2014-09-08 06:04 Author: Przemyslaw Ławrowski 1/2 Dariusz Formela, president of PKM Duda [Photo: PKM Duda] 
O investments , the situation on the Polish meat market and the impact of the Russian embargo and disease ASF on industry Money.pl talking with the president of a trading company Duda. Dariusz Formela explains why the company probably will not pay dividends in the near future.
Przemyslaw Ławrowski, Money.pl: What is the impact on the Group’s results of PKM Duda was the introduction of the embargo on Polish meat in the countries of the Customs Union and Ukraine
Dariusz Formela, President of PKM Duda: key for the condition of Polish meat industry in the first half was the exclusion of Polish meat trade outside the European Union, in relation to the occurrence of cases in our country African swine fever. According to the latest data from the European Commission, the export of Polish pork decreased during this period by 46 percent. For comparison, the export sales of the Group amounted to PKM Duda in the first half of this year 126 million zł and thus was similar to the level of the previous year. No possibility of sending the goods to the countries of the Customs Union also led to a situation in which the domestic market also appeared in the supply of meat.
It is worth analyzing this situation. The facts is that in Belarus, and then on the Polish-Belarusian border, there were cases of animals infected with ASF – a virus that manifested itself also in Lithuania. As a result, the entire European Union, which is treated as a single customs territory, it can not send meat products to the countries of the Customs Union, namely Russia, Belarus and Kazakhstan.
In connection with the ASF is also a problem with Asian markets. Due to the emergence of the virus in Poland and Lithuania, Polish producers are prohibited from selling their meat in China, Japan and South Korea. Worse embargo across the European Union applies only to these two countries. This reduces the competitive position of Polish and puts it in the face of the unequal struggle with other EU countries that are not affected by this prohibition.
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Germany, Denmark, the Netherlands can sell meat in Asia, and part of the range which fails on that market comes to Polish. This in turn results in lower prices, as companies from the West can afford to lower margins on products that are not sold on those markets. For example, they are able to flood our market loin, ham or pork neck with a lower price.
you foresee that these bans will be lifted in the near future?
Sorry does not and probably will not be such a will, so that in the foreseeable 12-18 month perspective back into the Customs Union. The relations between Russia and Ukraine there is also a trade war.
In the case of Asia are run by the government in this direction, but it is complicated and time-consuming process, and I do not expect that in the coming months ban was abolished.
What’s with the presence of PKM Duda in Ukraine?
In Ukraine, we integrated business: farm, wholesale, factory-slaughter and processing and shops. We analyze the situation in terms of events in the east of Ukraine. We do not intend to withdraw from the Ukraine. However, due to the tense political situation in the supply of cold meats and pork, with Polish are still difficult.
A recent semi-annual financial report of the Group of PKM Duda seen a decline in net profit in annual terms. Is this a consequence of lower sales outside Polish
There are a few elements that affected. The first is the difficult situation on the Polish market, in connection with the occurrence oversupply of meat, which is reflected in lower margins. Another problem for us are discount stores that increasingly forcing out small and medium-sized stores, which impairs our performance in the distribution business. In this regard, the fastest operate in Mazovia. In addition, we are present in Wielkopolska, Malopolska and Silesia province. The third element is the decline in consumption and pork to poultry. As a large distributor of meats coming from all the major players in the Polish market, we see that sales of poultry annual increases of a few percent, while in 2009-2013 the consumption of meats fell by more than 7 percent.
What is the impact on profits was your debt? In the first six months, it declined by about 30 percent in annual terms.
The level of debt is simply not affect the company’s results. Only affects investment opportunities. In 2009, we made a very restrictive credit agreements in the process of restructuring. Terms of repayment of a strain on our results and prevented the further development of the company.
Pozyskaliście funds to refinance the debt, so as informowaliście, there will be more funds for the development of the company. What investments are you planning?
Investments will focus primarily on the production plant in Grąbkowie where we need to improve infrastructure and develop a refrigeration machine, which will allow us to sell meat in supermarkets or hypermarkets. These devices are used for packing or fixed-weight cutting meat. We are also considering expansion of distribution Pomorskie, Podlaskie, Lower Silesia and West.
To achieve this goal, we need investment in warehouses. We consider the construction from scratch or buying. We also want to invest in expanding resource base, ie the production of pigs for fattening cattle for production. Among the investments we are interested in only those in which the payback period is short, for example. Three years.
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