MHP’s capacity utilisation ratio drops to 80-85%

“Since the beginning of the Russian war in Ukraine, MHP has been facing complex challenges and disruptions, which, primarily, resulted in a decrease in capacity utilisation of poultry production to 80-85%,” the company said.

The company added that since March, due to port closures in Ukraine, MHP recorded substantially lower exports of poultry and vegetable oils. Since April, MHP has been extensively developing alternative routes to resume exports, while the company’s domestic team has also been focusing their efforts on improving poultry sales in Ukraine through logistics and sales channel optimisation.

MHP said its production dropped in April 2022 by 12% compared to April of 2021, totalling 50,501 tonnes of poultry meat. This marks a 5% increase compared to March of 2022 when production amounted to 52,746 tonnes.

Domestic sales stood at 20,738 tonnes in April 2022, 20% down on year-to-year comparison, and 26% lower than in the previous month. Exports reached 14,273 tonnes, rising by 5% compared to March 2022, but ending up 55% lower than in April 2022, MHP said.

The company has been shipping most of its wheat, chicken and vegetable oils by truck and rail to the European ports of Romania and Bulgaria since the conflict started. John Rich, chairman of MHP, recently told Forbes that the company is exporting around 1,000 tonnes of chicken per day, approaching pre-war levels, though logistics in Ukraine are still very challenging.

The average price per kg of poultry meat stood at US$1.88 in April 2022, against US$1.62 in March 2022 and US$1.6 in April 2021, the company estimated.

On the other hand, MHP temporarily suspended the operation of its Ukrainian Bacon facility in the Donetsk region due to increased hostilities.

Communications manager Anastasia Zrazhevskaya explained in a statement shared through her social media channels that a further offensive of the Russian troops in the Donetsk region increased the risks and danger to the life of the employees of this facility and made its further operation impossible.

In addition, the spring sowing campaign is completed on schedule and on budget, MHP said in the statement, adding that winter crops – wheat, barley and rapeseed – were in good condition. MHP had access to all necessary plant protection materials, pesticides and fertilizers, which were expected to be applied on time and in full.

Tags: Ukraine, Russia, exports, vegetable oils, barley, Meat, Poultry, Production, wheat, chicken, rapeseed, shipping, MHP