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11 October 2017

Kernel intends to construct oilseed crushing plant in Western Ukraine

Kernel, world's leading producer and exporter of sunflower oil, intends to expand its crushing capacity by constructing the largest and the most efficient multi-seed processing plant in Ukraine. The construction site is in the western part of the country, near Starokonstiantyniv in Khmelnytskyi region, next door to Kernel’s silo. The installed processing capacity of the plant will be 1 million ton of sunflower seeds per year with investments of around USD 130 million. The project will be financed from the Eurobond proceeds raised in 2017. The commissioning of the plant is scheduled for 2020.

“Western Ukraine has a significant potential to increase sunflower seed production”, - said Yuriy Pugach, the Operations Director at Kernel. "Historically it was a region with low production of sunflower as crushing capacities are predominately located in the south-eastern and central parts of the country and high delivery cost prohibited long-distance transportation due to low density of the seeds.  The sunflower seed has been the most profitable crop for farmers in Ukraine for the past 10 consecutive years, especially now when record high profitability of sunflower seed production drives the expansion of acreage. Following that trend, Western Ukraine demonstrates rapid growth of sunflower seed production during recent years, but the share of the acreage under sunflower is still much below the Ukrainian average leaving headroom for future expansion. Climate conditions in the region are favorable for oilseed production, with sunflower yields in the Khmelnytskyi region reaching 3.5-4.0 tons per hectare, while Ukrainian  average is 1.5-2.0 tons per hectare. Commissioning  of the new crushing plant in the proximity to emerging sunflower belt shall substantially reduce the transportation costs benefiting to local farmers."

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