Korea’s largest trading company Posco Deawoo Corporation has entered into an agreement with Ukraine’s largest exporter of sunflower oil OREXIM to jointly develop and manage a grain terminal at Mykolayiv Sea Port. According to Capital Times, advisors to Orexim and SORTIS’s partner in the Globalscope M&A Advisors network, the acquisition is to further develop the grain terminal in the Mykolayiv Sea Port on the Black Sea and to position Posco as a global grain trader. A stake in the terminal would improve South Korea’s food security and Posco would be able to control the logistics of Ukrainian production grain, reduce the risk and enable efficient inventory management. The new terminal will have expected capacity of 2.5 M tonnes of grain a year and will be fully prepared and put into operation in July 2019. Financial terms of the deal were not disclosed.
Orexim is a Ukraine-based company engaged in export of agricultural products, port, and logistic services. Orexim operates two logistics firms and is the fourth-largest exporter of corn and the sixth-largest exporter of wheat in the world. The group owns the grain export and storage terminal located in Mykolayiv Milling Complex. The terminal is a storage unit with capacity of over 140,000 tonnes used to store grain stacks before shipment for overseas delivery. Such terminals are used by traders to balance their business risks, as they can keep in storage the grain stacks when prices are low and ship when prices rise. Apart from storage, the terminal also controls processes for purchasing and inspecting grain produced across Ukraine.
Posco Deawoo Corporation is engaged in the trading of a wide range of products from steel, automotive components, machinery, and industrial electronics to non-ferrous metal, food resources, chemicals, commodities, and textiles. The company also plays an active role in overseas resource development projects in oil, gas, mineral, and food industries. Posco operates in 51 countries and has ca. 8,000 employees. By acquiring the terminal, Posco aims to fulfill their new growth strategy to become a global grain trader and plans to contribute to Korea’s efforts to strengthen food security as Asia’s fourth-largest economy heavily depends on imports for the nation’s grain supply. In 2017, the country brought 10 M tonnes of corn and 5 M tonnes of wheat.