In recent years, Ukraine’s agriculture sector has experienced a winning combination of record harvests, rising revenues and expanding export horizons. Unsurprisingly, this has made it one of the most attractive segments of the Ukrainian economy for international investment. Vinnytsia Oblast in central Ukraine has emerged as a key engine of this growth. Traditionally among the country’s most productive agricultural regions, it is now finds itself at the heart of the booming Ukrainian breadbasket. This is helping to attract significant investment to the region.
One of the latest agricultural investment initiatives in Vinnytsia Oblast is the construction of a high-tech corn processing plant. This is a joint undertaking bringing together the Ukrainian branch of US-based global agribusiness giant Bunge and Spanish corn and rice processing market leader Dacsa Maicerias Espanolas. Construction work began earlier this year on the future Dasca-Bunge-Ukraine complex in the village of Demkivka in Vinnytsia’s Trostyanets district. The USD 14 million plant is set to begin operations by the end of next year, with a full production cycle anticipated by the fourth quarter of 2020. The planned plant will utilize state-of-the-art technologies, with building taking place in two stages. A grain elevator is due for completion by the end of 2019, with the grain and flour plant set to launch towards the end of 2020. Once operational, the plant will have a production capacity of almost 300 tons per day.
The project is likely to provide an additional boost to the development of the agricultural sector in the southeastern region of Vinnytsia Oblast, as it will involve extensive cooperation with local farmers and agribusinesses. Crucially, it will also increase Ukraine’s capacity to produce value-added products for export to international markets. This transition towards value-added products is widely recognized as one of the key priorities for the Ukrainian agriculture sector, where the current focus on raw material exports deprives the country’s agribusinesses of the larger profit margins available for more value-added output. This makes the coming Dasca-Bunge-Ukraine corn processing plant a strategically important addition to the country’s agricultural infrastructure and paves the way for greater foreign exchange earnings and tax revenues.
Officials at Bunge Ukraine recognize this strategic significance and see the Dasca-Bunge-Ukraine corn processing plant as a springboard to enhanced export potential to global markets, with the twin factors of cooperation with a Spanish partner and the move towards value-added production combining to boost export options considerably. “This project is of great importance to us,” comments Oleg Bigdan, Director of Legal Affairs and GR at Bunge Ukraine. “The company’s corn cereals and flour products will be exported worldwide. Exports will go to countries in Europe, North Africa, and the Middle East. Partnership with a Spanish company will also allow us to open up new export markets. Raw materials were exported from Ukraine earlier, and this project is aimed at exporting value-added products.”
Bigdan says the choice of Vinnytsia Oblast as the location for the future Dasca-Bunge-Ukraine corn processing plant reflects the region’s thriving agribusiness sector and abundance of suppliers. “The Vinnytsia region was selected for our investment project because, first of all, the planned corn processing plant needs to be supplied with quality raw materials,” he explains. “Corn volumes in Vinnytsia region are currently growing rapidly. The number of farmers able to grow such a product is also quite large.”
Bunge, ltd. is one of the leading agricultural processors and exporters in the world. In Ukraine, it is one of the largest exporters of sunflower oil and cereals. The forthcoming corn processing plant will be the latest in a series of major agricultural investments by Bunge in Ukraine. Existing Bunge investment projects in the country include an oil extraction plant in Dnipro that operates under the “Oleyna” trademark, and a production and reloading complex for oilseeds together with a grain terminal in southern Ukraine’s Mykolaiv. The company’s investments in Ukraine total more than one-third of a billion US dollars.