Mixed fortunes for Europe’s poultry meat companies

Business conditions have been challenging for Europe’s poultry meat companies lately but several are pushing ahead with expansion plans.

Duc Group

France-based Duc Group, for example, has reported third-quarter revenue at EUR44.4 million (US$47.3 million), which is 4.88 percent down on the same period last year. This follows lower sales for the previous 2 quarters and brings the revenue for the first 9 months of the year to EUR135.7 million, down 2.49 percent from the 2014 figure.
In its latest announcement, Duc attributes the decline to a 1.1 percent reduction in poultry meat consumption since the beginning of the year, extreme summer temperatures and a price war at home and to competition over exports to South Africa. The company adds that the indications are satisfactory for the holiday period.

Moy Park

Moy Park reported good sales volume growth in both the U.K. and Ireland and Continental Europe business units for its third quarter of 2015 compared to the same period of 2014. However, revenue was down 1 percent to GBP350.7 million (US$534.3 million). Foreign exchange movements, commodity price deflation and lower international sales were reported to have offset sales volume growth. Two months ago, JBS completed its acquisition of Moy Park, which has headquarters in Northern Ireland.

Cherkizovo

Quarterly revenue for Russia’s largest meat and feed producer, Cherkizovo Group, was RUB56.0 billion for the first 9 months of its 2015 fiscal year, 15 percent higher than the same period of last year. Gross profit, however, was up just 2 percent at RUB15.3 billion (US$865 million) and gross margin fell to 27 percent from 32 percent one year ago.
“In the past nine months, we began the construction of a poultry complex, consisting of a parent flock site and a replacement flock site. The only one in Russia, it will allow us to reduce our dependence on parent eggs grown abroad,” commented the Group’s CEO, Sergei Mikhailov. It has a capacity of 128 million eggs per year, with a further 240 million eggs per year from a new hatchery in Elets. The group has also invested in pork production and processing, a new feed mill and a large grain storage facility.

HKScan

Finland-based HKScan has announced it is to upgrade its poultry production - one of its strategic focus areas. It will upgrade and expand the DanHatch Finland hatchery in Mynämäki hatchery and build a new facility specializing exclusively in poultry products in Rauma.
In March of 2015, HKScan Finland Oy and Danish DanHatch AS agreed the sale of HKScan Finland’s hatchery business and real estate assets to their jointly owned associate company, DanHatch Finland Oy.
The company has recently signed an agreement with agricultural company, Hankkija, and Schothorst Feed Research for the joint development of poultry feed and feeding solutions.
“Developing and improving the efficiency of our poultry feed solutions is a major focus area since feed expenditure accounts for roughly 60 per cent of all broiler production costs,” said Ulf Jahnsson, VP Feeding Business at HKScan.