For fat-and-oil industry of Ukraine which is showing stable development and increasing sun oil production volumes and exports it is rather principal to have developed infrastructure. Continuous and qualitative operation of oil producing enterprises, terminals is the counterpart of fat-and-oil industry work in general. We interviewed the General director of OREXIM Group of companies, Sergei Prysyazhnyuk about what was the season-2014/15 for one of the holdings of Ukraine which is exporting veg oils and agricultural cargoes and providing the full complex of services in the agricultural cargoes' logistics.
- OREXIM includes the number of business-directions in agroindustrial complex. Please tell more detailed about fat-and-oil direction. What results have you reached in the past season and what difficulties did you meet?
Indeed OREXIM Group of companies takes active positions in the agroindustrial complex, to date we have over 12 business-directions.
One of them is fat-and-oil direction. We are proud of our terminal EVERI which in the period of its operation and since 2010 increased freight turnover to the level of over 835 thsd tonnes annually, which allowed it to tale the first line on the shipment volumes, according to the data of NOVIK agency in 2014 among the 14 terminals of Ukraine shipping veg oils on water transports.
Sales increase on the global market favored storing and shipping capacities expanding.
Sun oil proper exports of OREXIM reached nearly 200 thsd tonnes annually.
Regarding the difficulties - is the general adverse situation in Ukraine in connection with military operations in the east of the country. Because of the situation Ukraine ceased to receive the investment, and completely lost foreign lending. Note also there are considerable difficulties with lending within the country. There are still unsolved issues of VAT refund from the budget for exporting goods, there are problems with the "transparency" of the market and business ethics counterparties. We tightened the selection of suppliers of oil and work only with trusted and reliable companies which regularly perform their obligations and work within the law.
- How strong was the national currency devaluation impact on company work in general? What strategic decisions were taken for successful functioning of the company on the market under the conditions of currency exchange market high volatility?
Of course unstable USD exchange rate to UAH is strongly impacting the activity of sales and purchases and our company is not the exclusion. For successful work the financial specialists of Group control the dynamics of currency exchange market in order to provide safe conditions for traders work.
- What is your products exports geography (veg oils, meal/ cake?) Please, tell how changed the requirements of the major countries-importers (India, China, etc.) to Ukrainian oils quality, sun oil in particular?
Exports geography is rather wide for oils and bulk cargoes as well. If we talk about oils, in the recent time the Asian markets mostly purchase sun oil and rape oil and soybean oil as well. The major problems are GMO problems and residual solvent.
Regarding protein products the major directions are Turkey, Spain, Italy, Greece, Egypt, Morocco. The major requirements are first of all protein and fat content.
- Ukrainian soybean oil has being exported on global market in rather positive temps. Please tell if there are advantages and what are the prospects of the Ukrainian product on the global market? What sales markets are most attractive?
Ukrainian soybean oil market has been developing rather active. The industry is increasing the soybeans processing capacities. There has always been a demand for the product but we were not able to satisfy it due to the insufficient volumes on the domestic market and non-compliance with international standards of quality. To date we cooperate with the range of the leading producers which supply qualitative product. Regarding Ukrainian soybean oil realization we are interested in Asian countries which have already assessed the quality of the product.
- Ukrainian rapeseed oil production is still at low level, but last season there was exports geography reorientation to the Asian markets instead of European ones, Chinese in particular. Please tell more detailed about Asian markets prospects for the Ukrainian products. What risks do the Ukrainian companies face usually?
Rapeseed oil production is at the low level compared to the sun oil or even soybean oil, but note that in the recent two seasons there has been oilseed processing volumes increase. Last season we processed rapeseed on customer-owned scheme and ready to note it is profitable.
Chinese market is actively purchasing rapeseed press oil though the paid prices is not always competitive compared to Europe one. Therefore Chinese market is on the way of development.
- What factors will be the key ones for price formation on the Ukrainian export and domestic markets of veg oils in 2015/16 MY?
As always the key implements in the price formation of veg oils on global markets will be global balances of oil and raw-material, energetics, fund, currency exchange markets prices dynamics and the large-scale players the ones as China, USA, Argentina, Brazil. The domestic market depends first of all on currency exchange rate, the domestic processors consumption and the global prices.
- Sun meal/ cake market is facing more stable price situation. Please tell about features of trade in the segment, what countries imported product in 2014/15 MY? Do you plan to starting work with soybean meal/ cake considering its surplus on the domestic market?
We work with sun meal and cake all the time, have a lot of contracts with the number of European countries and Middle East. Soybean meal is interested as a product so we plan to start working with it next season. As it was mentioned above regarding soybean oil Ukraine has learned to produce qualitative product which is appropriate with global standards. The same we can confirm for meal – buyers are ready to work with Ukrainian product with protein 45+. Therefore we are interested in complex approach for producer: buying meal we have more favorable conditions for oil purchasing, and plant-producer – possibility to increase producing capacities.
- OREXIM plans large-scale terminal building for grains and oilseeds shipment in Mykolayiv. Please tell about the project.
Indeed, currently the Group considers the project on construction of a terminal for bulk cargo shipment. Currently we have stores, from which we ship the protein products, grains and oilseed, but we understand that it needs to be expanded. It is necessary to separate storage, completion and proper quality control. It will attract additional resources in Mykolaiv oblast, provide new jobs for the population.
Interviewed by Anna Platonova
