Rotterdam-based Louis Dreyfus Company (LDC), one of the world’s leading traders in agricultural commodities, is expanding its presence in Ukraine by setting up its own logistics group.
The unit will acquire up to 1,000 specialised hopper rail cars to transport grain from points of production to the main cargo-handling facilities in the port of Odessa.
To help finance the capital investment programme, LDC has signed a loan agreement with the European Bank for Reconstruction and Development (EBRD).
The EBRD is advancing US$35M for the project, which it said will significantly increase the effectiveness of grain-handling logistics in the country and strengthen Ukraine’s competitiveness in the global market.
The move will mean more grain moving in the most modern rolling stock, and it should result in a shift from trucking services. Indeed, LDC claims that its investment in the new railcar equipment could cut its CO2 emissions in the country by 8,510t per year.
The new logistics group will give LCD better control over its operations in Ukraine and should lower supply chain costs and reduce transit times of moving grain for its customers. Further efficiencies will result from its investment in a new grain-handling terminal in the port of Odessa.
By the end of 2019,construction of the new berth no. 1-z and grain terminal should have be completed and, with deeper water alongside, bigger ships with improved economies of scale will be handled.
Its design throughput has been estimated at 3 Mtpa. The project, which commenced in late 2012 and has encountered many challenges, involves the participation of the Ukrainian Sea Ports Authority (USPA), LDC and Brooklyn-Kyiv LLC
This year, Ukraine is expecting its farmers to produce a record grain harvest of more than 72 Mt, with an estimated 70% of it being sold into overseas markets. Its efficient transport is, therefore, hugely significant for the country’s economy.