Details of the transaction were not revealed, although the Financial Times reported that Cargill shelled out $200m for the stake. In a statement, ULF said the two companies would work together on business opportunities deemed “beneficial to both parties”, adding that ULF was working with Cargill’s grain division to help satisfy the processor’s supply demands.
It added that other projects were being discussed, including potential collaboration on logistics.
“The agreement with Cargill indicates an important step for UkrLandFarming in developing our international presence and export potential. It signals to the world not only the significant potential of UkrLandFarming, but the Ukrainian agricultural sector as a whole. We look forward to developing further relationships with Cargill,” said ULF CEO Oleg Bakhmatyuk.
The news comes days after Cargill reported that profits for the fiscal 2014 quarter ended 30 November were up 36% year-on-year to $556m.
The company’s Animal Nutrition and Protein segment posted a “significant” increase in earnings, which Cargill linked to “lower input costs, good price risk management and a well-managed mix of bulk, speciality and customised animal feeds”, as well as improved crop production. “Larger export volumes and increased operating efficiencies also contributed to stronger results, especially in beef processing,” it said.
Cargill, which already has businesses in Ukraine and neighbouring Russia, recently purchased a minority stake in a deep sea port terminal in Novorossiysk on the Black Sea. The company said this would open “an important channel” in distributing grain to North Africa, the Middle East and beyond.