LOUIS Dreyfus Commodities Suisse S.A. and Brooklyn Kiev LLC announced last week that they have entered into an agreement to establish a joint venture for the development and management of a multi-commodity terminal in Odessa, Ukraine, and related activities.
The new terminal is expected to start the first phase of its operation in 2013, with Louis Dreyfus Commodities planning to transship its first grain cargo through the terminal in the coming months.
When all stages of development are completed, by around August 2014, the terminal will have a total grain storage capacity of about 240,000 metric tons.
"This is a key step in our investment strategy in the region and an excellent complement to our existing logistic assets," noted Jean-Marc Foucher, chief executive officer of Louis Dreyfus Commodities for Europe and the Black Sea. "The substantial growth in Ukrainian grain production and exports, which is expected to continue in the coming years — driven by higher yields, increasing corn crops and more efficient farming operations — requires efficient export channels. The Odessa terminal will be able to handle large volumes of grain and oilseeds quickly and effectively. This will help us serve our global clients more efficiently and will also benefit the agricultural sector in Ukraine as a whole."
The transaction, announced Oct. 17, is subject to certain conditions and regulatory approvals.
In addition, Louis Dreyfus Commodities LLC inaugurated a state-of-the-art grain and oilseed export elevator at the Port of Greater Baton Rouge, La., on Oct. 1 following construction, expansion and upgrades to the facility worth a total of $150 million.
The new elevator is designed to handle up to 5 million mt of grains and oilseeds annually during the first phase of its operation. These volumes are estimated to rise to more than 6 mmt after all planned improvements have been completed.
A significant portion of the products will be sourced from the farm communities immediately surrounding Baton Rouge, and the terminal will employ up to 60 staff when running at full capacity.
"Port Allen will be our flagship export facility on the Mississippi River and a major part of our North American export program, bringing local products to world markets," Mikael Morn, CEO of Louis Dreyfus Commodities for North America, said at the inauguration ceremony. "We will start moving product immediately through the terminal and are positioning ourselves to sustain and expand our leading presence within the grains and oilseeds export landscape in the U.S."
Further improvements are planned over the next two to three years, such as adding highly efficient storage and inbound logistics capabilities to optimize the handling capacity and efficiency of the export operations.