Successful work on the European market requires strict meeting with the certification standards - Oliyar

Source

APK-Inform

2002

 

Ukrainian fat-and-oil commodities market has the high potential on the exports increase to the EU countries in particular. One of the top export-oriented companies which was able to achieve the significant results on the European veg-oil market is Oliyar company. Thus, Halina Skovron, the Deputy Commercial Director of Oil extraction plant PE Oliyar to tell about the features of work on the European market and the significant events of 2014.

About the company

Company "Oliyar" is one of the leading producers of vegetable oil in Ukraine, founded in 2003. The company is the producer of refined, crude sun oil, and the packed products of Mayola TM, Sonyashna TM and Rodynna TM as well.

In 2013 in Lviv oblast in Stavchany city the enterprise put into operation the new multi crop oil extraction plant. To date it is processing the rapeseed and soybean. On the territory of the plant there is the elevator for oilseeds storing with the capacity of 36800 m3. The soybean processing extraction shop maximum capacity is 1000 t/day, rapeseed – 1200 t/day.

Having the long-term experience of work on the domestic and foreign markets as weel, Oliyar PE has recommended itself as the stable supplier of the qualitative commodities.

 

- In the passed year there were a lot of events in the fat-and-oil industry. What prospects do you see on the Ukrainian fat-and-oil market and the soybean and rapeseed ones in particular.

In 2014 there was soybean production significant increase. Despite the major oilseeds yield rates worsening compared to the last year rate, the record production of soybeans was reached owing the planted areas increase under the crop. Note, in 2014 the oilseeds processing production capacities potential significantly increased and to date the offer on the sun seeds processing exceeds the demand for by-products on the domestic market. Meanwhile on the foreign market there is the Ukrainian soybean and rapeseed by-products increase. So in the nearest prospects there is expected the further change of the percentage ratio of the oilseeds processing volumes.

Ukraine face a stable increase in the area of the rapeseed processing, and our company, in particular, had the significant share in the stated segment. Firs of all it is based on increase of the attention for the rape oil exports. Meanwhile Ukraine is to open the rapeseed refining. On my view there are interesting business-projects being opened in the sphere.

 

- Your company has recently stated the rapeseed and soybean processing. Please tell about success in this area and what difficulties did you face? What tasks are there in your company?

Indeed, our first plant on the sun oil refining was founded in 2003, and in 2013 we put into operation the multi crop oil extraction plant for rapeseed and soybean processing. In 2014 since the end of July there has been worked out the rapeseed season. And in December, 2014 we started soybean processing and continue to work with the oilseed till the rapeseed new harvest.

In total we are satisfied with the results of rape seed season. One of the achievements is reaching the daily processing volume of nearly 1000 tonnes of seed saving the high quality results.

The complication is the currency exchange unstable rate. Besides, there is the deficit of the energy supply. But, despite the difficult economical and foreign political situation our company continues working efficiently.

To date we produce hydrated and crude soybean and rapeseed oils as well. But owing the growing demand we are now estimating the prospects of implementing the system of the full hydration. Besides there is the stable demand in favor of rape oil on EU side for biofuel production use – it is a great prospect for us. We have the most favorable location of production facilities for EU market.

The veg oil market is the high competitive sector, so you have to move forward all the time.

 

- In the first half of 2014 you plant was processing soybean. What are the features of 2013/14 MY and what prospects are there on the market?

In 2013/14 MY there was the record crop of soybeans and in the current season there is the record yield and crop as well – up to 3.7 mln tonnes compared to the last year 2.77 mln tonnes.

Soybeans planted areas face an increase despite the high competition being faced on the market owing their profitability and ability for being forecast on the market.

The soybean global prices face any trend under the impact of demand and supply. Besides there are a lot of other influencing factors. The main indicator is CBOT exchange.

In general we do not forecast the Ukrainian soybean prices increase on the export market – the significant pressure will be caused by great crop results in the major countries-producers (USA, Brazil, Argentina). Most probably the soybean currency prices reached their maximum level. On the domestic market the major factor of the prices increase is the national currency devaluation and the sales delay by the agrarians.

 

- In April 2014 the Council of the European Union on the Foreign Affairs has approved the unilateral cancellation of the custom duties on the Ukrainian commodities imports to EU. Is it possible to make the preliminary resume and to talk about veg oils exports increase to the EU countries? And was your enterprise successful in the volumes supplies increase?

Our success is the result of the daily work of all the stuff, and not only the custom conditions improvement. Of course the duties cancellation made the imports more attractive for EU. Though products exports increase depends not only on the duties. It is a hard work to enter the European market due to the necessity of certification compliance.

However, if you increase the exporting volumes there is the logistics issue due to the wider rail track compared to EU one which is causing costs increase – the temporary and the monetary ones.

 

- What else is able to promote the active sales of the commodities to the EU? Please tell about your products exports geography, and rape and soy oils in particular.

Of course in EU there are high demands for quality and safety of the products being supplied on the market, and veg oils and meals in particular. But in order to reach success on the European market you have to perform the contract obligations, the company reputation and stability.

In order to be successful in Europe you should think as the European, be the European in your soul. Our major clients are the companies of the near abroad countries (Poland, Lithuania, Belarus, Czech Republic, Slovakia, Romania, Moldova). The export geography is based on the close borders to the territorial disposition of our company. We also plan to expand the export geography: we are working through the ports with large-scale traders, watching close the strategically important Eastern Asian markets. It is rather large-scale and interesting and prospective market.

 

- How did the commodities production profitability and prime-cost change, and what influenced the changes? How did the corporate debt financing of the agricultural enterprises in 2014 (how did the credit interest rates change, and do the banks introduce additional risks in the contracts etc)?

Due to the war events in Ukraine the rating of our country is falling down fiercely. The investors are watching close the opportunity to work with the Ukrainian companies and are not ready to provide the investments. Besides the costs of the investments increased to 12% and more as opposed to the previous comfortable 8-9% (in the foreign currency), meanwhile in the national currency the stated rate increased by 2-5% compared to the last year rate. The stated fact impacted the prime-cost of the produced commodities. Another one significant negative factor is the energy supplies cost increase in 2014 which is causing the prime-cost increase.

 

- In order to finish our conversation please tell what would you wish to the market participants in 2015?

In 2015 I wish all the market participants the political stability, predictable currency exchange rate, further steps for mutual integration with the global economical society and the favorable external environment for business.

Interviewed by Viktoria Zelenaya

 

 

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