Kernel Glad To See Export Quotas Go
By Andrzej Szurek
The Ukrainian government wants to help agricultural producers. Export quotas for cereals and sunflower oil will soon be lifted.
Kernel, a Ukrainian producer of sunflower oil, may benefit from the lifting of export quotas for agricultural products. A week ago Kiev decided to lift export quotas for cereals and now seems ready to abolish export quotas for sunflower oil.
No Export Quotas
By 1 September, the export quotas for oil are 300 thousand tons. The majority of the quota went to Kernel Trade, a subsidiary of a corporation listed on the WSE, and its main competitor, Bunge. The Ukrainian government is planning to lift the quotas. “Lifting of the quotas would send a very positive
signal to the market,” said Natalia Khvostova, Kernel’s Press Officer. According to Khvostova, the Ukrainian corporation is happy with the quotas awarded by the government. But other companies in the sector are complaining that most export quotas for oil went to Kernel and Bunge.
The developments of the past few weeks suggest that Kernel has very good relationships with the government, and not only concerning the quotas. In mid-May, the local anti-monopoly office slashed the penalty levied on Kernel for hiking the prices of bottled sunflower oil. Instead of UAH 60 million (PLN 27 million), the fine was only UAH 1 million (PLN 450 thousand). No wonder that Kernel has a good relationships with officials if the company’s CEO and main shareholder is an MP from the ruling
Yulia Timoshenko Block. Nevertheless, the head of the agricultural holding Andrey Verevskyi says his focus is on business, not politics.
Recently the CEO of the agricultural corporation said Kernel is negotiating the acquisition of a large company in Ukraine.
Large Acquisition In The Pipeline
The deal may be closed in August. “We cannot reveal any details of the transaction,” said Natalia Khvostova. It is known, however, that Kernel wants to invest US$ 170 million (PLN 357 million) in its agricultural business this year. This is a part of the strategy of the Ukrainian producer and distributor of sunflower oil and cereals which provides for expansion of the agricultural business segment.
These plans led to the quickly prepared issue of shares in early March when the company raised some PLN 190 million. Even before the WSE IPO, the company had around 30 thousand hectares of land. This year Kernel said it signed preliminary agreements with agricultural companies which have 26 thousand hectares of land under long-term lease.
No Quotas Help Stocks
Yesterday Kernel stocks gained 4.68 percent with a turnover of PLN 19.6 million. Investors probably reacted to Kiev’s quotas decision and the announced acquisition plans. The March and May decisions of the anti-monopoly office did not bother Kernel investors.