PrJSC MHP: Difference between revisions

The PrJSC MHP (Ukrainian: ПрАТ МХП; PrJSC «MHP»^[1]) is a leading international food & agrotech company with headquarters in Kyiv, Ukraine. It is the leading producer of poultry and culinary products in Ukraine and one of the leaders in poultry production and meat processing in the Balkans through its Perutnina Ptuj facilities. The MHP company is also one of the largest grain producers in Ukraine a leading processed-meat producer in Ukraine and the leading biogas producer in Ukraine.^[2][3]

The MHP owns and operates a number of food brands, including domestic "Nasha Ryaba", "Apetytna", "Lehko!", "Bashchynskyi", "LaStrava", "Skott Smeat", "RyabChick", "Home style chicken", "Ukrainian Chicken","Kurator", and international food brands "Qualiko", "Sultanah", "Assilah", “Al-Hassanat” and other.^[4]

The founder and the CEO of MHP is Yuriy Kosiuk.^[5][6]

MHP posted net profit in 2017 was $230 million, which was 3.3 times up from 2016^[7] which is produced at Myronivka chicken farm in Stepantsi village, Cherkasy Raion, Cherkasy Oblast. International brands include "Qualiko", "Ukrainian chicken", "Assilah", "Sultanah", and "Chateau Galicia".

In July 2019, the Serbian Commission for Protection of Competition has allowed Myronivsky Hliboproduct (MHP) to acquire Perutnina Ptuj (Slovenia).^[8]

MHP has the greatest market share and highest brand recognition for its products. MHP owns and operates each of the key stages of chicken production processes, from feed grains and fodder production to egg hatching and grow out to processing, marketing, distribution and sales (including through MHP's franchise outlets). Complete vertical integration practically eliminates MHP’s exposure to raw material price fluctuations since its grain production exceeds internal consumption requirements, allowing the Company to be an important participant in the international commodity trade. In addition to cost efficiency, vertical integration also enables MHP to maintain strict biosecurity and to control the quality of its inputs and the resulting quality and consistency of its products all the way to the point of sale. To support its sales, MHP maintains a distribution network consisting of nine distribution and logistical centers within major Ukrainian cities. MHP uses its own truck fleet to distribute its products, reducing overall transportation costs and delivery times. MHP also has a leading grain cultivation business growing corn, soya and sunflower to support the vertical integration of its chicken production and increasingly other grains, such as wheat and rape, for sale to third parties. MHP leases agricultural land located primarily in the highly fertile black soil regions of Ukraine.^[9][10]

In July 2019, the Serbian Commission for Protection of Competition has allowed MHP to acquire Slovenian Perutnina Ptuj (PP). PP is one of leading companies, poultry & meat-processing producer in the Balkans^[11], with production sites in four Balkan countries: Slovenia, Croatia, Serbia, Bosnia and Herzegovina. PP owns distribution companies in Austria, Macedonia and Romania and supplies products to fifteen countries in Europe. PP is vertically integrated across all states of chicken meat production - feed, hatching eggs production and hatching, breeding, slaughtering, sausage production and further poultry processing

The Group is organized into and operates through four business segments: Poultry and Related Operations; Grain Growing Operations; Meat-Processing and Other Agricultural Operations; and the European Operating Segment

The Poultry & Related Operations Segment produces, processes and sells chicken meat (fresh and frozen), culinary products (marinated, ready-to-cook and value-added products), vegetable oils (sunflower and soybean), and mixed fodder. It includes three chicken meat complexes, two breeding complexes, three sunflower oil plants, one soybean crushing plant, three feed mills and two biogas complexes.^[12]

Grain growing: MHP is one of the leading grain cultivation businesses in Ukraine. The Segment grows corn, sunflower and soybean as well as other grains including rape and wheat, both for fodder production to support the vertical integration of its chicken production, and to export for sale to third parties, thereby providing one of the Group’s sources of hard currency revenue. MHP leases agricultural land located primarily in the highly fertile black soil regions of Ukraine. In 2021 MHP’s total landbank constituted approximately 361,000 hectares of land.^[13][12]

The Meat-Processing & Other Agricultural Operations Segment produces and sells sausage, salami, convenience foods and produce from cattle and dairy operations. It incorporates two facilities for the production of prepared meat products, a number of cattle farms and and a beef processing facility (Scott Smeat, acquired in 2021^[14]). The meat-processing operations are the Segment’s core business and an important driver of the Segment’s profitability. MHP is a leader in the highly fragmented meat-processing market in Ukraine, accounting for approximately 14% of all sausage and cooked meat produced in Ukraine in 2021, with some non-branded processed-meat products exported.^[12]

MHP is transforming from a raw materials provider to an international culinary company.^[15] This evolution reflects the accelerating changes in the food production landscape as consumer preferences shift to sustainable food choices, and higher value-added and further processed products such as those in ready-to-cook and ready-to-eat ranges.

MHP made significant progress towards its strategic transformation goal both in product development and routes to market. In the domestic market (Ukraine), MHP invested around US$ 6 million to establish a new facility - Culinary Centre in Kyiv, which was opened in summer 2021. It covers 1,000m2, with facilities for new food product development, testing of recipe ingredients and products, sensory analysis and production of ready-to-eat and ready-to-heat products.^[16]

The rollout of the own “Myasomarket”, convenience stores and street food kiosks “Döner market” continued. The focus on changing consumer preferences and on the sale of value-added food (including ready-to-eat and ready-to-heat products), sold from stores close to the consumer, is a new concept for the Ukrainian market, which the MHP team has largely been developing during 2021. Including the acquisition of Lubnym`yaso LLC, a Ukrainian meat production plant, producer and seller of beef under the trade mark Scott Smeat.^[17]

MHP’s responsible business strategy is closely aligned with the UN SDGs and the Group aims to contribute constructively to positive global change.

As one of the biggest agricultural producer, MHP has its facilities in Vinnytsya, Cherkasy, Dnipropetrovska, Ivano-Frankivsk Oblasts in Ukraine and in the EU in Slovenia and the Netherlands. The most adverse impacts associated with the company's facilities work are smell of manure, air, water, and soil pollution, as well as negative impacts of company's traffic on the local areas.^[18]

In order to minimize the impacts of operations the Group employs a business models which support the circular economy and the elimination of waste in the poultry production process. At each stage of production, the waste and by-products are taken and converted into products that are either used by the Group directly or sold to third parties: manure is used to produce biogas, electricity and organic fertiliser; and granulated husks to produce clean energy, used at production sites to replace gas, and fresh bedding for chicken rearing.^[19][20]

The company was founded in 2011. Since 2012, the company has been implementing and managing sustainable energy projects including biogas complex development and exploitation.^[21][22]

In the spring of 2012 MHP began works on construction of the first biogas station on Oril-Leader poultry farm in the Dnipropetrovsk region. Already in December 2012 the company put the first fermenter into operation. In 2013 the biogas station which power was 5 MWh has been launched. At the end of 2014, the biogas plant reached its full capacity. At the end of 2019, the first stage of the Biogas Ladyzhyn complex was commissioned by Vinnytsia Poultry Farm LLC with an energy capacity of 12 MWh. This is the first biogas plant in Europe of such capacity and level of technology, which operates on chicken manure and waste from a broiler chicken processing complex.^[23][24][25]

International organizations have confirmed the effectiveness and relevance of the project in terms of environmental and safety standards. The MHP Eco Energy aims to develop and increase the efficiency of biomethane production technologies and to integrate the technology of production and biomethanization of green hydrogen as a part of a scientific consortium of the European Biogas Association.^[26][27][28]

Organic biofertilizers

Another important product of biogas complexes is organic biofertilizers, which have a high content of nutrients necessary for plants. The advantages of such organic fertilizers produced at biogas complexes of MHP are numerous, including: versatility; increasing the humus content; improvement of water and air regimes of soils; a full range of essential NPK (nitrogen, phosphorus, and potassium), macro- and microelements, organic compounds that improve the structure of the soil, and humic acids.

MHP continues to lead the industry in green energy pioneering a sustainable agriculture model through new technologies like biogas and other alternative energy sources.^[29]

One of the MHP’s main environmental priorities is to reduce the consumption of water. All of MHP’s water use is regularly monitored and metering units are subject to regular inspection and maintenance. Despite the increase in poultry production by 3% and the expansion of the Group, in 2021 there was a reduction in water use in Ukraine in 2021.^[30]

MHP is also constantly working on developing the use of leading technology in its treatment of wastewater. In Ukraine, during 2021, the quality of treated water discharged fully complied with the required regulatory standards. All MHP enterprises strictly adhere to current regulatory requirements. ^[30]

In media there was a discussion on one of the MHP facilities are located near Kaniv, Cherkaska Oblast. Activists claimed that water utilized and contaminated during the production process flowed to Rosava river. Research of MHP with Cherkasy State Technological University found no pollution caused by MHP in the river near its operations in Cherkasy oblast.

Cherkasy University has modern labs, and its students undergo internships at leading enterprises of the Cherkasy region and Ukraine.^[30]

Furthermore, MHP installed modern wastewater treatment facilities, manufactured by the Dutch producer Nijhuis Water Technologies. The company facilities in the region are subjected to state supervision, which is carried out by the State Environmental Inspectorate of Ukraine and the State Consumer Service of the Cherkasy region. In addition, full-time ecologists and the laboratory that operates at MHP’s sewage treatment plants carry out internal control.^[31]

• Alex Morgun (20 July 2015). "Nasha Ryaba (MHP's brand) boosted chicken exports by 47% in 2015". UkrAgroConsult. Retrieved 14 May 2018.

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