Gallusman, part of Ukraine’s Ovostar Union Group has announced plans to invest € 100 million to build a huge egg production facility in Latvia. The project is planned as a joint venture with Nordic energy company ADVEN with nearly 90% of eggs from the new facility destined for exports.
The new project will make Ovostar Union the largest egg production company in Northern Europe. The company’s target is to expand into new markets in Europe and the Middle East. Currently, the company is going through the process of environmental impact assessment for the project, which is expected to be completed by the end of the year. The construction works are planned to start in 2021, Ovostar Union said in a statement on its website.
The partnership with Adven would allow Ovostar Union to fully focus on its core business, which is egg production, while adhering to the strict environmental standards. “From the very first meeting Gallusman emphasised their ambition towards circular economy solutions and it fits perfectly with ADVEN’s strategy. The new egg production facility will be efficient, green and it will utilise its waste streams in order to minimise its potential environmental impact. Circular production includes lowered CO2 footprint that contribute to environmental and economic gains,” Kristaps Greidans, Business Developer at ADVEN Latvia, said in the statement.
Ukraine egg export is going down
From January to April 2020 Ovostars home base Ukraine exported 37.17 million eggs, 29% down compared to the same period of the previous year, the country’s State Statistical Service estimated. In monetary terms, export shrank by 29.6% to $ 33.44 million. Latvia remains the second biggest importer of eggs from Ukraine. The country imported 4.44 million eggs during the first four months of the year. The largest importer was UAE, which imported 11.57 million eggs from Ukraine.
Dark clouds hang over Ukrainian egg industry
The Ukrainian egg industry has been on a dream run but there are major problems looming on the horizon.
Egg safety
In August of 2019, Latvian officials raised concerns over the safety of eggs of Ukraine origin, referring to some shipments found being infected with salmonella. The Latvian Minister for Agriculture Kaspars Gerhards sent a letter to Vytenis Andriukaitis, the commissioner for health and food safety calling on the European Commission to “take action and put in place measures to prevent consumers from being exposed to a foodborne salmonellosis risks”. However, no additional safety measures have been introduced so far.
Ovostar expanding markets
Meanwhile, Ovostar Union continues to expand the list of sales markets. Just recently, the company secured permission to supply egg products to Israel. 2019 was not the best year from financial point of view for Ovostar Union. The company posted a net loss of $ 20 million in 2019, as compared to profit of $ 17.4 million a year earlier. The revenue decreased 16% to $ 104.65 million.
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