Avangardco’s egg production stays strong despite crisis

Avangardco egg production stays strong despite crisis

Avangardco, the largest producer of shell eggs and egg products in Ukraine and number one producer in Eurasia has announced a positive trading update for the first six months of 2014.

“Despite the current situation in Ukraine, the company managed to achieve good production results during the reporting period,” Irina Marchenko, CEO commented.

“The company increased shell egg production by 9% to 3.7 billion pieces and processed one-third of this production into dry egg products increasing dry egg products output by 58% to 14,000 tons. Exports of shell eggs and dry egg products in egg equivalent rose by 56% to 1.2 billion pieces.

Ukraine crisis

“As previously announced, as a consequence of the Crimea annexation and the ongoing military conflict in the Eastern Ukraine, the company decided to suspend operation of its facilities in the Crimea, and to limit the use of poultry farms in the Donetsk and Lugansk regions and has actively decided not to renew poultry flock in these poultry farms until the situation in the region stabilises.

“It is important to emphasise that all the company’s enterprises in the Donetsk and Lugansk regions, except for the Vyhlehirskyi feed mill, continue to operate in the normal operation mode.

“The management hopes that the situation in the Eastern Ukraine will eventually return to normal and become peaceful again and is making every effort to minimise its negative impact on the company and its results.”

Vyhlehirskyi feed mill

All activity remains suspended at the Vyhlehirskyi feed mill. Since the occupation by armed individuals overnight on July 18, 2014, the deliveries of feed to poultry farms in the Donetsk and Lugansk regions have been carried out from the Volnovakha feed mill, which has enough capacity to meet demand.

Currently, the company has no problems with the supplies of feed to the enterprises in the Eastern region. Poultry farms in the Kharkiv region purchase feed from the third parties.

Poultry flock

As at June 30, 2014 the total poultry flock increased by 1% year-on-year and amounted to 30.7 million heads. The number of laying hens remained unchanged at 22.8 million heads.

As at June, 30 2014, the laying hens flock at the poultry farms in the Donetsk and Lugansk regions decreased and amounted to 13% of the total Company’s laying hens flock due to the Company’s decision not to renew the flock at these sites.

Shell Egg Segment

In the first half of 2014, the production volume of shell eggs increased by 9% year-on-year to 3.680 billion pieces. As a result of the increase in the share of shell egg processing, sales to external customers were down by 4% year-on-year to 2.402 billion pieces.

The company continues to strengthen its presence in existing sales channels increasing the share of exports and sales to supermarkets.

In the first half of 2014, the share of shell egg sales through supermarkets reached 37% of total sales to third parties. In the first half of 2014, exports of shell eggs increased by 28% year-on-year to 308 million pieces. During the reporting period, shell eggs were mainly exported to the Middle East and North Africa, Central and West Africa, and the CIS countries.