Agriculture

MCB Agricole [4GW1 GR, BUY] a major grain producing company in Ukraine has finished its spring sowing campaign. The areas sown with spring crops has been increased by 110% YoY to 30.3 thsd ha. Previously, the Company planned to sow just 25.6 thsd ha of spring crops. Compared to plans, the Company sowed more sunflower (by 2.0 thsd ha) and corn (by 1.5 thsd ha). From 54 thsd ha sown with winter crops, 48 thsd ha have survived (11% loss).

The Ministry of Agrarian Policy of Ukraine will suggest that the Ukrainian parliament should increase the raw sugar cane quota by 100 thsd tonnes. With this move, the government intends to cover the sugar deficit in Ukraine until the end of the season. The current quota of 268 thsd tonnes of raw cane sugar for 2010 has been already 96% utilized. The ministry suggests using this mechanism just when the deficit will be felt by the market.

The Minisry of Agrarian Policy of Ukraine is planning to create a stock company “Zerno Ukrayiny” (Grain of Ukraine) on the basis of the state owned stock company “Hlib Ukrainy” (Bread of Ukraine), which will be involved in grain trading. The ministry plans to create the company by the end of 2010. Majority of the stake in the Company will be owned by the state. The Ministry is also considering private funds to participate in the Holding.

Avangard [AVGR LI], a major Ukrainian egg and egg-products producer, which has recently conducted IPO on LSE, increased its free float by 2.15% from 19.55% to 21.7% when its book-runner realized the over-allotment option and purchased a 2.15% stake at the IPO realization price (USD 15 per GDR). If the option were fully realized, the free float would increase to 22.3%. The price for Avangard’s GDRs has decreased 7% to USD 14.0 per GDR since IPO, mainly due to correction on global stock markets.

Kernel Holding [KER PW, HOLD], a major Ukrainian vegetable oil producer and grain trader, is going to purchase a 6% minority stake in Allseeds from minority shareholders. After finalizing the deal, the Kernel’s share should be at 99.4%.

Agroton [A2TA GR], a major Ukrainian agro holding, plans to increase its land bank by 24% in 2010, from 134 thsd to 166 thsd ha. The company also is going to expand its elevators’ capacity from 235 thsd tonnes to 447 thsd tonnes. Agroton confirms its plans to conduct an IPO on Warsaw’s SE in May or June 2010.

Myronivsky Hliboproduct [MHPC LI, HOLD], a major Ukrainian poultry producer, has started construction of its new poultry facility in the Vinnytsia region. The company plans to launch Phase 1 by mid-2013, with Phases 1 and 2 to reach their full capacity of 100 thsd tonnes per annum each by 2015. This facility should increase MHPC’s total poultry production by 60%. The total CapEx into the project is estimated by the management to be USD 670–700 mln. The construction of Phases 3 and 4 will depend on future market conditions and resources’ availability.

Myronivsky Hliboproduct (MHP) [MHPC LI, HOLD], a leading vertically-integrated poultry producer in Ukraine, has announced its results for 1Q2010, ended March 31, 2010. Revenue increased 48% to USD 200 mln; EBITDA remained stable at USD 49 mln; net income decreased 8% to USD 36 mln.