KIEV, UKRAINE — MHP S.A., one of the leading agro-industrial companies in Ukraine, focusing on the production of poultry and the cultivation of grain, announced on July 9 that it has acquired Group LLC Voronezh Agro Holding, which principal operations are grain cultivation in the Voronezh region of Russia.
This acquisition adds 40,000 hectares (60% of which is in ownership), 200,000 tonnes of storage capacity and agricultural machinery to MHP's assets.
"This acquisition is the next step in the execution of our strategy of MHP's geographic diversification and expansion of our land bank,” said Yuriy Kosyuk, chief executive officer of MHP. “Our mid-term target is to increase the efficiency of the Russian entity, which will increase overall financial result of the company."
MHP is a leading producer of poultry products, and owns and operates each of the key stages of the chicken production process, from feed grains and fodder production to egg hatching and grow out to processing, marketing, distribution and sales.
Vertical integration reduces MHP's dependence on suppliers and its exposure to increases in raw material prices. In addition to cost efficiency, vertical integration also allows MHP to maintain strict biosecurity and to control the quality of its inputs and the resulting quality and consistency of its products through to the point of sale.
MHP also has a leading grain cultivation business growing corn 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 black soil regions of Ukraine.
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