In 2017, UkrOliya realized unique projects for the oilseed market of Ukraine

Source

APK-Inform

1771

 

 

 

UkrOliya Company had quite a successful 2017 year and managed to realize two promising projects concerning high oleic (HO) sunflower oil production and crushing of organic raw materials only. More details of the developments and prospects can be read in the below interview of APK-Inform Agency withthe Head of business development department of LLC UkrOliya, Yuri Shevchenko.

 

 

 

 Note

LLC UkrOliya was founded in 2001. The production facilities are located in Poltava oblast in Dikanka and Zenkov. The plant crushing capacities in Zenkov total 600 t/day with the product range of crude and refined deodorized sunflower oil and sunflower meal.

In November 2017, UkrOliya launched UkrOliya Organic in Dikanka – the first plant in Ukraine with crushing of organic products only. The sunflower seed crushing totals 18 thsd t/year and soybean crushing – 50 thsd t/year. UkrOliya produces the trademarks as follows: traditional sunflower oil “GARNA”, “Dikanka”, “Maslinka”, and also professional HO sunflower oil for cooking “EFFO”, and the first in Ukraine organic sunflower oil “UkrOliya Organic”, which holds 15% of the Ukrainian package sunflower oil market share.

 

- What results were achieved in Ukraine and by Your company in general in the agricultural sector in 2017?

The record crop production in 2016 together with the growth of the sunflower seeds crushing volumes resulted in world market price decrease for sunflower oil to its minimum. Thereby, many experts forecasted some difficulties in 2017. However, during the first halve of the 2017 the price tendency returned upward as the decrease of sunflower seeds production and the growth of the refinery capacity led to the raw materials demand growth.

In terms of UkrOliya Company’s operations 2017 FY was challenging as the company realized the unique projects on the market. We’ve launched the professional high oleic oil for cooking (trade name EFFO) and also we have launched the first organic oil crushing plant “UkrOliya Organic”. With these we have collected the certificate of conformity of the organic production and crushing standards of the EU. Thus in just one year we’ve became the leader at the market.

 

- What are advantages of the products made from organic materials? Are You able to find high quality sunflower seed in Ukraine? Are You planning on forward contracting of raw materials next year?

“UkrOliya Organic” capacity is dealing with crushing the organic raw materials only. The main products of the plant are organic sunflower and soybean oils, the main characteristics of which are the total absence of the pesticides, high nutrition value, natural vitamin content and also rich savor and aroma. The main derivative products are sunflower and soybean meal and sunflower pods.

But I should point that the plant supply by the raw materials is the issue of concern, as there is absent the single base for organic products producers. Thus, we have to search for them by ourselves. For now there are only 17 of such producers.

Moreover, I should note that the production of HO sunflower seeds in 2017 was lower year-on-year, so there is sunflower seeds deficit at the market, the premiums of which have also increased. So we negotiate with the agrarians concerning the long-term partnership, highlighting the advantages of the high oleic sunflower seeds production and further acreage extension.

Speaking about forward sales, it is a true perspective for the future MY, especially with those farmers we are in close collaboration.

 

- In what regions of Ukraine does Your company buy organic and HO sunflower seed?

For the moment, we purchase the seeds from all over Ukraine as there is no specifications towards the territorial identity. But most of the times the purchases are made from the production facilities of Poltava, Chernigov, Kharkiv and Sumy.

I should add that the acreages of sunflower seeds are going to grow. Moreover, the cancellation of the export VAT compensation for oil seeds should stimulate the agrarians to widen the acreages.

 

- What is the export geography of HO sunflower oil this season?

There is quite a wide range of countries importing our products, including Ukraine – e.g. the Netherlands, China, India, the USA, Israel, Lebanon, South Korea, Canada and Australia.

 

- What changes could be observed in Ukraine in terms of reforms and agribusiness operations? What else should the government implement to improve the business climate?

Firstly, it is the cancellation of the export VAT compensation.

Secondly – in my opinion, the government should pay more attention to the organic agriculture and livestock, i.g. there should be the promotion to change the dieting culture in Ukraine.

It is well known, that there is the global tendency to give up the transfats due to their negative impact on human health. Thus, many global corporations transfer to the use of HO oils instead of transfats and palm oil. I could even say that UkrOliya Company is a driver of this global tendency in Ukraine.

 

- What are the main global factors that affected the Ukrainian export agrimarket?

It should be noted that India raised the import tax on vegoils in order to stimulate the domestic producers that led to the global prices decrease.

Moreover, in 2016/17 MY El Niño led to the decrease of the production and ending stocks of the palm oil in Indonesia and Malaysia. Thus, the spread between the palm and sunflower oils have curbed in the context of record sunflower seeds production in Ukraine this season and the El Niño adverse effects.

 

- What are Your expectation of oil market development in the second half of 2017/18 MY? And what are the company plans for 2018?

If we talk about the oil seeds segment on the global market, there is a great possibility that La Niña could lead to the palm oil production cut in Indonesia and Malaysia, and also to the soybean production reduction in South America.

Speaking about UkrOliya Company plans for 2018 I would point out the purpose to develop the organic market actively in Ukraine as well as in foreign countries.

We plan to launch the bottled sunflower and soy oil onto the market, to increase the sun and soy meal sale volumes, find the new buyers of the organic sunflower pods.

Also, we are aiming at increasing the HO oil EFFO for cooking together with expanding the base of the HO sunflower seeds crushers.

Special mention would be made of the innovations and technical re-equipment of the production capacities.

 

- Finally, what do You think as expert of the key to successful company operation in agribusiness?

The key to success, when there are hard times at the market, is hedging, forward contracting of the raw materials and also stable marketing contracts.

It is important to save the marginality at the satisfactory standard. Also every company must control the quality of all the products it maintains – from the raw materials to the product delivery to the final consumer. Moreover, although there might be hard time for business making, you should still invest in your company, find the most advantageous ways to finance the ambitious projects in order to succeed in the future.

 

Interviewed by Viktoria Zelenaya, APK-Inform Agency

 

 

 

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