The Minnesota-based agri-giant recently announced the partnership with MV Cargo to build the grain and feed crop terminal, which is an outgrowth of its long-term presence in the region, said a company spokesperson.
“Cargill has a long history of being a partner in Ukraine’s agricultural sector,” she told FeedNavigator. “We have been doing business in Ukraine since 1993.”
Additionally, the terminal is expected to add to Ukraine’s port infrastructure and simplify transport of the country’s surplus agricultural products, said Andreas Rickmers, head of Cargill’s grains and oilseeds business in Europe, in a release. “It will add to our footprint of port facilities in the Black Sea region and confirms our intention to keep investing in Ukraine’s agricultural sector,” he added.
“The project will meet the growing demand for a deep water port infrastructure in Ukraine and will help to sustain Ukraine’s leading position among grain exporting countries,” the spokesperson said.
In 2015, Ukraine harvested about 26.5m metric tons of wheat, 8.3m metric tons of barley, and .391m metric tons of rye, said officials with the US Department of Agriculture’s (USDA) Foreign Agriculture Service (FAS) in January’s Global Agricultural Information Network report . The corn harvest was around 23.2m metric tons.
The country exported about 10.9m metric tons of wheat and feed wheat, 8.9m metric tons of corn and feed corn and more than 3.9m metric tons of feed barley from July 1, 2015 through January 26, they said.
The grain terminal is set to handle several products from the region, said a company spokesperson. No breakdown of what is expected to be processed at the terminal is available at this time.
However, the terminal is set to manage up to 5m tons of grain every year, she said.
“It has taken us a while to get to this point,” she said. “We needed to find the right partners to work with.”
The two companies had previously entered into a memorandum of cooperation with Ukraine’s Sea Ports Authority in August, said officials with Cargill. In the agreement, the port authority said it would dredge an area near the proposed terminal to allow for vessels with weights up to 100,000 metric tons.
Construction on the terminal has already started the spokesperson said. It is expected to be completed and in operation by the spring of 2018.
While Cargill intends to be a major customer of the terminal, the facility also will be open to third party users, she said. “The terminal will be operated up to highest Cargill standards by the joint venture,” she added.
The company is anticipating running about 70% of its Ukraine grain program through the facility, she said.
Additionally, Cargill has several similar joint-venture projects in the region, the spokesperson said.
“This port will expand our network of ports in the Black Sea region, joining our existing ports in Constanza in Romania and Novorossiysk in Russia,” she said.