Agro-industrial company "Kernel" acquired storage facilities for transshipment of vegetable oils in the port of Chornomorsk, as well as a terminal for transshipment of sunflower oil in the port of Reni in Odesa region, as stated in the company's report on the Warsaw Stock Exchange.
Assets used for the transshipment of vegetable oils at the port of Chornomorsk were purchased for $19.4 million to increase the sustainability of the oilseed processing business.
“One-time storage of sunflower oil in the amount of 105 thousand tons will enable the group not to stop the work of processing plants in case of interruptions in transportation, as was the case in the 2022-2023 financial years, and to smooth out logistics," the company said.
In case the Ukrainian Black Sea ports are blocked, "Kernel" plans to use assets in the port of Chornomorsk as a hub for receiving products from the railway and storage. Sunflower oil will be stored in warehouses, and then redirected by road transport to the port on the Danube River. In this way, the agricultural holding intends to reduce the logistics costs of the alternative export route.
If Ukrainian Black Sea ports are unblocked, the assets will be used as the main deep-sea transfer base in the Black Sea for sunflower oil, which is sent for export.
The agreement on the acquisition of assets in the port of Chornomorsk is subject to antimonopoly supervision of Ukraine.
In addition, "Kernel" entered into an agreement to acquire for $24.75 million 100% of corporate rights in "Reni-Oil" LLC – a sunflower oil transshipment terminal with simultaneous storage of 15 thousand tons in the port of Reni.
“This is the only terminal among the river ports of Ukraine on the Danube with adequate receiving, storage and unloading capacities, which enables the export of sunflower oil even in the event of a blockade of ports on the Black Sea," the agricultural holding emphasized, adding that they expect the agreement to be completed by December 31, 2023.
The expansion of the infrastructure for the production of edible oils is of great importance for the agricultural holding ahead of the commissioning of the Starokostyantyn Oil Extraction Plant (OEZ) in Khmelnytskyi Oblast, which is scheduled to be launched in the spring of 2024. The total amount of investment in the construction of the enterprise, which will process up to 1 million tons of sunflower seeds per year, will amount to $279 million. "Kernel" clarified that it still has to invest $40 million in this project.
Before the war, "Kernel" held the first place 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 and trade of other agricultural products. The largest co-owner of "Kernel" through Namsen Ltd. is Ukrainian businessman Andriy Verevsky, who owns a 74.05% stake.
In December 2022, Kernel acquired the oil transshipment terminal in the Port of Pivdenny, and in February 2023, the Danube Agro Prom river terminal in the Port of Reni. It also owns the grain terminals "Transbalkterminal" and "Transgrainterminal" in the Chornomorsk seaport.
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