by Staff Writers
Kiev (AFP) Jan 13, 2014
US agricultural trading giant Cargill has acquired five percent of Ukraine's biggest farming producer Ukrlandfarming, as the companies team-up to boost exports to China and other emerging markets.
The deal was finalised late last month, a statement from Ukrlandfarming said on Monday without providing financial terms, though the Financial Times said the stake sold for $200 million, which values the company at $4 billion.
"The agreement with Cargill indicates an important step for Ukrlandfarming in developing our international presence and export potential," said the Ukrainian billionaire and chief executive Oleg Bakhmatyuk.
Ukraine's fertile fields, known for their rich black soil, are becoming a prized target for the world's biggest commodity traders looking to satisfy Asian markets hungry for produce.
Ukraine harvested a record 63 million tonnes of grain last year and is looking to export a huge 32 million tonnes in the next harvest.
The push to export comes during an acute economic crisis in Ukraine made worse by political turmoil brought on by a feud between the pro-Russian government and the West-leaning opposition.
Ukrlandfarming posted sales of $1.9 billion in 2012 and manages 532.000 hectares of grain fields with 1.6 million tonnes in storage capacity.
If Ukraine's targets were reached, the former Soviet republic would surpass Russia to become the world's third biggest exporter.
China is a ready buyer. Faced with unrelenting urbanisation, the world's second biggest economy is increasingly looking to shore-up food supply by multiplying international investments.
Farming Today - Suppliers and Technology
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