CARGILL announced that it has acquired a minority shareholding in a deep-sea port terminal on the Black Sea in Novorossiysk in southwest Russia.
The company has purchased a 25% plus one share indirect interest from DeloPorts Ltd. in its subsidiary OAO Kombinat Stroykomplekt (KSK).
The KSK facility has the capacity to handle 3.5 million metric tons of grain per year. Cargill will use a portion of the volume capacity, and the remaining volume will be available in the market. Cargill will also continue to use various port facilities throughout the Black Sea region to serve its customers around the world.
"We are pleased to announce this partnership with DeloPorts Ltd.," said Andreas Rickmers, head of Cargill's grain and oilseed operations in Europe. "This strategic investment is in line with our intention to grow our operations in Russia. It is our first investment in a Russian port on the Black Sea and will strengthen our offering to the market, providing a channel to connect our Russian grain operations to the rest of the world."
Rickmers continued, "Securing this vital step in their supply chain will also benefit Russian farmers, providing them with reliable access to global markets for their crops. It forms part of our growing focus to offer our farmer customers a range of services, advice and financial tools."
This latest investment follows Cargill's announcement in September that it has begun constructing a new sunflower oil crush plant in the Volgograd region of southern Russia. The port will add to Cargill's global network of grain and port facilities, including a joint venture in the Romanian port of Constantza on the Black Sea. It will allow the company to better leverage its global operations in order to feed a growing global population, supporting the movement of staple crops to areas around the world where they are needed most, the announcement said.
"This investment is mutually beneficial for the parties involved," said Natalia Orlova, Cargill's country representative and head of its food business in Russia. "It is an important element of our growing footprint in Russia, where we have been operating since 1991. We have invested more than $900 million across our portfolio of businesses in the country, making Cargill a leading investor in the agricultural sector."