deal Brexit.

 

Export markets

The comments came as MHP revealed plans including a further increase in exports, which it forecast reaching 360,000 tonnes this year, up 25% from 2018, with further growth to 440,000 tonnes by 2023-24.

 

This expansion was expected to be led by the Middle East and North Africa market, forecasting accounting for 160,000 tonnes in 2023-24, up from 120,000 tonnes this year, when it will become the top destination for MHP shipments, and 97,000 tonnes in 2018.

 

Exports to Europe were seen growing to 130,000 tonnes next year, after only marginal growth, of 3,000 tonnes to 105,000 tonnes in 2019.

 

European acquisitions?

Viktoria Kapelyushnaya, the MHP finance director, added that the group could also expand in Europe through deals, saying that the group “will continue looking at particular interesting M&A in Europe”.

 

This despite the “high debt” incurred purchasing Slovenia-based Perutnina Ptuj earlier this year.

 

The group also revealed the potential for purchasing land in Ukraine, taking advantage of liberalisation being discussed by the country’s parliament, for potential approval by December 1.

 

MHP currently controls 375,000 hectares of land, out of the country’s 41.5m-hecare landbank.

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