REFLECTING optimism for the growth of grain and oilseed production in the Black Sea region, DuPont opened a seed production facility in Stasi, Ukraine, roughly 357 km east of Kiev.
The $40 million facility was operational for the 2013 and 2014 growing seasons, supporting increasing demand for Pioneer brand maize, sunflower and oilseed rape hybrids in the country, the company said.
"This investment demonstrates DuPont's ongoing commitment to help meet the world's growing demand for nutritious food," DuPont executive vice president James Borel said. "This facility, built in one of the most productive maize and sunflower growing regions of the world, will provide Ukrainian farmers with superior products to meet their needs."
The DuPont Pioneer facility has roughly 70 employees and produces, stores and distributes some 500,000 units of maize and sunflower seed. Coupled with a logistics facility built in Stasi two years ago, the facility supports 70 field sales agronomists in the country.
"This investment shows our commitment with the country," Jeff Rowe, regional director for DuPont Pioneer Europe, said. "We want to be recognized as a key player in developing the Ukrainian agriculture sector, but we cannot do that alone, and we look forward to collaborating with local stakeholders."
Outside investors such as DuPont are increasingly setting up shop in the country, particularly in its agriculture sector. According to government data, capital investment in Ukrainian agriculture tallied more than $307 million during the first quarter of 2013, an increase of more than 10% over the same period last year.
"Between 2000 — when investment levels in agriculture were at their lowest levels — and 2012, we have seen high annual growth rates," Ukraine First Vice Prime Minister Serghiy Arbuzov said, noting that the country is working to spur investment through transparency and public/private partnerships. "Investors look for those sectors of agriculture where there is a high level of profitability, export opportunities, high rates of scale and better terms of liquidity of investments."
Indeed, the grain sector has grown considerably over the past decade and is projected to continue doing so throughout the remainder of the current decade. The U.S. Department of Agriculture's Economic Research Service (ERS) predicts that the area planted for grain production in the Ukraine will expand 20% by 2021, hitting 16.7 million hectares.
Yields are also expected to improve. ERS said maize yields are projected to increase 31.6% by 2021, and total production is expected to hit 26 million metric tons for 2013-14, according to the June "World Supply & Demand Estimates" from USDA's World Agricultural Outlook Board.
With policies in the country increasingly favorable to the export of surplus grain (Figure) and to increased domestic livestock production, a February ERS report explains that conditions are ripe for a developing grain and feed industry to continue growing.