Business news from Ukraine

USAID purchased 50 grain railcars for Nibulon

The USAID Economic Support for Ukraine Project has purchased 50 modern hopper cars, each of which can carry up to 70 tons of grain, for the needs of one of the largest grain market operators in Ukraine, JV Nibulon LLC (Mykolayiv), the company’s press service reported.

According to the press release, the wagons are manufactured at the experimental mechanical plant “Karpaty” (Lviv region). The first 10 wagons have already been delivered, loaded with grain and are being prepared for further transportation of agro-products through Izmail.

“In conditions when the Russian Federation is blocking the sea routes of agro-products export from Ukraine, and 12 river ports “Nibulon”, located on the Southern Bug and Dnieper, are blocked, we must do everything possible to save jobs in the river ports, left without water and cut off from the river stations from the nearest logistics. Loading on railcars for further exports through the ports of the Odessa region is now possible thanks to the USAID Economic Support for Ukraine project, under which new modern railcars were purchased,” said Mikhail Rizak, Director of Government Relations and Sustainability at Nibulon.

He expressed hope for further support of donors in terms of providing wagons for each blocked port and emphasized the importance of resuming these transportations.

According to his information, before the blockade, more than 15 million tons of Ukrainian agricultural products were transported through the Dnieper and Southern Bug, 4 million tons of which were grains.

JV Nibulon LLC was established in 1991. Before the Russian military invasion, the grain trader had 27 transshipment terminals and complexes for receiving agricultural crops, capacity for one-time storage of 2.25 million tons of agricultural products, a fleet of 83 vessels (including 23 tugboats), and owned the Nikolaev shipyard.

“Nibulon” before the war cultivated 82 thousand hectares of land in 12 regions of Ukraine and exported agricultural products to more than 70 countries.

The grain trader exported the maximum 5.64 million tons of agricultural products in 2021, reaching record shipments to foreign markets in August – 0.7 million tons, in the fourth quarter – 1.88 million tons and in the second half of the year – 3.71 million tons.

Nibulon’s losses from the full-scale military invasion of the Russian Federation reached $400 mln. Currently, the grain trader is operating at 30% of its capacity, has created a special unit for demining agricultural land and has started production of the first vessel for demining international waterways at its shipyards in Mykolayiv.

The grain trader recently raised EUR27m from the Danish Export Investment Fund (EIFO) to increase the capacity of the Bessarabsky branch in Izmail, where an elevator and a flour mill will be built.

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USAID to work with U.S. Congress to invest $230 mln in Ukrainian business

USAID will work with the U.S. Congress to invest an additional $230 million of new resources in Ukrainian businesses, particularly to help businesses comply with European Union regulations and export more goods and services to Europe, USAID Chief Samantha Power said.

“USAID will work with the U.S. Congress to invest $230 million of new resources in Ukrainian businesses. This will include everything from technical assistance to businesses that want to scale and expand, technical assistance to help them comply with EU regulations so they can export more of their products and services to Europe and create more jobs for more Ukrainians,” she said at a briefing in Kyiv on Wednesday.

At the same time, she emphasized that businesses cannot grow unless they are provided with affordable capital. Power noted that many financial institutions consider investments in Ukrainian businesses too risky.

“So we are going to expand the use of instruments such as low-interest loans or grants for businesses, first-loss guarantees that will reduce the risk of investing in Ukraine. And we’re going to work together to attract more investment and more private sector participation here in Ukraine, which again is an investment in the resilience of today and also in the economy of tomorrow,” she said.

As Power noted, this new commitment is “just one of many that the United States has made to the Ukrainian people this week.”

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USAID transferred weighing equipment for weighing railroad and road transport to Nibulon LLC

USAID’s Economic Support for Ukraine project has purchased weighing equipment for weighing railroad and road transport and transferred it to one of the largest operators in Ukraine’s grain market, JV Nibulon LLC (Mykolaiv), the grain trader’s press service reported.

“Providing Nibulon’s elevators with modern weighing equipment will speed up weighing of road and rail transport, provide automation and restore previously cut off capacity to the Izmail investment project. Thanks to this, we expect to restore the capacity of supply chains and speed up operations on acceptance and shipment of grain products. Additional weighing complexes will increase the turnover in conditions of increased load on land transportation”, – said the director on interaction with authorities and issues of sustainable development of “Nibulon” Mikhail Rizak.

According to the company, the weighing equipment will be used at four elevators of the company – in Mykolayiv, Poltava and Cherkasy regions.

With the beginning of Russia’s full-scale war against Ukraine, Nibulon was forced to reorient its export chains and compensate for the lack of river navigation on the international inland waterway E-40. The priority was the investment project of the river port in Izmail and strengthening the logistic potential of the company in the use of land routes, recalled the press service of the grain trader.

Currently, Nibulon uses combined routes that combine transportation by truck and transshipment by rail with subsequent transshipment to water transport in Izmail.

USAID’s assistance to agroexporters is part of the Agricultural Sustainability Initiative in Ukraine, which is implemented by the U.S. Agency for International Development. It aims to help Ukraine increase its capacity to produce, store, transport and export grain.

JV Nibulon LLC was established in 1991. Before the Russian military invasion, the grain trader had 27 transshipment terminals and complexes for receiving agricultural crops, capacity for one-time storage of 2.25 million tons of agricultural products, a fleet of 83 vessels (including 23 tugboats), and owned the Nikolaev shipyard.

“Nibulon” before the war cultivated 82 thousand hectares of land in 12 regions of Ukraine and exported agricultural products to more than 70 countries.

The grain trader exported the maximum 5.64 million tons of agricultural products in 2021, reaching record shipments to foreign markets in August – 0.7 million tons, in the fourth quarter – 1.88 million tons and in the second half of the year – 3.71 million tons.

Nibulon’s losses from the full-scale military invasion of the Russian Federation reached $400 mln. Currently, the grain trader is operating at 30% of its capacity, has created a special unit for demining agricultural land and started production of the first vessel for demining international waterways at its shipyards in Mykolayiv.

The grain trader recently raised EUR27m from the Danish Export Investment Fund (EIFO) to increase the capacity of the Bessarabsky branch in Izmail, where an elevator and a flour mill will be built.

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USAID allocates $250 mln for Ukraine’s agribusiness sector

U.S. Agency for International Development USAID Administrator Samantha Power condemned Russia’s decision to suspend participation in the “grain initiative” and announced $250 million in support for Ukraine’s agriculture sector, which has suffered as a result of Russia’s full-scale invasion, USAID said.
“The United States is providing this assistance because of its Agriculture Sustainability Initiative-Ukraine (AGRI-Ukraine). In total, the U.S. government has already directed $350 million to the initiative. The agency plans to engage the private sector, other donors and foundations to raise an additional $250 million,” the USAID press office quoted Power as saying during a visit to the Port of Odessa on Tuesday.
The additional funds will be used to expand critical agricultural infrastructure, including irrigation systems, grain elevators, transloading facilities, and port and border infrastructure.
In addition, USAID will expand support to small and medium-sized agricultural businesses so that they have access to financing and resources to plan for planting and harvesting in 2023.
The agency noted that the Russian full-scale invasion has caused more than $6.6 billion in direct damage to Ukraine’s agricultural sector.
“AGRI-Ukraine will continue to help Ukraine’s farmers produce, store, and export agricultural products and grain to the world,” USAID assured.
The AGRI-Ukraine initiative was launched in July 2022 and supports more than 30% of Ukraine’s registered farmers. Thus, the U.S. provides seeds, fertilizers, agricultural and financial services and storage.
Thanks to USAID support, farmers were able to store more than 843,000 tons of grain, and more than 600 farmers received nearly $49.8 million.
International companies such as Bayer, Grain Alliance, Kernel, and Nibulon are investing in programs to support Ukraine’s agricultural sector. The World Bank has also joined AGRI-Ukraine in financing reforms in the sector.

USAID to provide Ukraine with 12,000 tons of fertilizers for autumn sowing season

The US government, through the USAID AGRO Program, will provide Ukrainian agrarians with 12,000 tons of fertilizers for the autumn sowing season free of charge, the press service of the Ministry of Agrarian Policy and Food said.

“Before the war, Ukraine provided domestic needs for nitrogen fertilizers by 75%. However, due to the full-scale invasion, production has decreased due to logistical problems, broken production chains and rising costs of raw materials. This has limited access to fertilizer for micro, small, and medium-sized farmers. USAID will help agribusinesses ensure their farms have the fertilizer they need in the fall and continue next year,” the statement said.

Agrarians who cultivate from 5 to 500 hectares in any region of Ukraine (except for temporarily occupied territories), grow grain or oilseed crops, are registered as legal entities or individual entrepreneurs, in particular, family farms, will be able to participate in the program.

They will be able to receive 1 ton of nitroammophoska (NPK 16:16:16:16/15:15:15:15) for main and pre-sowing application.

Registration for assistance has already started in the State Agrarian Register (SAR). Applications are accepted exclusively through the GAR, under “Available Programs” – “NPK Fertilizer from USAID AGRO, 2023.” Registration will continue until the applied amount of fertilizer is exhausted.

The USAID AGRO program will hold a public webinar on July 20, 2023 on the terms and conditions and receiving assistance.

As reported, USAID launched a number of programs in 2022 to address the global food crisis, which is exacerbated by the war waged against Ukraine. In the spring of 2023, more than 8,200 Ukrainian agrarians received more than 6,300 tons of fertilizers from USAID, as well as seeds for sowing more than 48,300 hectares of sunflower and 15,000 hectares of corn.

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USAID to Give $1.5 Mln in Grants to Support Export Alliances

The USAID Competitive Economy of Ukraine program announced a grant program to create and support associations of businesses into export alliances with a total funding of $1.5 million, the Economy Ministry press service said Friday.
“Grant support for export alliances will strengthen the potential of Ukrainian enterprises and encourage them to unite for common goals of conquering new markets,” USAID project manager Natalya Petrova said in a statement.
The program offers about 15 grants, ranging from $35,000 to $150,000. Applications will be accepted till September 30, 2023. Given the considerable interest, reception and consideration of applications will be held in stages on June 30 and September 30, 2023.
The Ministry of Economy added that the goal of the grant program is to support businesses seeking to jointly promote their products in international markets. The initiative is implemented in partnership with the Office for Entrepreneurship and Export Development and the national project “Dia.Biznes”.
As the press service specified, the priority sectors for grant support are information technology, engineering, manufacturing, and creative industries and services. However, this USAID program is open to applications to support other sectors that meet the selection criteria.
The USAID Competitive Economy of Ukraine (CEU) program supports start-ups and small to medium-sized enterprises (SMEs) to increase their competitiveness in Ukraine’s domestic market and in international markets, assists in the development of a simplified and transparent business climate, and provides opportunities for Ukrainian companies to take advantage of international trade. A key instrument for implementing the USAID QEU program is the $12.5 million grant program at the national scale for 2018-2023.

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