For the third consecutive year, NIBULON celebrates its founding anniversary in wartime.

The ongoing war continues to test us by military risks, a stagnant economy, and labor shortages, compounded by this year’s drought and falling global market prices.

As a result, profitability in trade activities remains low both in Ukraine and globally. However, NIBULON has managed to maintain stability, continue its development, and keep investing in Ukraine without subsidies or grants. We are ending 2024 with the following figures: export volumes of 3,126 thousand tons, a 5% market share, remaining one of Ukraine’s leading grain exporters pivotal to the future of the agricultural sector.

Since the start of the war, NIBULON has been in survival mode. We are talking about a choice between bankruptcy and changes. Two years ago, we chose changes, enabling us to save the company. This year, amidst ongoing transformation, our focus shifted to greater efficiency. Every division strives to rapidly become the best version of itself.

Our resilience is rooted in our ability to adapt quickly to changes.

• Despite $0.5 billion in confirmed wartime losses, our actions and results have demonstrated our ability to fulfill our obligations. We have completely restructured our loan agreements with Ukrainian banks. We are in the final stages of signing agreements with international financial institutions.

We have also secured new financing from the state-owned Oschadbank, a long-term loan for 15 years from EIFO, Denmark, and trade financing from several international banks totaling $70 million. We are calling on FMO, the only remaining bank, to support both our company and Ukraine. We are grateful to all our partners for believing in our team, our updated business model, and our transformation.

• Amidst disrupted export channels, we invested $22.5 million to build a new transshipment terminal, Bessarabska branch in the Danube ports, in record time. This allowed us to resume purchases and exports through Constanța, Romania, when Odesa ports were inactive, and to achieve record transshipment volumes of 250,000 tons of grain per month.

This year, for the first time in its history, Bessarabska branch sent a seagoing coaster to Turkey. Thus, we have recouped our investment in the new terminal. Since its inauguration, the branch has shipped over 3.8 million tons of grain and oilseeds. The branch successfully ensures export capacity of both NIBULON and Ukraine.

• · Despite the difficult situation in the agricultural production sector, we had the courage to change the philosophy of our approach, focusing on efficiency and profitability through investment. Not everyone believed in our financial capability to invest $17 million during the war, but we managed to do so. We thank our partners HARDI, CLAAS, and EIFO for their support.

Thanks to these changes, we saw the results of our investment in the first year of working in a new format. For the first time in many years, we achieved profitability, and this success has already been reflected in the income levels of our employees and landowners. In 2023, we paid lease payment for the plots in Mykolaiv region, which could not be cultivated due to landmines. In 2024, we were able to increase payments and, in most communities, payments were 10–15% higher than market rates. This trend will be maintained. NIBULON has a strategic intention to significantly increase its land bank.

• Next in line to achieve profitability is the elevator division. This year, following the reorganization and optimization of the management system and technical maintenance of the network started in 2023, we have completed the modernization, fundamentally changed our approaches to quality management, launched a Lean transformation, and continue the automation process.

As part of the modernization, new facilities have been built at Khmilnyk branch with an investment of $3.4 million, including the use of modern dryers. These investments have proven to be justified; this branch is now able to receive products from regional agricultural producers and is one of the largest in the system in terms of volume.

At AK Vradiivskyi Ltd., we are testing new technologies that optimize production processes. The investment in this facility amounted to $1.2 million.

Kolosivskyi Elevator Ltd., one of the oldest among NIBULON’s branches, has been revived through minor capital investment and improvements in overall administration.

In the area of quality management, we have completely changed the laboratory equipment and automated its operation, making the quality determination process fully transparent for agricultural producers. We invested $845,000 in the purchase of Infratec devices from FOSS; the devices are unique in Ukraine.

All devices have been integrated into a single network with the possibility of remote calibration, which is also implemented in our country for the first time. The automation projects are ongoing. This year, they covered quantitative and qualitative accounting, and next year they will cover deeper aspects with the help of a SCADA system. Thus, our business model is being transformed, which in its new form provides for digital interaction with suppliers and requires new skills from the team. Accordingly, we are heavily investing in training to update the professional expertise of our personnel. Next year, we expect these changes to lead to increased network utilization and profitability.

•Following the overhaul and large-scale renewal of our truck fleet, completed in 2024, the logistics department will now focus on new ways to achieve efficiency per every ton and every kilometer. We also aim to establish a maintenance system for our vehicles and develop a model that will eventually allow us to offer these services to other organizations. Additionally, we will continue to increase the share of cargo transported by our own fleet, ensuring cost reduction; we will expand our service geography along the Middle and Upper Danube.

We are involving our government in the further development of the Danube ports. Currently, they require support through reducing port dues and increasing volume of Ukrainian grain shipped via Constanța as an alternative hub for road transshipment. At the same time, we are not giving up on reopening the port in Mykolaiv. In our appeals to the international community and the country’s leadership, we advocate for the port and the interests of Ukrainian agricultural producers who are currently unable to benefit from the grain hub that processed 30% of Ukraine’s export flows before the war.

• In 2023, the activities of the trade department were focused on strengthening loyalty and deepening cooperation with Ukrainian agricultural producers. The key goal is to become a convenient digital partner that enables them to earn more through transparent and flexible access to global market opportunities. The first steps have already been taken. After introducing the Supplier’s Account in 2023, which digitized document workflow, this year we are launching the NibulOn-Line mobile app, a digital assistant in NIBULON’s consumer ecosystem. We are helping agricultural producers manage profitability by mitigating risks through exchange trading, etc.

In terms of working with the efficiency of export chains, the trade department plans to find an effective solution to combine the interests of Ukraine and Europe in Constanța, Romania.

· In 2023, we started our end-to-end digitalization to identify the most efficient solutions to meet the needs of NIBULON. For this purpose, NIBULON Digital was established. Within a short space of time, the team developed a strategy that would allow us to build a new two-tier digital landscape for the company. The first tier relates to our production complex, spanning from the field to the end consumer. The second one is customer-related and relates to our interaction with agricultural producers.

In 2024, we focused on implementing the planned initiatives, integrating, standardizing, and optimizing processes, while simultaneously strengthening the resilience of our IT infrastructure. In 2025, we will focus on advancing the systems already in place and integrating consumers into the company’s new digital environment to develop and expand our cooperation.

• · We have also reformed our corporate governance structure. In 2023, we were the first company in Ukraine to switch to a one-tier model by creating the Board of Directors. This collegial executive body started working at full capacity this year, when we were strengthened by three highly experienced non-executive directors – Christian Salatko, Marion Lefevre, and Dirk Kuiper. We thank them for their willingness to shoulder responsibility for the company’s future during a challenging period associated with uncertainty in Ukraine.

I believe that our team’s ability to adapt to new conditions and withstand external pressure is the prerequisite for the success of all our current and future initiatives. To ensure the safety of our employees and business, we relocated our head office to Kyiv, significantly improved working conditions, and prioritized safety at our branches. We have started implementing some systemic elements of vertical management development, such as a talent pool, a competency model, and a 360° feedback.

All these elements shape our focus and priorities in development and training. This year, we doubled our investment in training and will continue to increase the pace of upskilling and retraining, ensuring sustainable professional development and stable income for our employees.

Looking back, I can say that NIBULON has been meeting challenges with dignity. I am proud of the team with whom we are facing all the challenges, as well as the 682 employees who are defending us in the Armed Forces of Ukraine. Without a doubt, we are making history.

Whatever the future holds, giving up is not an option. The only way is to struggle, to conquer both ourselves and global markets for the sake of our children.

With immense gratitude to the Armed Forces of Ukraine, our employees, and our partners
Andriy Vadaturskyy
CEO