Oleh Bakhmatiuk, the owner of Ukrlandfarming, the largest Ukrainian agroholding, has decided to sell assets in domestic bird processing acquired in 2011.
“We won’t launch [production in the United States], we’ll put [the assets] up for sale, it does not matter how much will be paid for the assets,” he told reporters in Kyiv on March 30, 2013, adding that there is a certain amount of interest in the assets.
As reported, Townsends, in a process initiated under the U.S. Bankruptcy Code, agreed with Ukrlandfarming on the sale of its subdivision in North Carolina, the headquarters in Georgetown (Delaware) and other assets for $24.9 million.
The owner of Ukrlandfarming said that he bought the assets expecting that the domestic production market in the United States would revive, although due to actions of Brazilian and other South American producers the poultry market in the United States has become oversaturated.
“The market has not revived,” he said.
Bakhmatiuk said that after the acquisition of the U.S. assets he sent funds there to pay for current liabilities, and at present a bankruptcy procedure has been announced to finish the processes.
Asked about the fate of the sugar business, which is part of Ukrlandfarming, the owner of the company said that he does not plan to put it up for sale, expecting that the market will revive in the medium term outlook: under the optimistic scenario from 2014 and anticipating that the price of gas will fall.
He said that expectations for 2013 are negative, as the situation on the foreign market without state support continues to put pressure on domestic prices. Bakhmatiuk said that the group is considering a reduction in sugar production in the coming season by two times, from 230,000 tonnes at the end of the previous season, when only the two refineries of the holding out six worked.
Commenting on the livestock and meat processing business of Ukrlandfarming, he said that without state support investment in the segment, it is less profitable compared to investment in crop planting. He added that the permanent unpredictable claims of Russia affected the current situation, when only eight out of 19 meat processing factories of the holding and one of the two tanneries are operating. Bakhmatiuk said that profitability of exports to Russia is not so high today, and Ukrlandfarming had decided to focus on the domestic market in the near term.
Ukrlandfarming, according to the company, is the largest agroholding in Eurasia. It is engaged in the cultivation of grains, production of eggs and egg products, making sugar, cattle breeding, and the distribution of equipment, fertilizers and seeds.
