Nam Hyun-woo has worked as a staff writer at The Korea Times since 2013, mostly covering business and politics. He currently belongs to the Business Desk where he covers topics such as emerging tech, AI, ICT and Korea's chaebol community. Prior to joining the team, he was the paper's correspondent for the presidential office of Korea during the Yoon Suk Yeol and Moon Jae-in administrations.
POSCO International opens grain terminal in Ukraine
POSCO International CEO Kim Young-sang, fourth from left, poses with officials during the completion ceremony of the company's grain terminal in the port of Mykolaiv in southern Ukraine, Wednesday. From third left are Mykolaiv City Mayor Oleksandr Syenkevych, Kim, Mykolaiv Oblast Governor Oleksandr Stadnik and Orexim Group Chairman Yuri Budnyk. Courtesy of POSCO International
By Nam Hyun-woo
By Nam Hyun-woo
POSCO International has completed a 2.5 million ton capacity grain terminal in Ukraine, expediting the trading firm's new business expansion, the group unit said Wednesday.
CEO Kim Young-sang, Orexim Group Chairman Yuri Budnyk and more than 300 company officials attended the completion ceremony of the terminal, based in the port of Mykolaiv in southern Ukraine.
Mykolaiv Oblast Governor Oleksandr Stadnik and Mykolaiv City Mayor Oleksandr Syenkevych also attended the ceremony, showing the Ukrainian government's interest in the project.
The terminal, in which POSCO International has a 75 percent stake, is one of the main export hubs around the Black Sea, capable of shipping up to 2.5 million tons of goods, including corn and wheat, a year.
POSCO International signed the purchase agreement for the terminal's operating rights with Orexim Group in February. POSCO International was POSCO Daewoo at the time.
Ukraine is one of the world's emerging grain-exporting countries, with its food production volume doubling to 77 million tons in 2017 from 40 million in 2007. Of this, exports increased fivefold to 43 million tons from 8.5 million tons during the same period, making the country the world's No. 4 exporter of corn and No. 6 for wheat.
By acquiring the rights, POSCO International can have logistics control over a significant amount of Ukrainian grain coming into the terminal. Approximately 22 percent of Ukraine's grain exports are shipped through Mykoliv, according to POSCO International.
“POSCO International aims to become the largest food resources firm and the terminal is the centerpiece of the company's efforts to expand its food value chain,” Kim said. “The partnership with Ukraine, which is world's leading grain market, will help Korea to improve its food security and allow POSCO Group to meet one of its 100 corporate goals.”
In November, POSCO Group Chairman Choi Jeong-woo announced 100 tasks that the group should pursue, including the expansion of its food trading business.
POSCO International has been expanding its grain selling business since 2015. It sold 840,000 tons of grain in 2015 and increased the volume quickly to 4.37 million tons last year. The company expects it will sell 5 million tons of grain this year, including 1.2 million tons of Ukrainian grain.
“POSCO International expects the volume will reach 10 million tons in 2023 and the Ukrainian terminal will play a pivotal role in accomplishing the goal,” a POSCO International official said. “Along with the company's main businesses of steel and energy trading, we believe grain trading will become one of the main pillars driving the company's sustainable growth.”
The completion of the grain terminal is expected to contribute to a stable supply of grain to Korea.
As of 2017, Korea's food self-sufficiency rate was 48.9 percent, far below leading countries such as Argentina with 273 percent, Uruguay with 232 percent and Ukraine with 193 percent. When it comes to grain, Korea's rate plunges to 23.4 percent, far below OECD nations' average of 85 percent.