Investment Potential of the Agricultural Logistics in Ukraine GROUP OF COMPANIES UKRAGROCOM & HERMES-TRADING Keep moving forward!
Ukraine is starting to play a greater role in food security of the planet. Ukrainian produce ways to world markets: 2
2014-2015 2019-2020 Cereals Oilseeds and processed products Cereals Oilseeds and processed products Production 63 MLN MT 17 MLN MT 77 MLN MT 22 MLN MT Export 33 MLN MT 10 MLN MT 44 MLN MT 14 MLN MT 12 20 BLN USD BLN USD 3
Ukrainian market. High demand and competition The geography of the investments: UKRAINE RUSSIA US Cargill Glencore ADM Bunge Dreyfus GSI AGCO DuPont Monsanto EU Toepfer Soufflet Fait Ameropa Warsaw London Frankfurt Stock Markets MIDDLE EAST SAUDI ARABIA IRAN Other countries $ 1 BILLION Investment Funds ASIA CHINA JAPAN SOUTH KOREA Noble Olam Daewoo Mitsui Marubeni Cofco $ 3 BILLION 4
Conditions to increase production and export 1. AGRI PRODUCE PRODUCTION TECHNOLOGY 2. INFRASTRUCTURE ELEVATORS TRANSPORT HIGHWAYS TRANSPORT SEA TERMINALS RAILWAY TRUCKS ROADS RAILWAY SEA SEA VESSELS + RIVER TERMINALS RIVER RIVER VESSELS 5
Types of transportation used to export cereals and oilseeds 2014 2020 Railway % 60 MLN MT % MLN MT 26 55 33 Trucks 36 15.5 30 18 River 4 1.5 15 9-10 Increase in volumes by 17 MLN MT 6
Time is money 7
Ukraine railway infrastructure 22 000 KM of commonly used railways > 450 MLN MT transportation volumes of all kinds of cargo * The map shows only main railways Black sea Azov sea Logistics railway storage stations Electrification Dolynska Mykolaiv New track to Ochakiv port 8
Roads infrastructure 169 700 KM of commonly used roads > 183 MLN MT transportation volumes of all kinds of cargo * The map shows only main roads International roads (including European routes) National roads of Ukraine Black sea Azov sea Logistics trucks park at ports Repair New highways 9
River infrastructure 2 130 KM of commonly used water ways > 6.3 MLN MT transportation volumes of all kinds of cargo Desna Sea ports River terminal * The map shows the main rivers Dnipro Pivdennyi Buh SVITLOVODSK RIVER TERMINAL 94 000 mt of storage Dunai Black sea Azov sea River hubs for barge accumulation Dredging 10
Dredging of approaching channels and ports aquatoriums Yuzhnyi 19 Odesa 15 16 15 16 Illichivsk 16 Mykolaiv 15 Ochakiv 12.5 1 2 3 1 2 3 Dredging stages Transshipment in the roads (existing) Transshipment in the roads (new) 11
Problematic issues on internal river ways of Ukraine 2015 Export Internal transportation (cabotage) - Import Excessive additional expenses on pilotage, locking, drawbridge, port dues and one-time permits make the transportation on Dnipro more expensive than transportation on railway and/or trucks. If these are expenses are to be normalized, the Dnipro river transportation would have become cheaper. Positive consequences: increase of the fleet number and cargo volumes, decrease of load on auto- and railways, increase of the State budget revenue. 12
GROUP OF COMPANIES UKRAGROCOM & HERMES-TRADING 15 YEARS of successful development 350 THOUSAND MT of production of cereals and oilseeds 1 MILLION MT of trading > 500 THOUSAND MT of export TOP-22 AGRICULTURAL HOLDINGS IN UKRAINE 250 USD MILLION of investments 75 HECTARES of land 350 UNITS of machinery 520 UNITS of vehicles TOP-15 UKRAINIAN GRAIN EXPORTERS 3 082 JOBS > 78 CENTNERS/HA of corn yield 70 T/DAY of milk 4 000 T/DAY of sugar beet processing 13
Machinery in the field 14
Dairy Farm Petrykivske Moloko 15
Oleksandriiskyi Sugar Plant 16
Dobronadiivske 17
Sharivske 18
Svitlovodsk River Terminal 19
Shipment at Svitlovodsk River Terminal 20
Dispatch at Svitlovodsk River Terminal 21
Shipment at the deep-water port 22
Transshipment in the roads 23
Export trading is represented by Hermes-Trading LLC 2015 Head office Representation Inland silos River terminal Ports 24
Export trading is represented by Hermes-Trading LLC 2015 2015-2020 Head office Representation Inland silos River terminal Ports New representation New inland silos New river terminals Deep water port Fleet Transshipment in the roads 25
EXPORT 2015 2018 2020 Volume 500 1 2.5 THND MT MLN MT MLN MT 100 Dollar Value 200 MLN USD MLN USD 500 MLN USD The development strategy is based, first of all, on the use of logistics benefits, particularly river logistics. 26
River logistics: efficiency Less efficient export without the use of river logistics Farmer Inland silo Railway Port Ship More efficient export with the use of river logistics Farmer River terminal Barges Transshipment Ship 27
FLEET Barges Tugs Self-propelled vessels Floating cranes Storage bins 2018 10 3 0 0 1 2020 20 5 2 1 2 Investments 47 64 USD MLN USD MLN 28
RIVER TERMINALS 2015 2018 2020 Terminals 1 3 4 94 Storage capacities 200 THND MT THND MT 250 THND MT 30 60 Investments 75 USD MLN USD MLN USD MLN 29
RIVER TRANSPORTATION 2015 2018 2020 Tonnage 50 THND MT 500 THND MT 1 MLN MT 10 Cost of cargo 100 MLN USD MLN USD 200 MLN USD 30
DEEP-WATER TERMINAL Construction of own deep-water terminal near Mykolaiv 2015-2018 2018-2022 Capacities 100 THND MT 170 THND MT Investments 70 MLN USD 100 MLN USD 31
INLAND SILOS 2015 2018 2020 Storage 350 THND MT 500 THND MT 560 THND MT 90 Investments 135 MLN USD MLN USD 170 MLN USD 32
OWN VEHICLE FLEET 2015 2018 2020 Number of trucks 15 40 50 Investments 1.8 4.8 MLN USD MLN USD 7.2 MLN USD 33
OWN RAILWAY FLEET 2015-2018 2018-2020 Number of railway wagons 55 170 Number of routes 1 3 Investments 4.8 MLN USD 14 MLN USD 34
LOGISTICS CENTRES CREATION 2015-2018 2018-2020 Creation of logistics company operating, fleet, railcars and vehicle fleet Creation of waterways navigation company for ships in other jurisdiction (Malta, EU member) 35
MARKETING PLATFORMS CREATION 2015-2018 2018-2020 Servicing farmers and buying produce both on silos and with deliveries CPT, FOB Creation of market conditions for efficient trade with farmers: fertilizers, seeds, machinery, etc. 36
REPRESENTATION 2015-2018 2018-2020 Representative offices in countries-importers near abroad Representative offices in countries-importers far abroad 37
INVESTMENTS IN MLN USD 2015 158 60 30 2 - - - 250 2022 158 120 75 20 24 100 77 10 584
RESUMING By 2022 out Total Investments into agricultural logistics development will account for more than USD 584 MILLION. We believe in the potential of Ukraine s agricultural market and we are open to cooperation in realizing agricultural logistics projects.
YURIY SKICHKO DIRECTOR @ +38 044 220 04 40 y.skichko@hermes-trading.com.ua www.ukragrocom.com