MHP has grown from humble beginnings in 1998 to become Ukraine’s leading producer of poultry meat products, exporting 220,983 tons to 63 countries in 2017. Yuriy Kosyuk, the company’s founder and CEO, explained the drivers of this success and outlined the potential that Ukraine holds for entrepreneurs with good business plans
You founded MHP in 1998, starting with 10 employees. Today, the company has become Ukraine’s largest poultry producer, and one of the leading poultry producers in Europe. How did this growth come about?
It’s simple: Ukraine had the space for the business. Ukraine was importing 99 percent of its chicken meat for local consumption, and we had everything available in order to build from scratch the business model as we saw fit, with the aim of making it the most efficient in the world.
The reason our business model has a competitive edge in the European and American markets is because we control everything ourselves; we developed the company ourselves. We have invested billions in the construction of new facilities, building a new business landscape in Ukraine. Compared to our main competitors, we have invested a fortune, and this is why we are so profitable. We built this company in a reasonable, smart and efficient way.
This year, the company will invest a further $250 million in Vinnytsia Farm, where it plans to build a second biogas complex and modernize all the equipment. What does this specific investment represent?
We are simply implementing our existing business model. We’re developing the current project and making it more efficient. The capacity will also grow, and this will be organic growth.
You have said that vertical integration is the key to success in the poultry business, and MHP does everything from growing grain to incubating the eggs. What makes this model the right one?
If you look at MHP’s competitors around the world, many of them face problems with suppliers, farmers, local authorities, and their customers. In addition, the supermarkets monopolize access to the market. What we have done is learn from all their problems in the past. Our business model was built as an answer to this volatility and aims to minimize any impact from the different sides, be that from suppliers, customers or subcontractors. Our existing model has eliminated most of the problems and risks faced by our competitors.
To what extent is your company protecting itself against potential macroeconomic volatility, such as U.S.-China trade tensions, Saudi Arabia’s halal measures and the EU’s restrictions on Brazilian poultry imports?
I don’t see that we should be affected by these elements. In the case of Brazil, there were irregularities in laboratory tests. We are not doing that. We are open. Our ethos is around building an honest business. We are very transparent with our customers; we don’t do anything under the table.
Problems in other countries create new opportunities, with customers as they seek the diversification of their supply. For us, these risks represent new opportunities. We are currently opening the Chinese market, as we have a reliable partner in China who is responsible for food supply there.
You represent over 50 percent of the Ukrainian poultry market. What aims do you have to expand further?
We have the appetite to be a European leader in protein production and for the international market. This is our ambition, and we expect that our collaboration with China will give us extra energy, a better understanding of the international market and an extra source of growth. Our appetite is to be a leader in the world, based in Ukraine.
How would you describe the competitiveness of Ukraine and its potential as a global player?
Ukraine is a good place for production. Indeed, for me, it is the best place for production.
Our current competitiveness is very high. We are currently better than Brazil and the United States, our main competitors. My opinion is that in 10-15 years this post-Soviet Union region will compete very strongly with Brazil and the U.S. in the global protein market.
Do you face negative perceptions about Ukraine when dealing internationally?
This is the reason why we are open and transparent. Our level of transparency is quite unusual for a worldwide business. Anybody, be they our competitors or our customers, are welcome to visit our facilities and talk to our people. Most of our specialists speak fluent English and can communicate with people without any problems. We demonstrate the highest level of transparency, and that is because we understand what we do, we do everything right and we try to convince everybody that we are the right company in the right place with the right business model and that we are open for any discussion.
To what extent do you act as an ambassador for Ukraine?
The chairman of the World Bank recently visited Ukraine, and I was one of the members of the business community present. We talked a lot about new laws and new rules for Ukraine, and I told him to look at MHP, which is a successful company in Ukraine under the current conditions. I said that we could be an ambassador for the rest of the world to show that in the current conditions, if you do everything right, if you invest enough and if you build your management team well, it is possible to be very successful here, compared with the rest of the world. We are not just talking about Europe; this level of profitability is not achievable anywhere else but Ukraine. We are just one example, but there are maybe 20 other similar cases.
What are the opportunities for international investors to partner with MHP?
There are many opportunities. We could do business together in areas from green energy up to very complicated agricultural products. For example, we have an ability to produce organic products to the highest European standards. There are also opportunities in technology: we are currently developing an AI system in the company, whereby our company will be a pilot for the rest of the world. It is a project we are working on together with Microsoft. We are a school and laboratory for them.
What is MHP’s impact on Ukraine?
For MHP, social responsibility and what we do for this society is very important. Our activities range from changing some hospitals where we are based, to financing small businesses, providing training to aspiring entrepreneurs and supporting sports. We also have the MHP Accelerator, which enables the younger generation to come in with their ideas and use our company as a base. Our managers can act as mentors, then they can then build a laboratory for their business and to open new opportunities. In general, we try to pass on the same rules, the same condition and the same standards as we have inside of the company with nearly 28,000 employees, to the rest of society. Our aim is to help change mentalities and modernize people’s lives.
In your view, how should the world see Ukraine today?
Have a look at our successful business model. Look at MHP as an example of a successful business in the country, and how we can be profitable and make money in Ukraine. This growth may be a dream for some countries, but in Ukraine, there is a lot of potential because the landscape is still quite empty. We work in a lot of countries all over the world and I am completely confident that Ukraine is the best country in the world in which to do business. If you’d like to do big business, you should come to Ukraine. There are good people, good markets and the potential for success.