MHP, Kernel, Astarta share their mid-term priorities

Ukraine’s leading sugar producer and farmer Astarta
(AST PW) is going to grow its land bank by 60% to 400,000 ha by 2020, the
company’s operations director Zeljko Erceg told an economic forum in Kyiv on
Sept. 5, as cited by Interfax-Ukraine. With its current land bank being 250,000
ha, the company is going to increase it by about 50,000 ha each year, he said.
He also said the company is currently constructing two silos of 0.1 mmt of
capacity each, and is considering construction of another one.

On the other hand, Ukraine’s leading poultry producer
and farmer MHP (MHPSA, MHPC LI) is not going to focus on land bank expansion,
the company’s CEO Yuriy Kosyuk said at the same event. Instead, the company
will focus on boosting efficiency and investing into green energy, he said. The
company’s land bank is currently close to 370,000 ha.

The biggest farming company and leading sunflower oil
producer Kernel (KERPW, KER PW) is considering construction of a sunflower
crushing pant in western Ukraine, the company’s development manager Vitaliy
Stavinchuk said. No other details were disclosed. Kernel has already widened
its land bank in the 2017 calendar year by more than 55% to over 600,000 ha
from 385,000 ha.

Alexander Paraschiy: It’s
surprising to hear that MHP is not going to focus on land bank expansion any
more: in its annual report for 2016, the company declared as part of its
strategy expanding its land bank to 550,000 ha (or by 50%) in the next five
years. Perhaps the declared change in the company’s focus is related to the
fact that the stock market did not reward Kernel’s recent expansion of its land
bank. Kernel’s capitalization has dropped by more than 25% since the beginning
of February, when it initiated its significant land bank expansion.