In March 2017, MHP established a second processing (cutting) plant in the EU in close cooperation with one of its distributors in Eastern Europe, WE Trade s.r.o. and its subsidiaries in Slovakia. Also in March, the Board of Directors approved payment of another interim dividend of U.S.$0.7492 per share, equivalent to approximately U.S.$80 million total.
In March, MHP established its first processing (cutting) plant in the EU in close cooperation with its long-term partner Jan Zandbergen BV in Veenendaal, the Netherlands. MHP also established a trade office in the Middle East (UAE) as a part of its export strategy. Also in March, the Board of Directors approved payment of another interim dividend of U.S.$0.7529 per share, equivalent to approximately U.S.$80 million total. Since July, MHP has been self-sufficient in hatching eggs, replacing imports with internal production from its expanded and reconstructed breeding farms. MHP also opened its first oil extraction plant within “Katerinopilskiy Elevator” L.L.C. in 2016. The oil extraction plant produces enough soybean cake to entirely meet MHP’s internal needs.
During 2015, MHP repurposed its Peremoga broiler poultry farm to a breeding poultry farm. The Group has been able to replace imported eggs with the eggs hatched at Peremoga breeding poultry farm, cutting down on costs. MHP also expanded the poultry capacity at Oril Leader and Myronivka poultry farms in 2015. In Myronivka, MHP opened a new laboratory for the needs of MMPP, MFC and Myronivka. In June, MHP exchanged their equity ownership in "Voronezh Agro Holding" (approximately 40,000 ha of land and elevators for approximately 150,000 tons) in Voronezh region of the Russian Federation for the equity ownership in Agrokultura Ukraine group of companies (approximately 60,000 ha of land and elevators for approximately 90,000 tonnes) in Lviv, Ternopil and Ivano-Frankivsk regions of Ukraine. In Brussels, six MHP products received European awards of International Taste & Quality Institute (“ITQI”). All of MHP’s products submitted to the competition won awards, with superior merit awarded to MHP’s “Delicious Wing” product. In April, MHP paid the remainder of its U.S.$234 million 10.25 % senior notes due 2015, issued in 2010 and partially refinanced in 2013. The Board of Directors approved payment of an interim dividend of U.S.$0.47429 per share, equivalent to approximately U.S.$50 million total. In October 2015, MHP acquired a 100% interest in a group of companies “Dnister-Agro”, a grain growing business, cultivating a land bank of approximately 7,700 hectares in the Vinnytsia and Khmelnytsk regions of Ukraine.
In 2014, MHP completed construction and launched phase one of the Vinnytsia complex, contributing approximately 204,000 tonnes of poultry meat capacity per annum. The enterprise received export approval number from the EU authorities and started chicken exports under “Qualiko” brand. Due to the period of active hostilities at the town of Shakhtarsk (Donetsk region), Shahtarska poultry farm had to suspend its operations as of 1 August 2014 for the sake of its employees’ safety. To meet its internal needs for hatching eggs after the suspension, MHP used external reputable breeding companies from the EU, including producers in Germany and Hungary. Simultaneously, MHP begin to increase the hatching eggs production at MHP’s Starynska poultry farm to compensate for the suspension of activities at Shahtarska. In 2014, MHP took part in the largest world food product expos for the first time, including GULFOOD (Dubai, UAE) and SIAL (Paris, France). MHP also created a new “Qualiko” brand for exports to international markets. The Group’s export geography reached 50 countries in CIS, the Middle East, the EU, Asia and Africa. For the Ukrainian market, MHP also developed a new Chick & Go brand and trademark, which is a unique brand of chilled, ready-to-eat products. MHP’s first biogas station with 5MW capacity at the Orіl Leader poultry farm in the Dnipropetrovsk region reached its full capacity. The Board of Directors approved payment of the interim dividend of U.S.$ 0.757 per share, equivalent to approximately U.S.$80 million total.
In 2013, gradual construction and launch of the rearing sites at the Vinnytsia complex (phase 1, 2 lines) continued, with 7 production sites becoming operational and reaching full production capacity. The Issuer exchanged 79.7% of its outstanding 10.75% Senior Notes due 2015 and issued further notes in an amount of U.S.$750,000,000 due 2020. For the first time MHP approved a dividend policy and a payout in the amount of U.S.$1.13 per share, which was an equivalent of U.S.$120 million total. Three MHP enterprises (Myronivka, Snyatynska, MMPP) received approval numbers from the EU authorities, which allowed exports of poultry production to the EU countries. MHP acquired a land bank in Russia (approximately 40,000 hectares – “VoronezhAgro”) and in Ukraine (approximately 35,000 hectares), bringing the total MHP land bank to 330,000 hectares.
In 2012, the first phase of the Vinnytsia complex was completed and became operational. An annual production level of approximately 220,000 tonnes was reached in the middle of 2014. In April, MHP began the construction of the biogas station in the Oril Leader poultry farm with the first fermenter commencing its operation as a pilot scheme in December 2012. MHP increased its land bank by approximately 5,000 hectares of land. On 4 December the EU authorities voted to include Ukraine on the list of the third countries that have the right to export poultry products to the EU. Pursuant to the EU Regulation No. 88/2013 of 31 January 2013, Ukraine has received permission for export of poultry products into EU countries.
MHP has become once again fully self-sufficient in hatching eggs, following a period of launching Myronivka between 2008 and 2010 when MHP purchased 10-15% of its hatching eggs externally, due to the expansion of the hatching facilities at the Starynska chicken farm in light of the increased production at Myronivka. MHP continued the construction of the Vinnytsia complex. MHP cultivated 100,000 hectares of land for the first time.
In 2010, the Issuer exchanged 96.01% of its 2006 Senior Notes and issued further notes in an amount of U.S.$330,000,000 due 2015 listed on the London Stock Exchange. MHP started the construction of the Vinnytsia complex with an annual poultry production level of approximately 440,000 tonnes. MHP increased its land bank by acquiring 100,000 hectares which resulted in 280,000 hectares of land in cultivation by the end of 2010.
In June, the second stage of the Myronivka chicken farm was completed and the farm became fully operational with an annual poultry production level of approximately 220,000 tonnes. Myronivka chicken farm is currently the largest facility by production volume in Ukraine’s chicken meat sector and one of the largest poultry production facilities in Europe. In September, as part of its vertical integration strategy and in addition to the existing sunflower processing facilities at MFC, MHP opened a new sunflower processing factory at its Katerynopolsky Elevator facility which will allow MHP to meet the increased demand for sunflower protein required for the production of fodder as a result of the completion of Myronivka. The factory produces, as a by-product, additional amounts of sunflower oil for export. The factory is currently operating at full capacity of 620 tonnes of sunflower seeds per day. This allowed MHP to increase its total sunflower processing capacity by 50%. In April, the “Nasha Riaba” brand underwent a successful rebranding to maintain its appeal to its expanding customer base.
On 9 May, MHP announced the Initial Public Offering of its ordinary shares in the form of global depositary receipts (the “GDRs”) listed on the London Stock Exchange. MHP is the first Ukrainian agro-industrial company to list on the London Stock Exchange. As part of this diversification strategy, the group acquired an 80% interest in the meat-processing company, Ukrainian Bacon, to enable it to meet increasing demand for sausages and cooked meat and, as a result, expanded its range of products to include sausages and cooked meat products under the “Bashchynsky” and “Europroduct” brands. In 2008, MHP became self-sufficient in corn which is the main component of fodder for its chicken and other meat products.
The first phase of the Myronivka chicken farm started operating at the design capacity of that first phase in October 2007. It is located near Kaniv in the Cherkasy region. MHP also expanded its Starynska breeding farm and installed two new fodder production lines at its Katerynopolsky Elevator facility to ensure sufficient supply of hatching eggs and fodder to the Myronivka chicken farm.
The Issuer was incorporated on 30 May 2006, under the laws of Luxembourg to serve as the ultimate holding company for MHP. In January, MHP completed the construction of MMPP, one of the largest and most technologically advanced facilities for the production of convenience food products in Ukraine. MHP began producing chicken, beef and pork convenience food products under the “Lehko!” brand at this facility. In addition, pursuant to its strategy for increased grain production, MHP acquired a grain farm, Urozhay, and established two additional grain farming companies—Lypivka and Agrofort. MHP completed the acquisition of majority stakes in Druzhba, a producer of sausages and beef, and Crimea Fruit, which cultivates and sells apples, pears, peaches, plums, sweet cherries, grapes and strawberries. On 30 November 2006, the Issuer issued U.S.$250 million of 10.25% senior notes due 2011 listed on the London Stock Exchange.
Zernoproduct, a corn, wheat, barley and sunflower farm established in 2004 as a joint venture by Snyatynska joined the MHP group. Katerynopolsky Elevator, a fodder mill and feed grains storage facility was also added to the MHP group. These initiatives increased MHP’s control over its fodder production and allowed MHP to begin selling fodder to third parties. In May 2005, MHP established Zavod ZBV to produce pre-cast concrete panels for the construction of poultry houses. MHP commenced the construction of the Myronivka chicken farm.
As part of its vertical integration strategy, a sunflower processing factory was established at MFC to produce vegetable protein from sunflower seeds for use in mixed fodder. MHP also began selling sunflower oil, a by-product of the protein production.
The “Nasha Riaba” branded franchising programme (later a “partnership programme”) was launched. In December 2003, MHP became the first Ukrainian business to receive a loan from IFC for the expansion and modernisation of its production facilities. As part of its diversification strategy, between 2003 and 2006, MHP launched several new business initiatives, including selling and producing foie gras and goose meat products, producing pork, sausages and cooked meats, cultivating corn, sunflower, wheat, rye and other crops, and breeding and raising pedigree cattle to produce high quality beef products under MHP’s “Certified Angus” brand.
The “Nasha Riaba” brand was introduced for chilled chicken meat.
MHP began chicken production at its newly‑established Peremoga chicken farm and over the next five years developed its vertically integrated chicken production operations through the addition of two chicken farms (Druzhba Nova and Oril Leader) and two chicken breeding facilities (Starynska and Shahtarska).
MHP obtained a controlling stake in MFC, as a result of which it became one of the leading domestic grain traders in Ukraine.