Welcome to the U.S.-Ukraine Business Council

By Nazar Kudrevsky, Staff Writer, Kyiv Post Kyiv, Ukraine

Wedneday, Nov 21 2007

US-based agricultural and food giant Cargill has expressed interest in building yet another oil seed extraction plant in Ukraine, signifying the continued expansion of leading agro-industry groups onto Ukraine's promising agriculture market.

Vladyslav Utkin, a regional official in Vinnytsya Region told journalists Cargill could pump some $80 million into the new facility. Cargill, he added, has already launched preparations to lease 23 hectares of land for the facility.

Cargill officials in Ukraine confirmed their company's interest to construct the plant, but declined to provide details concerning its location and which oils-bearing crops - sun, rape or soy - would be processed at the plant.

A report by business daily Kommersant-Ukraine suggested the facility would process rapeseed, a key raw material used in producing bio-fuel.

Stepan Kapshuk, general director of Kyiv-based Ukroliyaprom, an association of vegetable oil and animal fat producing enterprises, said international agribusiness companies expressed increasing interest in Ukraine, one of the top grain producers and exporters in the world.

"Current capacities in Ukraine allow for the processing of 6 million tons of oil-bearing crops per year, while the production of sunflower, soy and rapeseed alone amounts to 7 million tons [per year]," Kapshuk said, noting that demand for more processing plants exists.

Currently, three multinational agro-industry leaders have a strong presence on Ukraine's oil-bearing crop and processing business: Cargill, Archer Daniels Midland (ADM) and Bunge.

Ukraine is the world's number one sun oil-producing country and the number two sun seed producer after Russia.

Cargill runs two oil-extraction plants in Ukraine - in Kakhovka and Donetsk.
Cargill pumped $50 million into its Donetsk plant. It launched operations in 2000. Five years later, the company bought the Kakhovka plant from Eurotrade, proprietor of the Chumak food manufacturer in 2005.

Earlier this year, ADM announced the acquisition of a sunflower seed facility near Odesa from Swiss-registered Risoil.

Bunge owns the Dnipropetrovsk Oil-Extraction Plant and is completing construction of an oilseed crushing plant in Illichivsk. The plant in the southern Ukrainian port will process 730,000 tons annually and will be the largest oil-extraction plant in Ukraine, according to Kapshuk.