One of the largest Ukrainian companies has been preparing for the termination of the agreement with the Russians for a long time

By RockedBuzz 4 Min Read

The decision of the late CEO of Nibulon, Oleksiy Vadaturskyi, to create an export route through the Danube was a lifeline for the Ukrainian grain exporting giant. This strategic move was made in order to create a safer alternative to the uncertain wartime export by sea. Black Sea grain exports are now on shaky ground after 16 months of war, which has seriously affected the Nibulon company founded by Vadatursky.

Oleksiy’s son and successor, Andriy Vadatursky, considers this decision one of the main reasons why Nibulon managed to avoid bankruptcy. He refers to it as a “survival kit” left behind by his father. After Russia’s February 2022 invasion, which led to a blockade of vital sea exports, the Danube became Nibulon’s main export route, through which it transports 190,000 tons of grain per month compared to zero before.

In order to increase its capacity, Nibulon has built a terminal on the Danube, on the southwestern edge of Ukraine, and is currently developing a third berth. This expansion will allow them to handle up to 250,000 tonnes per month starting in August. Andrij does not even trust the Black Sea grain agreement.

In the economic year 2022-23, about half of Nibulon’s exports were transported via the Danube. This rate has since increased to 70-80% increased compared to the quantities shipped through ports covered by the UN-supervised agreement. Andrij admitted that although it is more expensive than using the Black Sea route due to the less developed infrastructure, they chose this safer logistics route involving the Danube.

The invasion caused Nibulon’s exports to drop by about half, while logistics costs skyrocketed. In the economic year 2022/23, 2.34 million tons were exported compared to 4.6 million tons the previous year. Pre-war costs to ship grain inland were $12 per ton; however, those costs peaked at $154 in August before settling to the current $70-$75 range.

Oleksiy Vadatursky and his wife tragically lost their lives in July when their home in Mykolaiv was hit by a Russian missile. Over fifteen years, he made significant investments in logistics, which enabled Nibulon to become Ukraine’s largest grain exporter by increasing river transport capacity and developing the fleet in Mykolaiv, as well as its own shipyard.

However, most of these investments were destroyed last month after the Nova Kahovka dam was destroyed and the reservoir drained. The company also suffered significant personnel losses as people fled or served in the army or died during the war.

Despite this, Nibulon has managed to maintain its financial stability and is currently in restructuring talks with creditors, including the European Bank for Reconstruction and Development (EBRD), the International Finance Corporation (IFC) and the European Investment Bank (EIB). It is currently Ukraine’s third or fourth largest exporter.

Source: Reuters

Cover image: Getty Images

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