One of Ukraine’s greatest sources of potential wealth is its famous black earth, and private-sector agricultural holdings are among the fastest-growing companies. They will gain from steep increases in world food prices, and from WTO entry. And even basic improvements in efficiency will increase agricultural yields, which are at around 50–60% of the European average.
Roman Zakharov, strategist at Troika, says: “Once the land reform takes place, agriculture could be the next metals.”The land ownership laws – which bar the buying and selling of agricultural land – remain problematic, and most farms rely on long-term leases. But investment is pouring in. Targets include:
• Kernel Group of Lugansk, the largest marketer of bottled sunflower oil. It started in the mid 1990s as a trader, then acquired grain silos and agricultural land, and in 2004 started moving into branded oil products for the consumer market. Its majority owner is Andrei Verevsky. Some shares are traded on the Warsaw stock exchange.
• Astarta Holding, a vertically-integrated sugar producer, which owns five plants in Vinnytsya and Poltava, mostly fed from its own sugar beet production. It is listed in Kiev.
• Ukrros, another large sugar producer. Its president, Serhiy Fedorenko, announced early this year that it hopes to raise $20 million on foreign markets to fund the purchase of refineries in Ternopil region.
• Kreativ Group of Kirovograd, a major oil and butter producer, which has recently acquired a stake in a joint venture in Armenia. In November last year it privately placed $30 million-worth of shares among foreign portfolio investors. —S.P.