LDC’s Elevator Day: how agro-exporters cooperate with small farmers

AGRI-Ukraine Export Logistics Support
20 June 2024

On June 12, USAID’s Economic Resilience Activity (ERA) attended Louis Dreyfus Company’s (LDC) Elevator Day in Vinnytsia Oblast. More than 50 local farmers were invited to the event to showcase the Rakhny elevator operated by UkrElKo, part of LDC, and promote future cooperation. LDC’s last Elevator Day was in 2019, before the Covid-19 pandemic and the full-scale war.  

At the event, the Rakhny elevator representatives highlighted their grain storage capacity, modern upgrades, a new wagon rental service, and laboratory, to entice future cooperation. The elevator has a storage capacity of more than 140,000 tons. With the help of the onsite laboratory, UkrElKo can dry, ventilate, conduct pest control measures, and maintain proper conditions for the grain with modern equipment.   

       

Grain moves from the Rakhny elevator using LDC’s 1,200 wagons to the Black Sea ports. USAID provided LDC with 85 additional wagons to build their fleet and accelerate the export of grain.  

“In May, LDC transported 245,000 tons of grain – 10% by USAID wagons – reducing logistics costs for farmers” says Bohdan Shveda, the Head of the Wholesale Trade Group at LDC Ukraine. 

This season, LDC is testing a wagon rental service to farmers because transportation by rail is twice as cheap as by road. Bohdan Shveda explains how it works, “a farmer can bring several batches of grain to us at the elevator, we will collect and store the grain in a separate silo. Then the farmer will load their grain into a wagon rented from us and transport it independently for export. So far, this is only an experiment, but if we see farmers interested, we plan to make it permanent. In May, dozens of farmers used this service.”  

Mrs. Tetiana Kokyza is a farmer from the Shargorod district of Vinnytsia Oblast. Her family cultivates more than 2,000 hectares of leased land, where they grow wheat, rapeseed, barley, and other crops. She has been cooperating with Rakhny elevator for more than 20 years and attended the Elevator Day event.  

“We are interested in reliable partners. We have never been disappointed here; if we bring grain in the morning, the next day we collect our money,” explains Mrs. Kokyza, Head of the Agricultural Enterprise Khliborob. She continues, “If in addition to a good purchase price, Rakhny can also help with logistics, provide wagons and trailers, it will greatly help us to independently export, so we are interested.” 

The harvest will begin in Vinnytsia Oblast in July. Despite the challenges—weather conditions, war, and labor shortages—farmers hope for a good harvest and to get market prices for their grain which is bound for export to countries around the world to ensure global food security. 

USAID Helps Reduce Nibulon’s Logistics Costs Despite Russia’s Blockade 

AGRI-Ukraine Export Logistics Support
07 June 2024

On May 31, USAID, through its Economic Resilience Activity (ERA) delivered 13 grain trailers, each with a carrying capacity of 25.5 tons, to Nibulon. These trailers will reduce grain transportation costs and facilitate further exports.  

The USAID provided trailers will reduce Nibulon’s transportation costs by 20 percent and reduce dependence on rentals from third-party providers. Nibulon currently owns 212 grain wagons and 139 grain trailers.  

Nibulon’s Director for Interaction with Public Authorities, Mykhailo Rizak highlights how important the 13 grain trailers are in their strategic logistics pivot, responding to the Russian blockade of the Dnipro and Pivdennyi Buh river ports. The USAID-provided trailers will transport grain from Nibulon’s headquarters at the blocked river ports to the Odesa ports. 

Starting in 2023, USAID provided Nibulon with 50 grain wagons, grain testing equipment and samplers, three generators, two truck scales, and two train scales. USAID support allows Nibulon to mitigate their asset losses due to Russia’s full-scale invasion and continue to export grain, despite Russia’s blockade. 

Assistance to agricultural producers and infrastructure companies is part of the Agriculture Resilience Initiative (AGRI) – Ukraine, implemented by the United States Agency for International Development (USAID). It aims to help Ukraine increase its capacity to produce, store, transport, and export grain.      

USAID ERA delivered grain wagons to Cygnet  

AGRI-Ukraine Export Logistics Support
05 June 2024

USAID Economic Resilience Activity (USAID ERA) delivered 15 grain wagons to Cygnet, a group of agri-companies growing grain and oilseeds in Ukraine. Cygnet expects these 15 wagons will increase grain exports, optimize logistics costs and reduce transportation service provider dependence. These wagons were produced in Ukraine by the Ukrainian manufacturer Karpaty Plant.  

Cygnet uses wagons to transship grain via rail within Ukraine and it usually rents wagons from third-party providers. Renting wagons during the peak season subjects Cygnet to rates fluctuations and availability, leading to periodic disruptions in transshipping. The USAID-funded wagons, the first owned by Cygnet, will reduce Cygnet’s demand for rented wagons by 10%, provide consistent shipping capacity, and reduce disruptions. 

In 2022, after Russia’s full-scale invasion, Cygnet pivoted to alternative export routes. All alternative routes proved less efficient and more expensive, so when the Grain Corridor reopened, Cygnet returned to the traditional Black Sea port channels.

Background: Assistance to agricultural producers and infrastructure companies is part of the Agriculture Resilience Initiative (AGRI) – Ukraine, implemented by the United States Agency for International Development (USAID). It aims to help Ukraine increase its capacity to produce, store, transport, and export grain.

How to provide the world with ukrainian food was discussed at the Grain Ukraine conference

AGRI-Ukraine Export Logistics Support
05 June 2024

On May 30-31, USAID Economic Resilience Activity (USAID ERA) and 14 of USAID ERA’s agri-exporting partners took part in the 9th annual Grain Ukraine International Conference in Kyiv. The theme this year was “Grain in the Time of Chaos” and participants focused on finding new ways (political, economic, and logistical) to promote Ukrainian agribusiness on the global market.  

USAID ERA’s Supply Chain and Expert Logistics Lead, Thomas O’Callaghan and AGRI Private Partnerships Relations Specialist, Elvira Aleksyeyeva attended to meet with partners to understand the latest market trends. 

The conference focused on reviewing global trends which influence Ukrainian exports to the global market, the prospect of EU integration, the challenges of the war, and creative solutions to tough logistical problems. 

Petr Krogman, the owner of Agromino—USAID ERA’s partner—and President of the Czech-Ukrainian Chamber of Commerce, spoke on a panel discussion citing challenges Agromino faces during the war and ways to overcome the regional imbalance. Mr. Krogman had just come from Kharkiv Oblast, where Agromino had just sowed their fields for the season. Mr. Krogman noted that

“We sow to preserve economic life in these regions. It is necessary for the border regions to survive.” 

Unfortunately, businesses like Agromino, operating in Kharkiv Oblast are severely disadvantaged. Overall, the average cost of production on fields on the eastern boarder are 40-50% higher than in the western regions of Ukraine. Many agricultural areas are now militarized zones and unfit for use and companies face additional costs to demine their land. Mr. Krogman believes that incentives and compensation programs from the government can significantly help companies continue to work near the contact line. 

Another USAID ERA partner feeling the heat of the war is Nibulon. On a panel, Mykhailo Rizak, Nibulon’s Director of Interaction with Authorities discussed the negative impact of legislative changes on Nibulon’s land bank. He continued by explaining how Nibulon is reviving mined land back to a safe field suitable for cultivation and he emphasized the need to demine water areas to ensure the safety of sea vessels. 

Moreover, USAID ERA’s partner Kernel, represented by Oleksandr Golovin, Commercial Director spoke about the importance of the Black Sea on a panel. Mr. Oleksandr also predicted the next marketing year will be the manufacturer’s year.   

Looking forward, USAID ERA’s partner Ukrainian Grain Trading Company (UGTC) emphasized training programs which will help future businesses. UGTC’s co-owner, Serhiy Verenkiotov, was grateful for the equipment USAID provides but stressed the significance of developing labor potential at the conference. 

Similarly, Kateryna Rusina, the owner USAID ERA’s partner Ascet Shipping, is looking forward to create future reliable business connections at the Grain Ukraine conference.  

Assistance to agricultural producers and infrastructure companies is part of the Agriculture Resilience Initiative (AGRI) – Ukraine, implemented by the United States Agency for International Development (USAID). It aims to help Ukraine increase its capacity to produce, store, transport, and export grain.

USAID Enhances Almeida Group’s Grain Export Capacity 

AGRI-Ukraine Export Logistics Support
20 May 2024

USAID, through its Economic Resilience Activity (ERA), delivered 25 grain wagons to the Almeida Group, a rail freight and truck logistics provider in Ukraine, to increase its grain export capacity.

Almeida Group will use the wagons to transport grains to the company’s terminals on Ukraine’s western border, in Zakarpattia Lviv and Chernivtsi Oblasts, where it transships grains and oilseeds from wide gauge wheelsets (1535 mm) with European gauge wheelsets (1420 mm), as well as to the ports in Odesa and Izmail (Odesa Oblast).

The full-scale war has fundamentally changed the company’s operations. Until February 2022, Almeida Group had two elevators in Donetsk and Luhansk Oblasts and was one of the largest shippers in the region. After Russia’s invasion in 2022, the company lost all its production facilities, significantly impacting its business. However, Almeida Group managed to relocate almost the entire team from the temporarily occupied territories and, in May 2022, opened a new transshipment terminal in Chernivtsi Oblast. Later, it also opened two more terminals in Lviv and Zakarpattia Oblasts. Currently, Almeida Group is building a multimodal terminal in Chernivtsi Oblast, which will increase both the quantity and variety of export cargo.

Background: Assistance to agricultural producers and infrastructure companies is part of the Agriculture Resilience Initiative (AGRI) – Ukraine, implemented by the United States Agency for International Development (USAID). It aims to help Ukraine increase its capacity to produce, store, transport, and export grain.

Agricultural companies’ mechanics are learning to maintain industrial generators

AGRI-Ukraine Export Logistics Support
17 May 2024

13 mechanical engineers and electricians from 4 Ukrainian agricultural companies—partners of USAID Economic Resilience Activity (ERA)—took a maintenance training course on industrial generators with a 2000 kW capacity. The training took place in April at Ostroh Higher Vocational School in the generator repair and maintenance laboratory. The training was organized by the International Foundation of Development with the support of USAID ERA.

The training included an online course accompanied by a practical generator testing section in the laboratories. This knowledge will help professionals properly maintain generators during power outages caused by Russia’s attacks on Ukraine’s energy infrastructure.

“At Baryshivka Grain Company, we have five generators that require maintenance and proper operation to ensure uninterrupted production processes at the elevator. The training helps us in maintain these units. Also, it would be interesting to attend lectures on grain dryers and transportation equipment at the elevator,” said Konstiantyn Kovalenko, an Engineer at LLC Baryshivka Grain Company.

Recently, USAID ERA purchased 10 high-capacity diesel generators for 6 agricultural companies in Ukraine. This will help to maintain all company operations, including grain transshipment, storage, and loading into wagons or trailers, even during blackouts.