Danish Axzon Holding plans to buy a pig-breeding farm Kalita in Ukraine, which is part of Smart-Holding specialising on pig production.
Kalita has almost 60 000 pigs, and it is currently the seventh largest pig farm in the country.
The deal is valued at EUR6.6 million and is already in the final stages of negotiation. In 2011, Kalita suffered a net loss of UAH 13 million (US$1.57mln). The operational results of 2012 are still not available, but experts have no doubt that the company has suffered losses again.
According to Forbes.ua currently every second pig farm in Ukraine is going up for sale. The reason is due to a low business efficiency of pig farming. While in Europe the cost of pork production amounts to UAH11-12 (US$1.33-1.45) per kg in live weight, in Ukrainian pig farms it (the cost of production) starts from UAH 16-18 (US$1.93-2.18).
Axzon has been working on the Ukrainian market since 2004. It created a company Danosha which now owns farms in Kalush and Galichsky, in the Ivano-Frankivsk region, which contain about 125 000 pigs.