MHP eyes EU expansion with Dutch processing facility

Ukraine poultry processor MHP is planning to launch its first facility in the Netherlands in the coming months, to stimulate the rise of chicken meat exports to Europe.

Anastasya Sobotuyk, head of investors and media relationships department of MHP confirmed that this will be a small investment and there will be no any production capacities, only a processing line. This should be a joint project with one of the local companies, she added.

Residence registration

The main target of the step is to obtain residence registration of the European Union (EU) which theoretically can allow a company to conduct duty-free supplies of chicken outside of the quotation system for Ukraine manufacturers.

Currently Ukraine has the right for duty-free exports of 16,000 tonnes of filet and 20,000 tonnes of other poultry parts, according to Natalia Shipigotskaya, analyst of the investment company Dragon Capital. According to her, this makes MHP look for any possible back-way in to the EU market.

Limiting poultry quotas

Taras Vysotsky CEO of Ukraine Club of Agricultural Business explains that the high fees to supply Ukraine chicken outside of quotas is not economical feasible. Ukrainian experts agree that after the launching of processing facility MHP will apply for residence registration in the EU at the same time requesting some additional quotas for delivering of poultry meat.

Meanwhile, the MHP strategy of working towards supplying the EU market has taken several other steps. The company has recently attracted Belgian cabinet DN agency for consultation on the legislative issues at the EU.

Strategic partnerships

“We have entered into a strategic partnership with cabinet DN, the leading independent public affairs and corporate communications agency in Brussels. Their expertise in EU regulatory, legislative and political developments is second to none, as is their ability to provide behind the scenes intelligence, analysis, strategy and programme delivery for clients,” the company explained.

In general, Ukraine experts suggest the country has the ability to export to the EU up to 200,000 tonnes of poultry meat per year and a large amount of eggs. In first 2 months of 2016 Ukraine companies exported nearly 35,000 tonnes of poultry to Europe, fully exhausting the quotas for this year.