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Oligarch Watch

Yuriy Kosyuk: Top Bird

Yuriy Kosyuk, owner of the country’s top poultry producer company MHP, is the fifth richest person in Ukraine. He also wields considerable influence in parliament and with President Petro Poroshenko.
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Editor’s Note: The following article is part of the Ukraine Oligarch Watch series of reports supported by Objective Investigative Reporting Program, a MYMEDIA project funded by the Danish government. All articles in this series can be republished freely with credit to their source. Content is independent of the donor.

Yuriy Kosyuk, owner of the country’s top poultry producer company MHP, is the fifth richest person in Ukraine. He also wields considerable influence in parliament and with President Petro Poroshenko. (UNIAN)

Yuriy Kosyuk

Date of birth: May 27, 1968

Place of birth: Katerynopil, Cherkasy Oblast

Wealth: $769 million, 5th richest person in Ukraine, according to a 2016 estimate by Focus magazine. His net worth was estimated at $750 million in 2014, and $1.2 billion in 2013.

Key Assets: Myronivsky Hliboprodukt, or simply MHP, is one of the Ukraine’s biggest agroholdings. It covers 55 percent of the Ukrainian poultry market and exports chicken meat to 67 countries, including 17 states in the European Union.

Family: Married to Olena Kosyuk. Has one son, Ivan.

Praised for: Building a socially responsible business, investing in the local infrastructure in the regions where his capacities are located, promoting Ukraine internationally.
Criticized for: Using his political connections to lobby for his business interests.

STORY STARTS HERE:

As three years of Russia’s war against the industrial eastern region chisels away at the financial muscle of Ukraine’s steel barons, a new breed of tycoons is sprouting up to claim a share in the country’s echelons of oligarchy and political power.

Yuriy Kosyuk hovers high atop Ukraine’s increasingly powerful agriculture lobby.

His London-listed MHP is one of the largest poultry producers in Europe. It’s also a top player on the mushrooming domestic grain and livestock feed businesses. Ukrainian Focus magazine has estimated Kosyuk’s fortune at $769 million, above the current worth of exiled oligarch Dmytro Firtash, the former partner of Russia’s Gazprom in the multibillion-dollar business of supplying Ukraine and Russia with natural gas.

Like many oligarchs that have amassed vast wealth since the collapse of the Soviet Union, the 48-year-old Kosyuk accumulated his share of toys to flaunt his status. He has a luxurious yacht, some say a fleet of two yachts, valued at well more than $100 million.

It’s no surprise, therefore, to have seen him with a strong tan – perhaps from Mediterranean sunshine – while visiting the Presidential Administration months after stepping down from a top position in government.

Yuriy Melnyk, a former Ukrainian agriculture minister, has served for years as a top executive in Kosyuk’s MHP poultry company. But when duty called in July 2014 as Russia unleashed a separatist proxy war in the eastern Donbas region after having occupied the Crimean peninsula, Kosyuk made his own leap to the highest levels of government.

As fellow oligarchs Serhiy Taruta and Igor Kolomoisky took over as governors of Donetsk and Dnipropetrovsk oblasts, respectively, Kosyuk became part of an emergency initiative to get billionaires with a stake in the country to unite against the aggression and save the nation from being ripped apart.

He was on July 2, 2014, appointed by a newly elected oligarch president to serve as first deputy head of the presidential administration in charge of coordinating the critical army and security forces. It’s a position Kosyuk, who served in the military two decades ago, held until December of that year, after which he took on an advisory role to Petro Poroshenko.

Political insiders and agriculture experts claim Kosyuk retains strong influence over executive and legislative government, foremost as an informal leader of the increasingly influential agriculture lobby. It’s a claim the Kyiv Post was not able to directly confirm or deny with Kosyuk, as he did not respond to requests for an interview.

Mariann Fischer Boel, then the European Commissioner for Agriculture and Rural Development, meets Yuriy Kosyuk in Kyiv on June 16, 2009. (PHL)

Mariann Fischer Boel, then the European Commissioner for Agriculture and Rural Development, meets Yuriy Kosyuk in Kyiv on June 16, 2009. (PHL)

Farmer #1

As Ukrainian media routinely label Poroshenko as Ukraine’s “chocolate king,” some are carrying on the metaphor to describe Kosyuk as “Ukraine’s chicken king,” “chicken billionaire” or even “farmer number one.”
MHP, a now common brand, is an acronym for a bread and feed business called Myronivsky Khlibproduct that formed the launching pad for his poultry empire which is today the largest poultry meats producer in Ukraine, and one of the largest in Europe.

According to the company’s website, MHP covers 55 percent of an entire 40 million plus Ukrainian consumer market that is increasingly eating more chicken, and fewer Soviet-style sausages. In 2015, it produced 566,600 tons of meat, while all Ukrainian farmers together produced 907,000 tons of meat. The European Union produces 11.3 million tons of meat a year.

MHP unites about 20 brands. It also cultivates grain, farming about 370,000 hectares of land, producing feed as well as meat products.

Kosyuk’s company earned $1.1 billion in 2015, a 14 percent decrease on the previous year, in part due to currency devaluation. But exports to hard-currency-paying European Union markets have been steadily rising, from 16,536 tons in 2014 year, to 27,285 tons in 2015 year.

To bypass EU quotas for duty-free imports set in Ukraine’s free trade agreement with Brussels that Kosyuk has himself criticized in past years as paltry, his MHP last May launched a poultry processing plant in the Netherlands. In total, MHP supplies chicken meat to 67 countries.

Then-President Viktor Yushchenko awards Yuriy Kosyuk with the “Hero of Ukraine” award to mark his outstanding achievements in agriculture on Aug. 23, 2008. (PHL)

Then-President Viktor Yushchenko awards Yuriy Kosyuk with the “Hero of Ukraine” award to mark his outstanding achievements in agriculture on Aug. 23, 2008. (PHL) 

 

 

 

Natalia Pogozheva, a former presidium member of the Ukrainian Agrarian Confederation, and chair of the executive council at the non-government organization ProInvest, said Kosyuk is the only person in Ukraine who has built an agribusiness empire that functions and competes like top global competitors.

“There is no other company of such status in Ukraine … In terms of jobs, attitude, technology. Innovations and technologies are top-notch,” she said.

While serving as president, Viktor Yushchenko in 2008 awarded Kosyuk – whose MHP was one of the first sizable companies to list abroad – with “Hero of Ukraine” honors to mark his outstanding achievements. Ihor Tarasyuk, a former business partner of Kosyuk, at that time headed Yushchenko’s department of presidential affairs. Yulia Tymoshenko, who then was Ukraine’s prime minister, told reporters Tarasyuk owned an interest in the MHP business, a statement that Kosyuk denied.

Oleksandr Bakumenko, a Ukrainian lawmaker with Petro Poroshenko’s faction who heads parliament’s agriculture committee, claims to have known Kosyuk for about 20 years. A former head of the Union of Poultry Breeders of Ukraine which MHP is a member of, he said: “Kosyuk is my close friend, and I am proud to be his friend. He is a perfectionist. He is very pedantic and very smart.”

“For him, the period of time between the idea and its realization is the shortest. While others are hesitating, he is already doing. He loves (business) and he knows how to do it. He can run fast and he makes everyone in his team run as fast as he does,” Bakumenko added.

.An employee of the poultry plant in Kaniv, a city in Cherkasy Oblast 140 kilometers southeast of Kyiv, inspects freshly slaughtered chickens on June 16, 2009.

An employee of the poultry plant in Kaniv, a city in Cherkasy Oblast 140 kilometers southeast of Kyiv, inspects freshly slaughtered chickens on June 16, 2009. 

President’s lieutenant

It was perhaps organizational and managerial qualities that convinced Poroshenko, as Ukraine’s newly elected commander-in-chief, to appoint Kosyuk as his deputy in charge of managing security services and the military during the peak of war in 2014.

Kosyuk, who graduated the National University of Food Technologies in Kyiv, seems to have little experience in military affairs, which comes down to his compulsory service in Ukrainian army in early 1990s.

“I consider him the best manager, who has quite tough management style,” Poroshenko said on July 3, 2014, when he introduced Kosyuk to the heads of the law enforcement and defense agencies. “He has to improve the situation with bringing order to the support area, to the logistics system, tender procedures.”

That last word refers to state purchases for the military, long a suspected source of murky, non-transparent dealings. Yet it’s noteworthy that Kosyuk has not figured in any major corruption scandals while serving in the Presidential Administration, nor afterwards.

Borys Lozhkin, who at that time was Poroshenko’s chief of staff, said in an interview with the Ukrainska Pravda website that along with logistics, Kosyuk helped “with coordinating the actions of the law enforcement bodies.”

Kosyuk’s team, Lozhkin added, also helped to design legislation that led to formation of the new Anti-Corruption Bureau.

Dmytro Shymkiv, deputy head of the Presidential Administration since 2014, said Kosyuk’s responsibilities were “everything that has to do with security, defense, and anti-corruption.”

Political analyst Ruslan Bortnik said “he was appointed as a person, who could support financial changes in the army and law enforcement.”

Arsen Avakov, Ukraine’s interior minister since early 2014, described Kosyuk as an enthusiastic official while recalling their joint trip to a newly liberated Slovyansk in the summer of 2014.

“He was there with us for the first time … He took on his job with passion,” Avakov said.
Though Kosyuk’s stint in direct public service lasted less than half a year, Poroshenko immediately in December 2014 took him on as a freelance advisor.

Shymkiv, a former regional executive for Microsoft, said that Kosyuk had his own point of view about how fast reforms should be moving, adding: “this is an Achilles heel of all the people who come (here) from business, including myself.”

“In business, when you have an idea, you don’t have to be persuading every person in your company to follow it. In politics, you have to persuade a lot of people, taking into account many interests,” Shymkiv added.

Kosyuk, in an interview with the online program “Without Fences” that was published on YouTube on Dec. 23, 2014, said he was an entrepreneur in his heart.

Yuriy Kosyuk and Ukraine’s Interior Minister Arsen Avakov talk to residents of Slavyansk on July 6, 2014, soon after Ukrainian army returned the city in Donetsk Oblast to the government-controlled territory.

Yuriy Kosyuk and Ukraine’s Interior Minister Arsen Avakov talk to residents of Slavyansk on July 6, 2014, soon after Ukrainian army returned the city in Donetsk Oblast to the government-controlled territory.

“I’m definitely not an official. You have more freedom in business,” he said.
According to Lozhkin, the main reason of Kosyuk’s resignation was his schedule.

“Yura was used to a bit easier schedule than the one we have,” Lozhkin told new website Ukrainska Pravda. “He admitted it honestly two months after he was appointed, but he kept working for a long time after that.”

According to political analyst Volodymyr Fesenko, it was a matter of time, as business management significantly differs from government management.

“Plus, different sources say he did not manage to adjust his lifestyle to the job in public service. He did not want to give up many of his habits,” Fesenko told the Kyiv Post.

Oligarch lifestyle

According to a publication by Sergii Leshchenko, a former investigative journalist now serving as a presidential critic within Poroshenko’s own party, Kosyuk owns two yachts: the 87-meters Ace equipped with a sauna, cinema and gym on board; and a support vessel called Garçon that transports jet skis and a helicopter. Ace was estimated by Leshchenko to cost $150-$180 million; Garçon up to $30 million.

However, according to Super Yacht Fan, an online register of yacht owners based on user-generated content, Kosyuk does not own Ace and Garçon. Instead, he owns the 85-meter Valerie, which is valued at some $120 million.

Leshchenko told the Kyiv Post that when his article was published in December 2015 complete with photographs, Kosyuk definitely owned Ace and Garçon, according to his sources among Ukraine’s oligarchic elite.

Bakumenko said people speculate about Kosyuk’s possessions “to even out those who earned money honestly and those who earned it through graft, and to show that both are bad, because they are rich.”

“They are writing about yachts. So? What if a person earned that?” Bakumenko asked the Kyiv Post. “In the U.S., a person would say: ‘Look, son, this is John. He has been studying hard, worked hard, launched production, created jobs, pays taxes. Learn from him.’ What would our people say? Ivan, do you see how he lives? What a bastard, we need to poke his eye out.”

In his asset declaration for 2013 which was published by Ukrainska Pravda, Kosyuk did not list any yachts.

Other luxurious property allegedly owned by Kosyuk has made headlines.

According to the Ukraine’s state register of the real estate, Kosyuk, in addition to claiming four apartments in Kyiv, owns a 1,070-square-metershouse in Khotiv, a village 27 kilometers southwest of Kyiv. He also has four land plots there – almost eight hectares in total.

Investigative journalists from Hromadske TV and ZIK reported that Kosyuk’s mansion there was built on territory that historically has been a part of cultural property: the so-called Khotivske Horodyshche (Khotiv Settlement).

Hlib Ivakin, deputy head of the Institute of Archaeology of Ukraine’s National Academy of Science, told reporters that excavations on that territory revealed a lot of valuable finds related to the ancient Scythian inhabitants of the area.

He said that if the land plot had been sold to Kosyuk, it had probably been done through a series of backroom deals and “some illegal transaction,” as the land had to be first deprived of its protected status.

Kosyuk told reporters he bought the land legally and it is not a part of an archaeological site.

Yuriy Kosyuk talks to Nataliya Mykolska, a deputy minister at Ukraine’s Ministry of Economic Development and Trade, at the Kyiv Post Capturing New Markets conference on March 29.

Yuriy Kosyuk talks to Nataliya Mykolska, a deputy minister at Ukraine’s Ministry of Economic Development and Trade, at the Kyiv Post Capturing New Markets conference on March 29.

Self-made man?

Kosyuk’s supporters say he built up what is today a model, Western-styled agribusiness corporation through hard work and merit, not political connections or nepotism. Ukrainian Forbes magazine quoted him as saying that he didn’t like working with friends and relatives, though his wife holds a senior position in his business overseeing quality control and food safety.

“Those who stayed work at the most difficult jobs. They have to be either an example to others, or leave,” he said in 2013.

His teenager son Ivan Kosyuk studies at Deerfield Academy, a prestigious boarding school in Massachusetts. It counts king Abdullah of Jordan among its alumni.

According to Latifundist, a Ukrainian internet site which focuses on agribusiness, Kosyuk had earlier promised that he would sell his business and give away all the money to the charity if his son refuses to take over the running of MHP.

Yuriy Kosyuk talks to reporters during a press conference on June 12, 2013.

Yuriy Kosyuk talks to reporters during a press conference on June 12, 2013. (Ukrafoto)

Strings in government

Though he no longer holds a formal position in government, Ruslan Bortnik, director of the Ukrainian Institute for Policy Analysis and Management, described Kosyuk as a “person from the financial and administrative circle of president’s close associates who can influence the governmental appointments.”

“This concerns first of all the issue of import and export in the agricultural sector,” Bortnik said.

“He is an important person, but we should not overestimate his influence. This influence is limited within the economic matters and lobbying of his interests. There is also a political influence, but he is not the strongest player here,” Bortnik added.

President Petro Poroshenko (C) with Borys Lozhkin, the president’s former chief of staff, and Yuriy Kosyuk (R) stand during the Ukrainian anthem at a meeting with members of Nova Kraina (New Country), a civil society group, on July 9, 2014.

President Petro Poroshenko (C) with Borys Lozhkin, the president’s former chief of staff, and Yuriy Kosyuk (R) stand during the Ukrainian anthem at a meeting with members of Nova Kraina (New Country), a civil society group, on July 9, 2014.

Playing chicken

Yuriy Solovey, a lawmaker within Petro Poroshenko faction who serves as deputy head of the parliament’s economic policy committee, said Kosyuk weighs influence through a grouping of legislators, including in the agricultural committee.

In his words, agribusiness holdings in Ukraine, for example, are lobbying their interests often by disguising themselves as looking out for the good of small farmers.

A case in point, he said, was a push in past years to preserve a special taxation regime opposed by the International Monetary Fund that allowed farmers to retain accumulated value added tax – spending it on goods and services that are related to their production – as opposed to paying it to the national budget.

Confrontation over the matter got stinky at one point, as protesters brought cow heads on sticks and a carcass of a dead pig in a coffin to parliament in December 2015. The stunt was to illustrate the fate of agribusiness if the special tax regime was canceled, as it was late last year as part of a budget vote.

According to Solovey, this was one of the biggest political battles lost by “the big latifundistas,” including Kosyuk.
“Companies that have been farming over 100,000 hectares of land were interested in keeping the special regime in being free from taxes. So they fought,” Solovey said.

Several independent sources told the Kyiv Post off the record that Bakumenko was one of the lawmakers who were representing Kosyuk’s interests in this budget and tax battle.

Bakumenko denied the allegations, saying he always advocates the interests of responsible, transparent, law-abiding, effective and stable businesses, no matter whether they are small or big.

He admitted that he was one of those who fought for preserving the special tax regime for agricultural companies.

However, he said it was profitable for all kinds of companies, including small, medium and big ones.

“Politicians play on the statements that can’t be proven. They say it was more beneficial for the big holdings because they get more (of the accumulated value added tax to retain.) But they produce more! Please, do more, develop, and you will also get more. These are all fairy tales,” he said.

14

Kyiv Post editor Olga Rudenko contributed reporting to the story. She can be reached at rudenko@kyivpost.com

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