Over the past 25 years, Ukraine has increased its total oilseed processing capacity by 9.2 times, from 2.6 million tons to 24 million tons, and significantly increased the production of raw materials, said Stepan Kapshuk, CEO of the Ukroliyaprom Association, at the XXI International Conference Fat&Oil Industry-2023.
As reported on the website of the Agrarian and Industrial Reforms, citing Kapshuk, Ukraine’s sunflower processing capacity is currently about 18 million tons, and rapeseed and soybean – 2 million tons.
Sunflower production has increased from 2.26 million tons in 1998 to a projected 14 million tons in 2023. This year’s rapeseed production is expected to reach 4.1 million tons against 0.13 million tons in 2000, and soybeans – 4.7 million tons against 0.06 million tons, respectively.
Mr. Kapshuk said that over the past 25 years, 70 new processing plants have been built in Ukraine, including 40 large ones, as well as 16 vegetable oil transshipment terminals. The industry has attracted investments worth more than $4 billion.
In 2023/2024 marketing year, Ukrainian oilseed processing companies will be able to process 15.6 mln tons of oilseeds, including 13.5 mln tons of sunflower, 1.5 mln tons of soybeans and 600 thsd tonnes of rapeseed. At the same time, sunflower oil production is expected to reach 6 million tons, soybean oil – 0.3 million tons, and rapeseed oil – 0.25 million tons, according to Ukroliyaprom.
Kernel, one of the largest Ukrainian agro-industrial groups, in the second quarter of fiscal 2023 (FY, Q2 – September-December 2022) decreased its sales of vegetable oils (sunflower and rapeseed) by 17% as compared to the same period of the previous FY – from 416,500 tons to 344,700 tons.
According to the report published on the company’s website, the total processing of oilseeds in the specified period decreased by 34%, from 985.4 thousand tons to 653.2 thousand tons.
The holding explained the decrease of production and sales volumes by the stoppage of three of its nine oil extraction plants (IEP) in Kharkiv region, caused by the military risks from the Russian Federation. In addition, the group’s production performance was affected by Russian rocket attacks on Ukrainian critical infrastructure, which led to power outages across the country, the report said.
“Due to regular power outages, Kernel had to temporarily suspend processing operations at two of its oilseed processing plants during November-December 2022, while the remaining four oil extraction plants (OEPs) operated relatively steadily thanks to cogeneration thermal power plants,” the holding explained in the report.
According to the report for the first half of FY 2023 (July – December 2022) Kernel sold 546.8 thousand tons of sunflower and rapeseed oil (-14% compared to the same period of 2022) and processed 1.11 million tons of oilseeds (-24%).
The Group halved the volume of crops supplied to its elevators in the second quarter of FY 2023 as compared to the second quarter of FY 2022 to 1.51 million tons. The company delivered 2.0 million tons of raw agricultural products to elevators in 6 months of FY 2023 – by similar 50% less than in 6 months of FY 2022.
“Kernel” also noted that because of the military aggression of the Russian Federation in Ukraine, 18 of its employees were killed and 61 employees were injured. A total of 1,333 employees of the group participated in the war, of which 532 were demobilized and returned to work.
“In December 2022, one of the group’s MEZs in the Kharkiv region came under missile fire from Russia. Due to its location in a high-risk area and constant shelling in the region, it is not possible at this time to properly assess and evaluate the damage to the facility. No other Kernel infrastructure was damaged during the reporting period,” the report states.
Kernel’s total exports of crops in the second quarter of FY 2023 decreased by 56% compared to the same period last fiscal year – to 1.52 million tons, and in the first half of the year – by 61%, to 2.25 million tons. Export was carried out mainly within the framework of Istanbul grain deal, while negligible volume of agricultural products was exported through alternative channels (railroad, river, automobile transport).
The holding said in a report that in December 2022 it successfully completed the acquisition of a 100% stake in the Pivdennyi oil transshipment terminal (Odessa region, Black Sea) for $19.8 mln.
“Kernel is the world’s largest producer and seller of bottled sunflower oil in Ukraine, accounting for 7% of world production and 12% of exports. In addition, the company was involved in other agricultural products cultivation and sales.
The largest co-owner of Kernel, through Namsen Ltd. is Ukrainian businessman Andrei Verevskyi, with a 39.3% stake.
In FY2022 (July-2021 – June-2022), the holding posted net loss of $41 mln against $506 mln net profit in the previous FY. Its revenue decreased by 5% – to $5.332 bln, while EBITDA decreased 3.7 times – to $220 mln.
Three bulkers loaded with corn, wheat and vegetable oil departed from Ukrainian ports on Sunday, the Joint Coordination Centre (JCC) said.
“The Joint Coordination Centre (JCC) reports that three vessels left Ukrainian ports today [December 18], carrying a total of 54,464 tonnes of grain and other food products under the Black Sea Grain Initiative,” the JCC said.
MV Lady Ayana (25,250 tonnes of corn) and MV Barbaros Hayrettin V (5,214 tonnes of vegetable oil) are destined for Italy. MV AK Halima is transporting 11,100 tonnes of wheat and 11,900 tonnes of corn to Spain.
“Grains that reach a destination may go through processing and be trans-shipped to other countries,” the JCC said.
Five ships, which transited the maritime humanitarian corridor on Sunday, are headed to Ukrainian ports.
“As of 18 December, the total tonnage of grain and other foodstuffs exported from the three Ukrainian ports is 14,194,211 tonnes. A total of 1,128 voyages (565 inbound and 563 outbound) have been enabled so far,” the JCC said.
Ports of “Big Odessa” on Wednesday shipped 149.3 thousand tons of agricultural products in the framework of the “Grain Initiative”.
“Today four ships left the ports of Big Odessa, which will deliver 149.3 thousand tons of agricultural products to the countries of Asia and Europe. In particular, the bulk carrier SUGAR with Ukrainian vegetable oil for India”, – noted in the message of the Ministry of Infrastructure of Ukraine.
In the ports involved in the “Grain Initiative” there are 20 vessels under handling. They load 613.2 thousand tons of Ukrainian agricultural products.
In addition, three more vessels are moving along the “Grain Corridor” for the loading of 162.4 thousand tons of agricultural products.
Since August 1, 529 ships left the ports of “Big Odessa”, which exported 13.2 million tons of Ukrainian food products to Asia, Europe and Africa.
Kernel, one of the largest Ukrainian agro-industrial groups, in the 2022 financial year (FY, July 2021-June 2022) reduced sales of vegetable oil (sunflower and rapeseeds) by 29% compared to FY 2021 – to 967,000 tonnes from 1.37 million tonnes, the total processing of oilseeds – by 31%, to 2.19 million tonnes from 3.18 million tonnes.
According to a report published on the company’s website, the decline in production and sales of oilseeds and vegetable oil was caused by the blockade of Ukrainian seaports by warships of the aggressor country of the Russian Federation, as a result of which the active harvesting, processing and export of grain and sunflower oil was stopped.
It is specified that in the fourth quarter of FY2022 (March 2022-June 2022), Kernel sold 60,800 tonnes of sunflower and rapeseeds oil (less by 78% compared from the fourth quarter of FY2021) and processed 156,600 tonnes of oilseeds crops.
The total export of agricultural crops by Kernel in the fourth quarter of FY2022 decreased by 93% compared to the same period of the last fiscal year, to 123,000 tonnes, while in FY2022 the reduction was 1% – to 7.97 million tonnes.
In total, in the fourth quarter of FY2022, the group of companies increased the volume of agricultural products delivered to its elevators by 12% compared to the fourth quarter of FY2021, to 65,500 tonnes, while for the entire FY2022, some 4.19 million tonnes of agricultural raw materials were delivered to elevators – 10% more than in FY2021.
“The situation with the group’s critical infrastructure remains unchanged. The group’s two oil extraction plants in Kharkiv region, located in the temporarily occupied territories, remain inaccessible. The new granaries were not damaged, except for two silos with a capacity of 74,000 tonnes, which were badly damaged in the spring of 2022,” the group said.
“Since the beginning of the war with Russia, 1,150 of our employees have been mobilized into the Armed Forces of Ukraine or joined the defense units. Of these, 460 were demobilized and returned to work,” the agricultural holding stated.
Kernel also noted with regret that 11 of its employees were killed in Ukraine due to the military aggression of the Russian Federation.
Kernel, one of the largest Ukrainian agro-industrial groups, in the third quarter of the 2022 financial year (FY, January-March 2022), reduced sales of vegetable oil (sunflower and rapeseed) by 28% compared to the same period of the last FY – from 371, 9 thousand tons to 269.1 thousand tons, the total processing of oilseeds – by 38%, from 901.6 thousand tons to 562.8 thousand tons.
According to a report published on the company’s website on Friday night, the decline in production and sales of oilseeds and vegetable oil was caused by the blockade of Ukrainian seaports by warships of the aggressor country of the Russian Federation, as a result of which the active harvesting, processing and export of grain and sunflower oil was stopped.
Similarly, in the nine months of FY2022 (July-2021 – March-2022), Kernel sold 906.3 thousand tons of sunflower and rapeseed oil (-17% compared to 9 months of FY2021) and processed 2.0 million tons of oilseeds ( -21%).
In the third quarter of FY2022, the group of companies reduced the volume of agricultural products supplied to its elevators by 53% compared to the third quarter of FY2021 – to 50.9 thousand tons, while in 9 months. 4.1 million tons of agricultural raw materials were delivered to elevators in FY 2022, which is 10% more than in 9 months. FY2021.
Kernel also noted with regret that due to the unprovoked military aggression of the Russian Federation in Ukraine, five of its employees were killed.
“Since the beginning of the war with Russia, more than 1,100 of our employees have been mobilized into the Armed Forces of Ukraine or joined the terrorist defense units. Of these, 180 have been demobilized and returned to work. No significant damage has been caused to any of the most important objects or infrastructure of the group. Two oil extraction plants of the group are located in the temporarily occupied territory, and access to such facilities is limited,” the agricultural holding stated the results of the Russian military invasion.
The total export of agricultural crops by Kernel in the third quarter of FY2022 increased by 17% compared to the same period of the last fiscal year, to 2.1 million tons, while exports were carried out mainly in January and February and were almost completely absent in March. Over the reporting period, 77% of export deliveries were received from external suppliers, and the rest of the agricultural crop was grown by the Kernel agricultural holding.
Agropromgroup also clarified that in the third quarter of FY2022, the share of its exports in the total volume of grain crops exported from Ukraine amounted to 17%, and for 9 months of FY2022 – 24%.
According to Kernel, in the third quarter of FY2022, it transshipped 2.08 million tons (+1% compared to the same period in FY2021) of agricultural products through its own grain terminal Transbulkterminal (Chernomorsk, Odessa region) – and in nine months of FY2021 – 7.27 million tons (+15%). It is noted that in the third quarter of FY2022, the grain terminal worked exclusively in January and February, before the start of the war unleashed by Russia on February 24.
“The group is working on creating alternative export routes. Rail logistics to the EU countries is very difficult, with numerous bottlenecks that make it impossible to achieve any significant export volumes until supplies are resumed through the Ukrainian Black Sea ports,” – summed up the agrarian group in the message. Before the war, Kernel ranked first in the world in the production of sunflower oil (about 7% of world production) and its export (about 12%), and was also the largest producer and seller of bottled sunflower oil in Ukraine. In addition, the company was engaged in the cultivation of other agricultural products and their sale.
The largest co-owner of Kernel through Namsen Ltd. is Ukrainian businessman Andrey Verevsky with a share of 39.28%.
The agricultural holding in the financial year 2021 (FY, July 2020 – June 2021), increased its net profit by 4.3 times compared to FY 2020 – up to $513 million, its EBITDA increased 2.1 times – up to $929 million, revenue – by 38%, to $5.65 billion.
