Agroholdings to push out traditional grain traders, drive terminal consolidation in ports – Olir Resources CEO

Ukraine's agricultural export market is undergoing a phase of cleanup and consolidation, as a result of which large agroholdings with their own logistics capabilities will become the key players, said Ivan Niyaky, CEO of port operator Olir Resources.

"Over the past six months, the market has been significantly cleaned up. When transshipment rates fell back to pre-war levels and efficiency criteria began to apply, opportunistic capital left the sector. Around 20 large terminals remain today, and we will continue to see a trend toward their consolidation," he said at the Forbes Agro conference in Kyiv on Thursday.

According to the head of Olir Resources, agroholdings now dominate the market, including Epicentr, TAS Agro, and others that are actively investing in their own infrastructure.

"This is entirely logical: if a company, with its own railcars, elevators, and a base terminal, can export one million tonnes of its own products, it can easily export another million tonnes for its neighbor. The top ten agroholdings are now very actively seeking terminals in which to acquire their own stake or full control. For traditional traders that do not have their own assets, the situation is becoming very difficult," Niyaky said.

He added that despite transshipment rates returning to pre-war levels, terminal operations are complicated by attacks on energy infrastructure. Currently, terminal capacity in the ports of Greater Odesa exceeds available cargo volumes, resulting in half of the terminals being underutilized. This forces operators to independently cover the costs of autonomous power supply.

"Switching to diesel generators costs us about $1 per tonne. When a trader's margin is between $0 and $3, they cannot absorb these costs, and they fall on our shoulders. We simply need to endure and adapt to the circumstances," the Olir Resources CEO explained.

Niyaky also drew attention to unequal railway logistics conditions: the tariff to the port of Port of Pivdenny is $2.5 lower than to Port of Chornomorsk, which is critical for stevedoring companies.

"When terminals are operating on the brink of cost recovery, those two and a half dollars become decisive. These are no longer the days of $20–25 per tonne transshipment. Today, such a difference creates extremely tough competition, and we are trying to communicate this problem at all levels," he emphasized.

Summing up, Niyaky pointed to the impossibility of long-term planning in wartime conditions.

"We have the product, the people, the harvest, and the logistics, but we lack predictability. Today we operate in a mode where we revise our strategy daily because of its irrationality," the head of Olir Resources concluded.

The stevedoring company and grain trader Olir Resources was founded in September 2015 at the port of Chornomorsk (Odesa region). It specializes in freight forwarding, transshipment of liquid bulk cargo (capacity of up to 1 million tonnes of oil per year), and grain (floor storage warehouses of Eco-Resource-Holding with capacity of 50,000 tonnes and the modernized Warehouse No. 24).

According to YouControl, since November 2021, the company's ultimate beneficial owner, through Company Investland Ltd (Seychelles), has been Dmytro Danylov.