Ukrainian premix company ABM to open new factory in spring 2023

DIRECT FROM THE SOURCE

decided it would not decrease its service in Europe as we are focusing on long-term development.”

“We hope to ensure a stable supply for our customers in this unstable environment, to be closer to our customers and respond quickly to their needs and create greater value,” he stated.

SPECIALTY AMINO ACIDS

Mr. Tie added that Eppen’s current valine production volume is limited and is just enough for China and the Americas markets. Eppen, however, is planning to expand its valine capacity in Q2 2023 and will start valine sales in the European market thereafter. Total valine nameplate capacity is expected to reach 30,000 tonnes/year after the expansion. On 29 November 2021, Eppen received authorisation to sell valine into the EU.

Mr. Tie added: “I personally think that for Eppen it is also necessary to start tryptophan and isoleucine production and sales in 2023.”

Ukrainian premix company ABM to open new factory in spring 2023

VIEW ON LYSINE AND THREONINE

Meanwhile, global capacity of lysine and threonine currently exceeds demand, and China accounts for more than 70% of global capacity. However, if companies are confident that they have the ability to keep making profits, then capacity expansions are expected to continue.

Mr. Tie said that while all producers are currently selling at a loss, they cannot sacrifice profits indefinitely. A general trend of selecting the superior and eliminating the inferior could lead to some lowefficiency players leaving the market.

“Leading amino acid companies have their own competitiveness in the market; new entrants would not influence the industry in the long term,” he commented.

Despite operating in a war-torn country, Ukrainian premixer ABM-Trade LLC is only a few months away from opening its second production facility.

The company’s new manufacturing site, located in Lutsk, western Ukraine, will produce premixes, complete feed, mineral blocks and specialty products at a rate of 15 tonnes/hour. It is expected to be opened at the end of spring 2023, ABM CEO Roman Ogrodnichyy told Feedinfo at EuroTier.

Established in 2007, ABM currently employs approximately 90 people and owns 11 trucks. Ogrodnichyy said his firm will continue to invest in its fleet in the next six months.

“Our priorities in 2023 are to: first, expand our transport logistics, then ensure the opening of the new factory, and develop our distribution networks in other countries,” he commented.

ABM’s total manufacturing capacities in Lutsk currently amount to a production potential of up to 8,000 tonnes/month. This is on par with what the company was producing before the war broke out. 85% of its products are branded ABM. The remaining 15% are private label.

The Ukrainian premix market is dominated by several larger players with

“We are lucky to be based in western Ukraine and we have been able to cover our customers’ needs.”

a global network, while others have a more regional focus. ABM is, for now, a regional player with partners in Ukraine and Moldova, but is aiming to be global.

In fact, prior to the war, ABM was on a steady growth trajectory. The company’s annual growth rate over the past six years has been 55% (mainly between 2015-2020).

“We hope that 2022 will be better than 2021. So far, we are ahead of expectations, and we also benefit from the fact that smaller rivals are either closed or don’t have production anymore due to the war,” Ogrodnichyy said.

Before the war, the Ukrainian premix market was similar to other premix markets in Europe. However, from Ogrodnichyy’s standpoint, the status of the premix market in late 2022 is one of lower volumes due to the war.

“The challenge is that some farms in Ukraine are either destroyed or have closed down. Farmers have also cut costs and [are] resorting less to feed additive usage,” he said. “We are lucky to be based in western Ukraine and we have been able to cover our customers’ needs. We produce at our normal schedule.”

ABM experienced issues around raw material delivery from within Ukraine to its site in Lutsk, but that was mainly contained to the first three months of the war, Ogrodnichyy said, adding that ABM had payment issues at the very beginning of the war and bought some raw materials on credit.

“Since, we have changed our logistics routes to other countries, making longer delivery routes. But we had no changes in deliveries from our European partners. We had to buy additional trucks to buy raw materials from our European partners,” he commented.

As for the construction of the second factory, the impact was also relatively short-lived.

“When the war broke out, we only stopped building the factory for a two-week period, only because we were afraid of missiles hitting us!” Ogrodnichyy said.