The European Bank for Reconstruction and Development (the EBRD) and the Food and Agriculture Organization of the United Nations (FAO) consider an experience of the leader of the Ukrainian agrarian market – “NIBULON” to be a key one to ensure food security in the Black Sea and the Mediterranean. The EBRD President Suma Chakrabarti informed about it during the international conference “Promoting Private Agricultural Investment and Trade from the Black Sea to the Mediterranean” organized by the EBRD and FAO in Istanbul (Turkey), on September 13.
The conference “Promoting Private Agricultural Investment and Trade from the Black Sea to the Mediterranean” was the first event where representatives of business, government, international financial and public organizations seriously discussed problems of food supplies from the Black Sea basin to the Mediterranean one and back, and a role of such supplies in the global food security.
Besides the EBRD President Suma Chakrabarti at the conference there were other participants, namely FAO Director Jose Graziano da Silva, Ministers of Agriculture of Turkey   (Mehmet Mehdi Eker), Bulgaria (Miroslav Naydenov), Egypt (Salah Mohamed Abdel Moemen), Deputy Minister of Agriculture of the Russian Federation Ilya Shestakov, Secretary General of the Organization of the Black Sea Economic Cooperation Victor Tsvirkun, Chairman of the Committee of the Parliament of Kazakhstan on Agriculture Romin Madinov. Besides, at the conference there also participated other managers of the state food corporations of Ukraine, Kazakhstan, Morocco, Serbia, Jordan, Turkey, directors and leading experts of financial institutions: the Arab Authority for Agricultural Investment and Development, the Asian Development Bank, the European Bank for Reconstruction and Development, the International Finance Corporation, the Islamic Development Bank, and the World Bank. The managers of more than one hundred leading producers and food importers in the region also visited the conference.
When opening the conference, FAO Director Jose Graziano da Silva announced, “Let us be honest – while there is hunger in the world we cannot feel completely free ourselves. Without your participation in solving this problem, food security is out of the question. And it is also impossible to reach food security in a separate region”. According to the EBRD President Suma Chakrabarti, development of agricultural logistics is one of the key challenges to food security of the whole world. “Development of transportation system and grain storage allows not only to ensure supply of food to final consumers in time but also to protect from price shocks”, he added.
The participants of the conference unanimously positively appreciated and supported an idea to popularize practices of the largest agricultural company of Ukraine – “NIBULON” concerning construction of infrastructure and facilities to store grain crops, development of cargo navigation on the main rivers of the country. Besides, at the conference there was noted that “NIBULON” contributes to solving the world hunger problem. The company is the only exporter in Ukraine which supplies grain crops according to the contracts with the UN World Food Program.
In his turn, General Director, Hero of Ukraine Oleksiy Vadaturskyy thanked the EBRD management for trust and long-term cooperation due to which the company has been taking the leading positions in the market of grain export from Ukraine and has been successfully implementing its patriotic investment project to revive navigation on the Dnirpo and the Southern Bug rivers for the last six years.
“It is very successful cooperation with the European Bank for Reconstruction and Development. When we started cooperating with the EBRD, we attracted attention of the state financial institutions of Denmark, France, Holland, the USA, Sweden, and Norway. We received propositions concerning assets allocation to purchase equipment of these countries for our infrastructure development,” mentioned Oleksiy Vadaturskyy. “According to him, at the same time it is quite difficult to work with the government of Ukraine in this direction”.
The problematics of cooperation between business and government became one of the key topics during the first panel of conference in Istanbul, and Oleksiy Vadaturskyy’s speech, where he shared his experience in solving problems and confrontation with bureaucratic apparatus, was greeted with a storm of applause from the audience.
“Pricing for grain in the Black Sea basin depends on the meetings of the Cabinet of Ministers of Russia or Ukraine. And we live from a meeting to a meeting. Will the limitations be introduced or not? Pricing for both producers and grain receivers from different countries depends on it. I would like to ask the heads of governments and ministers to conduct policy more reasonably then there will be predictability in pricing for both agrarian sector of all our countries and for our receivers. And there will be more guarantees of food security”, mentioned O. Vadaturskyy.
Due to implementation of its unique investment project, the company can extend the geography of its presence. According to the general director of “NIBULON”, at present one of the strategic directions of development is cooperation with such countries as Egypt. “I am sitting next to the Minister of Agriculture of Egypt, and, probably, he may not guess that our company exports more that 50% of grain products to Egypt from Ukraine. Our specialists underwent training in Egyptian laboratories and passed examinations. Today Egyptian people are frequent visitors of our company and follow all shipments of “NIBULON’s” products from Ukraine. Our company was an initiator of sorghum growth in Ukraine. We have analyzed that it is better to grow sorghum than barley. By a crop yield sorghum is better than barley in 3-4 times. Thereafter, this crop is more profitable for farming. We might promote sorghum from Ukraine. In Egypt there is a duty of 5% and we together – Ukraine and Egypt – might fill the market of Egypt if this duty was reduced”, O. Vadaturskyy addressed to the Minister of Agriculture of Egypt Salah Mohamed Abdel Moemen.
During one of the topical panels dedicated to cooperation of the state bodies with private agricultural companies in the context of ensuring food security, Deputy General Director of “NIBULON” Andriy Vadaturskyy informed that the company is going to extend its presence in Tunisia actively. “We supply from 40 to 70 % of all import of food grain to this country. We are completely satisfied with all tender procedures. They are transparent and without any tricks. But we think the government and companies of Tunisia should pay more attention to the port infrastructure development including seabed dredging in order to take vessels with large deadweight and to optimize expenditures for logistics,” he noted.
During the final press-conference the EBRD President Suma Chakrabarti announced that an experience of “NIBULON’s” activity and its unique investment project to develop infrastructure of the Ukrainian grain market and to revive navigation on the Dnipro river and other rivers of the country in this direction is very important to ensure food security of the region. “The EBRD takes an interest in spreading the best practices of doing business among its customers. I am sure we have a lot to be adopted from “NIBULON” as regards logistics or export markets and cooperation with government”, he added.
According to the EBRD Director for Agribusiness Gilles Mettetal, the key achievement of “NIBULON” is improvement of production efficiency that leads to reduction of prime cost of grain for an exporter and, consequently, an increase of its availability for final consumers. “It is a priceless contribution to food security of the region”, mentioned G. Mettetal commenting on “NIBULON’s’ activity within the conference.
According to him, the EBRD, which in July decided to allocate up to USD 130 mln syndicated loan to “NIBULON” for business development, carries on negotiations with the company to finance the next infrastructure projects and the EBRD is also going to share “NIBULON’s” experience with other countries. “We are proud to work with such a company – one of the best companies in Ukraine. A lot of companies, inspiring by “NIBULON’s” example, want to implement similar projects. The EBRD goal is to share the best practical experience and to stimulate business development, that is why we are very glad to make this investment”, added G. Mettetal.
According to estimates of the EBRD Senior Economist for the Eastern Mediterranean Region Heike Harmgart, a large-scale implementation of projects to develop infrastructure, logistics, and food storage, such as “NIBULON’s” project to revive the Dnipro and the Southern Bug rivers as transport waterways, allows to reduce expenditures of farm workers for production of commodities and to reduce pricing volatility in the market. “According to our calculations, such infrastructure projects can double a share of such countries as Ukraine, Russia, and  Kazakhstan in the world grain market”, stressed H. Harmgart. According to her, following “NIBULON’s” example, thousands of companies ask the EBRD to finance their projects on construction of fleet or facilities for food stuff storage. “For example, we will soon implement such a project in Romania”, expert added.
H. Harmgart informed, “Also North Africa and its markets is a new prior direction for the EBRD. Today we are searching for companies that are ready to invest in these territories. And in this case “NIBULON’s” activity will be irreplaceable in terms of construction of ports as well as in terms of grain logistics to these ports”.
The key role of the company in ensuring food security of the North African markets is acknowledged by FAO. “NIBULON” is a prospective supplier for North Africa. It is a company which was developed from a small one. During its development “NIBULON” went through many things. The North African markets are quite exacting to product quality and price shocks from which the companies suffer there. It is connected with trade, sanitary and phytosanitary requirements. I think an experience, obtained by “NIBULON” in Ukraine, will help in solving similar problems when supplying products to the North Africa”, FAO Economist of the Investment Center Dmytro Pryhod’ko told the journalists.