The grain elevator launched last week in Nova Kakhovka, Kherson Oblast, is the first stage in the Kakhovka PromAgro's UAH 180 million (about $40 million) Soybean Oil Extraction Plant project. The oil extraction plant itself, Ukraine's largest, is expected to be commissioned in November this year, the company told the LED Monitor on Wednesday.
Photo from the web site of the Kherson Oblast State Administration
According to Kakhovka PromAgro Commercial Department Chief Serhiy Honcharenko, the investor is Freedom Farm International, a Kherson-based close corporation engaging in agriculture. The construction began about a year ago on a brownfield.
The elevator's capacity is 40,000 metric tons of grain, and for the time being it is used to provide services to rapeseed producers, Mr. Honcharenko said. The oil extraction plant will have an installed capacity of 700 metric tons of product per day. After a short adaptation period upon the plant commissioning, it will be able to process annually up to 240,000 metric tons of soybean, he reported. He also said the plant will be ecologically clean, meeting all relevant European standards.
The enterprise has already created about 70 jobs and will create about 100 more when the project is complete, Mr. Honcharenko said.
He said the plant in Nova Kakhovka has no equal in Ukraine for soybean processing capacity. It will use advanced hexane oil extraction technology. "There are enterprises in Ukraine that use this technology, but mainly for sunflower seeds," Mr. Honcharenko observed.
According to the Kakhovka PromAgro officer, most soybean-processing plants in Ukraine are of a press type and produce presscake, whereas the new plant will produce solvent cake, which has lower oil content.
"We want to fill our niche in the domestic market, and also envisage exporting to Europe," Mr. Honcharenko told about markets for solvent cake, which is used as fodder. Soybean oil, a byproduct used in food industry, will be also exported.
Explaining why Nova Kakhovka was chosen as the plant location, Mr. Honcharenko said the city sits in what he called a "soybean region." "Southern Ukrainian soybean is of quite high quality, and we are right in the center of the Kherson Oblast. It's very convenient from a geographical point of view," he pointed out.
Freedom Farm International, which has its crop areas mainly in the Kherson Oblast, will supply its soybean produce to the new plant but will not be the only supplier, according to Mr. Honcharenko. "The plant capacity will allow for processing not only our seeds but much more."
Business development and investment attraction, as well as tourism development, are general directions for economic development of Nova Kakhovka, as laid down in the city's Strategic Plan adopted in October 2007. The strategy was drafted by Expert Committee for Economic Development with assistance from the USAID LED project. A SWOT analysis done by the committee as part of the strategic planning process identified the "stable produce processing industry," "advantageous geographic and transport location," and "availability of significant amount of produce" among the city's strengths facilitating business development and investment attraction.
Presently, Nova Kakhovka along with three other cities and two raions of the Kherson Oblast is participating in a regional economic development pilot project. Although the region's key industries for the project have yet to be defined, it is believed that agricultural production and processing will be one of them.
