KYIV - ED&F; Man, one of the world’s largest sugar trading companies, is investing $5 million in the first stage of a massive irrigation project in Kherson. The London-based multinational says support of local authorities encourages it to invest more.

“The first line of the complex, in which ED&F; Man has already invested $5 million, will allow for sugar beets to be grown on 1,000 ha in a zone of risky farming,” Igor Buchatskyi, country manager of ED&F; Man Ukraine, told the UBJ, referring to an area 175 km east of Odesa.

Now, the company plans to restore by 2020 a largely abandoned Soviet-era irrigation system on a total area of 20,000 ha in Kherson and Mykolaiv regions. Investments are to exceed $60 million.

A new automated irrigation system will ensure proper moisture for fields around a refinery owned by the company. It will solve problems encountered in growing beets in conditions of arid steppe.

Modern rolling watering systems are to make the steppe bloom again -- with sugar beets (supplied)

Challenge: Persuade a London Board

“Once we became comfortable with investing in Ukraine, we saw opportunities here,” said Jan Kees van der Wild, a Dutch executive for ED&F; Man who divides his time between London and Winterthur, Switzerland. “We are pleased that the issue of VAT recovery is getting under control so we feel more and more comfortable to invest.”

Overcoming investors’ fears of committing funds to Ukraine is a critical problem, Daniel Bilak, chief investment adviser to Prime Minister Volodymyr Groysman, told a ceremony opening the first stage of the new complex.

"It can be very difficult to explain to Western investors that in Ukraine there are regions where local authorities create the necessary conditions for big business and protect it from arbitrariness,” Bilak said. “And ED&F; Man, by its own example, helps change that attitude towards Ukraine.”

Kherson Governor Andriy Hordeyev told the ceremony that Kyiv allocated nearly $1 million for improving irrigation in his region this year.

“This indicates that both the state and business understand the importance of irrigation to southern Ukraine” he said.

ED&F; Man praised relations with Kherson authorities.

“Specifically here, in Kherson, relationships are fantastic,” van der Wild, managing director of commodities at ED&F; Man, later told the UBJ. “They are encouraging and helping us. We are all interested in the growth of the region.”

Full Cycle of Sugar Production

Ukrainian Sugar Company, a subsidiary of ED&F; Man, focuses on the full cycle of production: from seed to refined sugar.

Ukraine is widely seen as becoming a breadbasket for the world, said van der Wild, who manages commodities for a company active in 83 countries. Each year, ED&F; Man trades 11 million bags of coffee and 10 million tons of coffee.

“We see that the land market is opening up here and it is enormously fertile,” said van der Wild, who once worked in Brazil. “Once we fill the capacity of the refinery, there is absolutely nothing that prevents investing further.”

Founded in London in 1783, the company has invested about $150 million in post-independence Ukraine.

For comments and story tips, please contact UBJ Kyiv Correspondent Vitalii Dubenskyi at vitalii.dubenskyi@theubj.com

Photo: Jan Kees van der Wild, a Dutch citizen, worked in Brazil and now divides his time between London and Winterthur, near Zurich. He believes that Ukraine is on track to become a breadbasket for the world. (supplied)