You're reading: Poroshenko’s billionaire adviser unloads Russian farming assets, reduces risk

Ukraine’s largest poultry producer, London-listed MHP, reduced exposure to Russia by exchanging its grain growing and storage assets there for a western Ukrainian farming operation of a similar size, registered in Sweden, according to the company’s news release e-mailed on June 9.

Billionaire Yuriy Kosyuk, MHP’s founder and majority owner, is an adviser to President Petro Poroshenko. After being appointed to the post in December, Kosyuk stopped handling management at the poultry producer.

MHP still owns the only poultry producer in Crimea through a Russian-registered company that has yearly capacity to produce 60,000 tons of chicken. The poultry producer swapped 40,000 hectares of land and 150,000 tons of grain storage capacities in Russia’s Voronezh Oblast to receive 60,000 hectares and 90,000 tons of grain storage facilities in three western Ukrainian regions from Sweden-registered Agrocultura.

The deal “was a pure swap of assets with no cash adjustments and based on equal working company,” MHP stated. The Russian assets were acquired in 2013, while the Moscow-led Customs Union banned MHP in February 2014 from exporting poultry to the trade bloc that also includes Belarus and Kazakhstan.

Kyiv-based investment house Dragon Capital estimated that after the swap, MHP’s now has access to 380,000 hectares of farmland with plans to increase its land bank to 500,000 hectares in the next two years. “In view of Ukraine’s ongoing economic, political and military tensions with Russia, MHP’s intention to dispose of its Russian land holdings is fully reasonable,” Dragon commented in a note to investors.

The move is part of a “broad-based” strategy by Ukrainian business to exit Russia where they “apparently face mounting pressure, but also a distinct lack of prospects due to open hostility between the countries,” Bohdan Vortilin, an analyst at Investment Capital Ukraine, told the Financial Times. “In the near future we will probably observe more high-profile exits.”

In April, Russian authorities seized $39 million worth of property belonging to Poroshenko’s Roshen confectionary in the Russian city of Lipetsk, the company said in a statement. On March 21, 2014, Roshen stated that it had invested $175 million in the construction of plants in Russia.

Yet the nation’s state consumer rights watchdog, Rospotrebnadzor, banned the import of Roshen’s confectionary goods on July 29, 2013 for “unjustified” reasons, according to Roshen.

Kyiv Post editor-at-large Mark Rachkevych can be reached at [email protected].