To date soybean business is the most dynamic in Ukraine – Creative Group
One of the business area of the Ukrainian integrated agro-industrial Group Creative is soybean processing on the enterprise “Protein Production” and soybean oil and meal exports. To date the company is one of the leaders on the soybean market. The Chairman of the Board of the Creative Group, Yuri Davydov tells about the special aspects of the soybean business.
- The core area of the Creative Group is sunflower seeds processing. But during the last few years the company has actively position itself on the soybean processing market. What place does the soybean area take in the company business?
To date the Creative Group is among the top three biggest processors of sunflower seeds and soybeans as well. Last year the company processed over 1 mln tones of sunflower seeds owing the whole capacity utilization. In 2014 the company plans to hold the stated production level. As for soybeans, the processing volume totaled 171 thsd tonnes owing the total capacities exceed 270 thsd tonnes annually.
Totally, the Creative Group is focus on sunflower and soybean oil and meal, fat and margarine and biofuel pellets production. The agricultural area is represented with cattle-breeding and plant industry.
- Would provide with more details on soybean direction development?
The company decided to enter soybeans processing market in 2006, at the beginning of “soybean century” in Ukraine. We decided to found production from the start, that allowed to install modern equipment and introduce advanced technologies as well. In 2009 there was put into operation the first manufacturing line with the processing capacity of 88 thsd tonnes of soybeans annually (240 tonnes/day). The second manufacturing line with the annual processing capacity of 192 thsd tonnes of raw-materials (500 tonnes/day), was put into operation in 2012 and allowed to increase volumes by three times. Thus, to date Creative Group can process nearly 740 tonnes of soybean daily.
- Did the company divide the total capacities' start up in the segments? What is the reason of the stated decision?
Start up of manufacturing enterprise, its further development and capacity utilization are realized on a phased basis. At the beginning we needed time to estimate market capacity and its conjuncture, started with raw-materials assurance and end products (soybean oil and meal) sales.
Along with the major capacities, the company has built elevator complex in order to minimize risks on raw-materials purchasing. The elevator capacities total nearly 60 thsd tonnes of soybeans storage and allow to store the major part of raw-materials till the end of the calendar year. Also, elevator capacities allow to correct purchasing activity depending on market situation in the middle of the current MY (in April-May).
- Hurst put into operation the boiler for waste burning. Does the stated issue is economically effective for the company?
The soybean plant effectively uses the energy-saving technologies and alternative energy sources. It is part of the companies' global strategy. Creative group use by-products allowing to cover nearly 70-75% of energy needs of its enterprises by own resources.
The boiler-plant, put into operation in 2014, is the unique project for soybean sphere. In the current economic situation, the stated project allows to save over 1 mln cubic meters of gas monthly and nearly 300 UAH per each tonne of raw-materials. Thus, it is the additional margin for the company.
- The company holds the top positions on the high-protein soybean meal production. Who are the major consumers of the stated product?
Creative Group is one of the major meal producers. The major consumers of soybean meal with protein high content are the largest broiler poultry farms, feed-milling enterprises and pig complexes as well. The stated product is popular in Ukraine and CIS countries as well – Belarus, Moldova, Uzbekistan, etc.
The goal of the company is to produce high protein product. Thats why the company realizes the quality tight control for inward raw materials.
- What is the competition in the stated segment in Ukraine?
Among the largest enterprises-producers of high-protein meal there are «Protein production» (which is in Creative Group), «Astarta-Kiev», «Kakhovka Protein Agro”, «Oliyar”, «Pology Oil Extraction Plant PJSC. Aggregate capacities of the stated enterprises exceed 1 mln tonnes of soybeans annually and allow to produce nearly 700 thsd tonnes of soybean meal. According to the data of the company, the market capacity totals nearly 500 thsd tonnes annually. Thus, supply exceed s demand. In 2003 Ukraine imported soybean meal for domestic market needs satisfaction. But to date it is better to export stated products on foreign markets.
- What countries are the most prospective for Ukrainian soybean meal exports? What are the features ofthe Ukrainian producers compared to other countries?
The prospective are the Middle East markets, some of the European countries, and ones without developed port infrastructure. Creative Group – is the export-oriented company with the geography of foreign supplies of various products to nearly 20 countries. Our expertise consists of the effective logistics, service, containers stuffing and possibility of delivery of small parties of meal to the end consumer.
- How is the soybean quality offered by agricultural producers?
As processors we watch the quality while taking the product. According to the current demands in Ukraine soybean quality should correspond to DSTU protein level of 35%. We have statistics data of the long period of time. Thus in 2013/14 MY the average data on the protein level in the entering raw-material were at the level of 35.6-36.75% (absolutely dry substance). In the stated period we purchased nearly 210 thsd tonnes of the product which totaled nearly 60% of the corresponding quality raw-material from the general volume of checked soybean. The recent 40% we had to decline from further processing due to the protein low content. So if the producer does not face exact demands for product quality it will certainly influence the end commodity.
- So Ukrainian soybean meal is not in accordance with the world standards due to the raw-material quality?
The Ukrainian product quality is really worse compared to the countries, where protein content is higher: Argentina – 51.69%, Brazil – 52.92%, USA – 52.47%, meanwhile in Ukraine – 50.5%. So our market has where to follow, and lot of things depend on the agricultural producers, which have to grow soybean with protein content of 37% in the least.
Interviewed by Anna Platonova
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