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AgroGeneration to increase grain storage capacity in Ukraine by 50 percent

07 June 20182 min reading
The France-based AgroGeneration plans to invest around €10 million in a project to expand its grain storage capacities in Ukraine by 50 percent. The company’s silos capacities in 2016 were 240,000 tons. 

Farm operator AgroGeneration is planning a roughly 10 million euro ($12 million) project to expand its grain storage by 50 percent in Ukraine so it can ride out market volatility more easily after low prices dented profits last year, Reuters reported. The Paris-listed firm, which farms just over 100,000 hectares in Ukraine, saw earnings cut by half in 2017 due to weak prices and poor weather conditions that slashed yields of maize (corn) and sunflower seed crops. It hopes to see a rebound in 2018, helped by rising grain prices over the past few months. Ukraine is one of the world’s largest producers and exporters of cereals and oilseeds, and AgroGeneration is among the foreign investors to have targeted the country’s fertile farmland, despite political and economic upheaval. “We have plans for a radical extension of our storage capacity,” Vice-Chairman Pierre Danon told Reuters in an interview. “We want to enjoy the best possible prices, something we cannot do currently for both financial and logistical reasons.” The company is in talks with a European partner, which Danon declined to name, to fund the latest expansion project of around 10 million euros. “For us it is a substantial investment,” he said. “But our hypothesis is that after a bearish cycle we are entering a slightly bullish one so it has never been a better time to do so.” The company’s storage capacity was at 240,000 tonnes in 2016. The new silos would be dispatched across the regions in northern Ukraine where the company has farmland, he said. AgroGeneration reported last mont earnings before interest, tax, depreciation and amortisation (EBITDA) of 9.1 million euros in 2017 against 19.4 million the previous year. REUTERS

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