Exports of high-quality products to improve the financial results - Astarta

Source

APK-Inform

2100

 

 

In 2015, the company Astarta successfully changed its development strategy, shifting the focus from the domestic market of Ukraine towards the foreign one. In terms of some instability of the foreign exchange rates, political and economic crisis, such decision allowed to the company to increase its revenues and reach positive financial results. At the same time, Astarta not just increased its volumes of deliveries to customers, but also entered new markets and started improving the qualitative parameters of its products. The Commercial Director at Astarta, Nataliia Trokhymchuk kindly agreed to talk with APK-Inform Agency about the achievements and priorities in development of the holding.

 

 

- How do You estimate the trading terms in 2016 in comparison with the Ist quarter of 2015? Taking into account the trends on the world market, and the company's operating results in the Ist quarter of the current year, what is the probability of achieving the same trading induces in the whole 2016?

Generally, our company shifted its focus from sales on the domestic market towards the exports. In 2015, the global market did not really contribute to the growth of prices for agricultural products, but nevertheless, due to the sales diversification and expansion of markets, as well as improving the efficiency of its own production capacities, Astarta started demonstrating very good results.

And our financial report for 2015 confirms such trends. Despite not very impressive global trends, we expect for further improving of operating results in the first quarter of 2016, in comparison with the same period last year.

 

- Astarta is the leader in Ukraine for sugar production. In 2015, the company broke its own record in the exports of the commodity (34 thsd tonnes), with some decrease in the planted areas under sugar beet. What countries are the main customers of Your company?

Ukrainian sugar market is quite complex, unpredictable and locally controlled. Therefore, the domestic prices rarely follow the global trends, like other commodities do. Of course, decreasing of the consumer demand from Donetsk, Lugansk oblasts and the Crimea affected the supply and demand balances of sugar in Ukraine. The market received some surplus products. Astarta with its long-period experience in the industry, used its capabilities, and the exports became quite effective tool for growth of the sales. To date, our main task is to increase the share of exports, even though it is not easy to realize. The countries of the Customs Union and the European Union do not really want to see us on their markets. They often impose various limitations on the imports in form of the customs duties and quotas.

But we are actively negotiating with other partners, and gradually coming to the markets of Middle East, Arab countries, as well as Azerbaijan, Kazakhstan. It is important that in terms of rather low domestic demand, the local sales would be supported by the export direction.

 

- Astarta presents itself as the leading producer and processor of soybeans in Ukraine. How do You estimate the company's activities in the soybean segment in the current season?

Yes, the company is really one of the leading producers of soybean products in Ukraine. The qualitative indices of our products are the highest ones. Our company exports 100% of soybean oil, and not less than 70% of soybean meal.

Soybean meal and soybean oil, which are produced by Astarta, are partly unique in Ukraine, because our factory is the only one in the country which produces nonGM-products. Therefore, we successfully come to new markets, which allows us to improve the financial results.

In January-March of 2016, we significantly expanded the sales geography: the EU countries which traditionally consume the South American soybean meal, and India, South Korea, which are just discovering a new product - Ukrainian soybean meal. We are largely pioneers, and many other oilseed processors follow us.

I think that due to high quality of soybean products, our future is in development of expensive premium food markets. Astarta is ready to guarantee quality of the product at the level of the highest international standards, which is confirmed by numerous international certificates.

 

- What are the most prospective markets for Your sales of soybean by-products?

As for the supplies non-GM soybean meal, India and South Korea are the most perspective markets for us, and they are premium markets. Although, there is no such thing as "premium for non-GM oilseed meal", but the markets are open to us due to the fact that our product is not genetically modified. The markets of India and South Korea consume only non-GM products, and to date we ship nearly 30-40% of the general supplies of soybean meal to the region. As for soybean oil, we ship nearly 90% of the exports to China.

To date, European companies started actively participating in purchases of non-GM soybean by-products. So, we supply the commodities in the direction of Europe and North Africa.

As for the Caspian Sea region, we sell soybean meal to Georgia, and are actively negotiating on the exports to Iran and Azerbaijan. There is a very specific practice of international trade with Iran. Also, we consider the Caspian region as one of the most prospective markets.

 

- How much is the market of Azerbaijan prospective for Astarta?

The market is quite interesting, we even tried to supply not only soybean meal to the country, but also sugar, and are looking forward to increase the share of exports to Azerbaijan. There are some logistical problems with the exports to Azerbaijan due to the transit restrictions imposed by Russia, but we continue trying some alternative delivery options.

We continue actively negotiating with Azerbaijani companies to sell soybean meal, and if we can find some common points - we will do the business.

 

- What are the most profitable supply chains in the delivery of agricultural products from Ukraine to the Caspian region?

We have examined all possible options to realize cargo transportation. We tried the variant of carrying goods by ferry to the port Poti, and then to neighboring countries. For example, there is the possibility of goods supplying to Iran via Georgia. But the most optimum variant is ship delivery in Georgia, and then to the country of destination by motor transport.

 

- What are the prospects of the Trans-Caspian route for agricultural cargoes delivery from Ukraine to the Caspian region countries and China?

We have not tried the variant yet. It is quite longtime shipping method. According to the companies which have already shipped their cargoes by the Trans-Caspian route, it is too long and expensive.

To date, many market participants are quite skeptical about the prospects of development of the reporting direction.

 

- What countries do You cooperate with for the supplies of soybean meal?

Belarus was always the most favorable direction for us, as for many oilseed meal producers in Ukraine. But to date, the direction is temporarily closed. But due to very convenient location of the plant in Poltava oblast, Globyne, we are logistically roughly equidistant from all borders, and it is also our advantage. Therefore, we successfully cooperate with customers on the western border and in the ports.

Traditionally, European companies from Hungary, Bulgaria, Poland, and Moldova purchase our product for many years. Our trading relations are quite stable and long-lasting.

Our soybean meal is already identified in India, which is the new sales market for us, as "Astarta meal": buyers know that it is the product with high protein content (46-48) and none-GM.

We are actively exploring new markets: moving to the East, we discovered the markets of China, India and South Korea. In addition, in the nearest future we are optimistic about the markets of Africa. We are expanding our relations with Uzbekistan, Kazakhstan, Azerbaijan and other countries of the Caspian region. High quality standards of our oilseed meal open up good prospects and new markets for Astarta.

 

 

- What are the major features of non-GM soybean processing at the plant of Astarta?

To date, we are the single company in Ukraine, who can qualitatively change between GM and non-GM soybean processing, and do it successfully. Astarta grows only non-GM soybeans throughout own planted areas, but it is necessary to re-purchase nearly half of the volume for oilseed processing operations, and it is nearly 100-120 thsd tonnes. If the commodities of other suppliers have GMO content at the level of 0.9%, then we separately accept such soybeans. In similar way, we divide the processing of GM and non-GM soybeans: all clean all lines and then start working with non-GM soybeans only.

One of the major directions for us is to increase the efficiency of Globyne soybean processing plant, productivity improvement, and diversification of produced commodities. We do not plan to increase the plant capacities yet. Generally, we expect that soybean processing rates in Ukraine will increase: to date, the index covers nearly 30% of the production volumes in Ukraine, there is a good potential for growth. The general harvest of soybeans in Ukraine totals 4-4.2 mln tonnes, and the processing volumes – nearly 1-1.3 mln tonnes.

 

- What do You think whether Ukrainian soybeans and soybean meal have any prospects in China?

I do not think that Ukraine will export soybean meal to China in the nearest future, because there are some limitations for the product imports to the country. Soybeans are quite interesting for the Chinese consumer, and we are certified to export the oilseed to China, the only question is price formation.

 

- Your company is one of the largest agricultural producers in the country. How do You estimate the prospects of grain and oilseed crops harvest in Ukraine in 2016?

Generally, we have quite optimistic prospects for grains. Wheat losses will not have any significant impact on the harvest volumes. Rains will contribute to the planting campaign development and renewal of winter crops vegetation. The harvest of grains in Ukraine will not face any problems.

As for soybeans, the situation will become completely clear after the end of the planting campaign. To date, agrarians still continue planting the oilseed, and the high moisture content in the soil is favorable for planting works. Also, we have a good forecast for sunflower seed: the planted areas will increase, because the oilseed is considered as the most marginal trading crop among all other crops.

 

Interviewed by Maya Pletenets

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