You're reading: France’s Soufflet Group signs plan to invest $70 million in state-owned Illichivsk port

The Ukrainian grain trading unit of French agricultural giant Soufflet Group signed a $70 million investment memorandum with Ukraine’s fourth largest sea port, state-owned Illichivsk, in Kyiv on June 19 at the Infrastructure Ministry.


Government plans foresee leasing facilities
to New World Grain Ukraine, Soufflet’s subsidiary, for 10-30 years as part of a
competitive selection process to have foreign investors overhaul the country’s
state-owned ports, Infrastructure Minister Andriy Pyvovarskiy told the Kyiv
Post.

Ukraine’s State Property Fund, meanwhile,
needs to give the green light for leasing the nation’s 13 state-owned ports as
the Infrastructure Ministry moves ahead with the bidding process.

New World Grain CEO Jean-Marc Philouze
inked the Soufflet subsidiary’s intention to upgrade infrastructure at the
port, and build a grain terminal with up to 1.2 million tons of capacity. Soufflet
would also like to increase the depth of berths and improve aquatic area near
the port.

“We plan to hire as many local construction
firms and equipment suppliers during the overhaul process located in Odesa,
Kharkiv and Mykolayiv,” Mykola Horbachov, New World Grain’s director for the
Black Sea region, said after memorandum signing.

Should Soufflet be chosen, it could
potentially invest up to $250 million in the port located near Odesa, Pyvovarsky
added. The port had 17.6 million tons of freight turnover last year, according
to the State Statistics Service. However, its freight capacity exceeds 30
million tons and its 29 berths allow ships with tonnage of up to 100,000 tons
to be handled.

Overall, Ukraine’s ports have the capacity
to handle 262 million tons of freight yearly, whereas the total turnover last
year was 144 million tons.

If Ukraine is to capitalize on the
agricultural industry’s plans to double harvests to more than 100 million tons
of grain in five years, grain transportation, storage and shipping capacity
needs to increase fast, otherwise the produce will rot.

“Ukraine is capable of exporting grain and
feed people beyond its borders,” Horbachov said. “According to our company’s
forecasts, the global population in the next 20 years will rise by 2 billion,
and most of them will be living in Asia. To supply any type of goods to Asia,
it is much more efficient to use deep-water ports. The Illichivsk port is one
of them and we would like to see it among those through which we will feed the
world.”

NWG is a joint venture of Australian
agricultural group ABB Grain, and Soufflet, a privately-owned French
agricultural industrial group. Soufflet has traded in Ukraine since 1999 while
ABB has considerable expertise in logistics, infrastructure development and
international grain marketing.

Within two weeks, Pyvovarsky said another
investment memorandum will be signed with “a large European company that is not
a grain trader” to invest in the port industry. He didn’t provide additional
details.

Kyiv
Post editor Mark Rachkevych can be reached at
[email protected].