Mhp Reg S Regulatory News (MHPC)

14 Sep 2009 07:00



PRESS RELEASE

September 14, 2009, Kyiv, Ukraine 

MHP S.A.New sun flower production plant 

MHP S.A. (LSE: MHPC) ("MHP" or the "Company"), one of the leading agro-industrial companies in Ukraine, focusing on the production of poultry and the cultivation of grain, is pleased to announce today the opening of a new sunflower crushing plant at its Katerinopilsky facility in Ukraine.

The plant will be used to produce two primary outputs, sunflower protein for use in MHP's poultry production facilities and sunflower oil for export and sale. A new sunflower crushing plant in Katerynopilsky will enable the Company to meet the increased demand for protein required for the production of fodder following the launch of the second phase of the Myronivka poultry farm.  The plant will also serve to strengthen further MHP's margins in the poultry sector due to the Company's high level of vertical integration. The plant is expected to generate an additional 5,800 tonnes of sunflower oil per month. The sun flower oil, produced as a by-product of the process, will be sold in the international markets and we expect to use these proceeds to service the Company's USD denominated debt. 

The plant, which has a full production capacity of 620 tonnes of sunflower seeds per day, is today operating at full capacity, which has allowed MHP to increase its total sunflower processing capacity by 50% to 600,000 tonnes per annum. 

The new plant is equipped with new state of the art machinery manufactured by Europe's leading companies, such as Schmidt Seeger, Geelen Counterflow, Andritz Sprout and Alfa Laval, which will serve to reduce the cost of production and maximise the quality of the output. The equipment for the factory is financed through long-term loans covered by ECA.

Commenting on the launch of the new plant, Yuri Kosyuk, MHP's CEO, said:

"The launch of the new plant will help us to drive further growth by increasing our sun flower oil and protein production capacity, enabling us to continue to reduce our cost base and service our USD denominated debt. This will all serve to strengthen further our position as Ukraine's leading agro-industrial business".

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About MHP

MHP was admitted to the Official List of the London Stock Exchange in May 2008. It is the leading producer of poultry products in Ukraine, with a 2008 market share for industrially produced chicken meat of approximately 39%, according to the State Committee on Statistics of Ukraine. It's "Nasha Ryaba" brand is the market leader, whilst MHP also has several other national and regional brands for processed meat products.

MHP is fully vertically integrated owning and operating 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). 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 bio-security 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 an important and expanding grain operation, producing and selling sunflower oil as a by-product of its fodder production. MHP also produces and sells beef, sausages, cooked meats convenience food products, goose meat, foie gras and fruit.