America's Bunge expects to remain among leaders in

booming Ukrainian agribusiness

A fairly recent addition to Ukraine's major agriculture and food companies,

nevertheless Bunge has since 2002 gained a reputation for its community

involvement and outstanding human resource practices. Founded in 1818 in

Amsterdam as an export/import trading firm, Bunge has gone on to become a

recognised world leader in global agribusiness.

Bunge's integrated operations, now headquartered in the United States,

circle the globe, stretching from the farm field to the retail shelf. The

Bunge family in Ukraine is a part of 22,000 employees worldwide at over

450 facilities in 32 countries, all dedicated to improving the global

agribusiness and food production chain.

HELPING UKRAINE TO GLOBAL

SUNFLOWER DOMINATION

Bunge Ukraine's operations are an extension of the company's Agribusiness

and Edible Oil Products divisions. The Agribusiness division is one of the

world's largest oilseed processors and a major global grain trader, while

the Food products division is a major supplier of edible oils and

shortenings to food processors and foodservice customers, and is a leading

supplier of consumer edible oils and related products in select markets.

Bunge is the world's largest seller of bottled vegetable oils to consumers

and has played a major role in making Ukraine a world centre for sunflower

seed oil (sunoil) production and marketing.

A CHALLENGING ENVIRONMENT TO DO

BUSINESS

Dmitry Gorshunov, Managing Director of Bunge Ukraine made it clear in an

interview with Business Ukraine that the company considers its Ukraine

operations a part of the company's long-term strategic plans. "Bunge fully

intends to continue its growth in Ukraine. The Ukrainian environment is

challenging but with those challenges come opportunities," Mr. Gorshunov

says.

Bunge first invested in Ukraine through its 2002 purchase of Cereol, which

at the time owned a Dnipropetrovsk facility that processes sunflower seed 

to

make bottled cooking oil. Since that initial purchase Bunge has increased

the size of the Dnipro facility by 50%. In addition to its extensive sunoil

operations, Bunge has purchased several grain elevators and has also

invested in construction of another oilseed processing facility in

Illyichevsk.

Already a leading sunseed processor through its facility in Dnipropetrovsk,

the company has recently finished commissioning a jointly-owned sunseed

processing facility in Illyichevsk. Bunge plans to operate the new plant

during the coming season, and consider opportunities to crush alternative

crops there as well, such as rapeseed.

In addition, Bunge have substantially grown its capabilities in grain

origination over the past several years. In 2005/2006 (the last season in

which grain exports were not restricted by government quotas), Bunge was 

the

leading exporter of grains from Ukraine. Since then the company has 

invested

in its grain elevators.

INVESTING IN A FUTURE WORLD LEADER

However, Bunge believes it is more important that the company has built a

strong team to handle trading, risk management and logistical support. 

Bunge

has already negotiated a substantial throughput agreement with one export

grain terminal, and is  working to negotiate another.

"High commodity prices have sent a call to farmers worldwide that more

grain and oilseeds are needed.  Ukrainian farmers are uniquely positioned 

to

respond to that call, as there is a lot of room to improve farming 

practices

and inputs, especially as funding becomes increasingly available.

"We at Bunge believe that Ukraine will become one of the world's major

suppliers of grain and oilseed products, and we intend to participate in

that growth by investing further in the human and physical infrastructure

needed to bring Ukrainian products to the world," Gorshunov says.

On the food side of its operations Bunge is currently the second largest

supplier of bottled oil to Ukrainian consumers. Its flagship brand, Oleina,

was the first refined, bottled oil in Ukraine, and it remains one of the

strongest brands in the market. Bunge says it will continue to invest in 

its

food business and is actively exploring new avenues for growth including

other categories beyond bottled oils.

DEFYING THE RAIDERS: A LONG-TERM

COMMITMENT

Bunge has been the target of so-called raider attacks that have made life

difficult for some other foreign investors in Ukraine. However, Gorshunov

made it clear that such attacks will continue to be very vigorously 

repelled

and will not discourage company management and employees who support

the company's strong position as a good corporate citizen.

"Bunge has for the past several years suffered repeated attacks from

corporate raiders. These attacks have taken a wide variety of forms, 

ranging

 from lawsuits regarding our shareholdings and brands, to media attacks and

even pamphlets making ridiculous allegations against the Oleina brand. 

These

attacks have caused us to divert a lot of time and effort from our business

into legal defences and public relations work, but they have not changed 

our

overall strategic direction in Ukraine.

"Throughout this process we have continued to build our business, invest in

our people and invest in our infrastructure. Moreover, we believe that as

Ukraine is increasingly integrated into the community of nations through

trade and through vehicles such as the WTO, such issues will subside and

Bunge will be able to focus its efforts on building its business, which in

turn will help to bring economic growth and individual prosperity to

Ukraine," Gorshunov concludes.

businessukraine.com.ua