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Meat processing in Ukraine suffers from weak demand, difficulties in buying raw materials, lack of funds – experts
KYIV. Aug 11 (Interfax-Ukraine) – The main difficulties in the work of slaughterhouses and meat processing plants are a decrease in demand for meat products due to the weakening solvency of the population, a lack of working capital and difficult access to credit for industry enterprises, as well as difficulties with the procurement of raw materials.
The corresponding results of a survey among representatives of the meat processing industry were published on the website of the Pig Breeders of Ukraine association.
According to its data, the key uncertainty factor for representatives of the meat processing industry is a decrease in consumer demand as a reaction to the rise in retail prices for meat and meat products, as well as processors’ fears about a possible reorientation of consumers to cheaper products.
"Estimates of the current state of implementation and, accordingly, the actual workload of slaughter capacities vary significantly depending on the region, the size of the enterprise and its markets. So, while powerful market players and smaller operators in the centers of population congestion work relatively stably, a number of small operators in less densely populated areas of the central and southern regions notice the weakening of sales and switching to the "on order" mode," the association explains.
In addition, the industry notes a shortage of working capital due to the worsening situation with the return of receivables (mainly when working with national retail chains) and the lack of access to the usual credit instruments.
According to the union, the revision of the exchange rate in July led to an increase in the cost of imported "consumables" (packaging, spices, etc.) not only for deep meat processing operators, but also for slaughterhouses that need modernization/re-equipment or replacement of elements of individual production lines.
Industry representatives clarified that the problem is the difficulties with the procurement of raw materials, expressed in increased competition in the purchase of slaughter animals due to the limited domestic supply of pork. In addition, the highest logistics costs reduce the radius of purchase of raw materials from manufacturers for meat processing plants and slaughterhouses.
