Business news from Ukraine

KSG AGRO AGRICULTURAL HOLDING INCREASES LAND BANK BY 6.7%

KSG Agro agricultural holding increased its land bank by 6.7%, to 23,900 hectares, the company’s press service said on Wednesday.
According to the report, the agricultural holding has increased its land bank due to 1,500 hectares of land shares in village Strilkove (Henichesk district, Kherson region), where it plans to grow crops.
The exact names of the products are not indicated.
The vertically integrated holding KSG Agro is engaged in pig breeding and production, storage, processing and sale of grain and oilseeds.
Over the nine months of 2020, the agricultural holding posted $4.77 million in net profit, which is 52% less than in the same period in 2019, revenue decreased by 17%, to $14.67 million.

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DNIPRO AGRO GROUP RAISES LAND BANK BY 16%, ALMOST DOUBLES ELEVATOR CAPACITY

Dnipro Agro Group in 2018 increased its land bank to 50,300 hectares (16% or 7,000 hectares more), according to the company’s website.
According to the company, Dnipro Agro Group also almost doubled the capacity of elevators, to 124,000 tonnes. In addition, the company launched a pig breeding project for 1,300 animals.
According to the report, in the 2018 marketing year Dnipro Agro Group collected 69.8 tonnes of grain and 76.1 tonnes of oilseeds.
Dnipro Agro Group is a vertically integrated group of companies whose core business is production, storage and sale of grains and oilseeds.

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TURKISH ONUR TO DOUBLE LAND BANK IN UKRAINE

Turkey’s Onur, engaged in construction and repair of roads and buildings and developing agriculture, plans to double land bank in Ukraine, to 10,000 ha.
“We have been investing in it for two years now. So far, we have about 5,000 hectares of agricultural land… We mostly concentrate on grain, but if we can increase our land to 10,000-15,000 hectares, we will look into other areas,” Head of Delegation, General Coordinator of Onur Group Emre Karaahmetoglu said in an interview with Global FDI Reports.
According to the public register of legal entities and individual entrepreneurs, the owners of Onur own Agroseton LLC (the village of Ozhydiv, Lviv region). The company was registered in May 2016. Its owners are Karaahmetoglu (20%), Onur Cetinceviz (40%) and Ihsan Cetinceviz (40%). The charter capital is UAH 2 million.

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TAS AGRO INCREASES LAND BANK IN UKRAINE TO 83,000 HECTARES

TAS Agro agricultural holding in 2018 increased its land bank by 11.4%, to 83,000 hectares, businessman Sergiy Tigipko has said.
“In 2018, we bought the lease rights for 8,500 hectares of land: 3,500 hectares in Kherson region for irrigation and 5,000 hectares in Chernihiv region. Now we have about 83,000 hectares. And we are also considering two more transactions: for 3,000 and 12,000 hectares. If we agree on conditions, then we will buy them,” he said in an interview with the New Time (Novoye Vremia) magazine.
According to Tigipko, TAS Agro is not actively involved in processing now.
“Working in the bank, we see the profitability of many businesses: how they earn on eggs, poultry, or milk. And nowhere do we see more profitability than just in production of grain,” the businessman said.
TAS Agro cultivates land in Vinnytsia, Kyiv, Kirovohrad, Chernihiv, Mykolaiv, Sumy, Kherson, and Dnipropetrovsk regions. It is engaged in dairy cattle breeding (up to 5,500 animals), owns six elevators with a capacity of 250,000 tonnes.

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FRANCE’S AGROGENERATION SIGNS AGREEMENTS TO SELL 27% OF LAND BANK IN UKRAINE

France’s AgroGeneration with assets in Ukraine has signed agreements for the sale of 28,500 ha of agricultural lands (27% of the group’s land bank) in Zhytomyr and Ternopil regions for EUR 19 million.
According to a company report on its website, this price includes land lease rights and biological assets whereas machinery and inventory will be part of a separate sale.
According to the company, after the completion of these transactions, AgroGeneration will operate approximately 80,000 hectares of land in Ukraine with close to 10,000 hectares in the West (Lviv) and 70,000 hectares in the East (Sumy and Kharkiv).
The company said that due diligence, which could lead to a price adjustment, should be finalized by the end of February 2019. A prepayment has already been made to AgroGeneration for approximately 15% of the total price and an equivalent amount will be placed into an escrow account for a maximum period of nine months after completion of the due diligence.
In addition, AgroGeneration has secured its 2019 crop financing from its historical banking partner Alfa-Bank Ukraine for a total amount of $23 million, and will top-up its financing with pre-payment agreements with its usual key trading partners.
The company has already sown, under favorable weather conditions, 34,000 hectares of winter crops, out of a total of 77,000 hectares planned.
As reported, Kusto Agro Pte.Ltd (Singapore), which owns Kusto Agro in Ukraine, was permitted by the Antimonopoly Committee of Ukraine to acquire two agricultural enterprises in Zhytomyr region from AgroGeneration – Lischynske LLC and Tereschenko Agrarian Fund LLC.
The French group AgroGeneration was founded in 2007. It grows grains and oilseeds. In Ukraine it currently processes about 120,000 hectares.
In October 2013, AgroGeneration completed its merger with Ukrainian agricultural company Harmelia.

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UKRAINE COULD ATTRACT AT LEAST $15-20 BLN OF INVESTMENT USING ITS LAND BANK

Ukraine needs foreign direct investment (FDI) to provide stable growth, and one of the fastest instruments for attracting at least $15-20 billion could be the offer of state-owned agricultural land estimated at 10 million hectares, Managing Partner of ICU Investment Group Makar Paseniuk has stated. “Land reform would be a huge driver for the further development of our country, as it can be done quickly and it will quickly attract FDI,” he said at the Ukrainian Financial Forum organized by ICU in Odesa.
Paseniuk said that the total area of agricultural land in Ukraine is estimated at 20-25 million hectares, of which about 10 million hectares still belong to the state. According to him, the average rent rate is $140-150 per hectare a year, which, taking into account the conservative estimate of a 10% rate, entails the cost of land of $1,500-2,000 per hectare.
“Thus, the cost of all state farmland is $15-20 billion, which can be compared with the existing IMF program in the amount of $17.5 billion or more, which twice as much as the NBU’s net reserves of $6.8 billion,” the expert said.
He urged the state to actively offer large investment projects in other sectors.
“I cannot name an economically viable project in which a private investor can now invest $1 billion,” Paseniuk stated.

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