NIBULON is a vertically integrated Ukrainian company and a leader in the domestic agrarian market. It is one of the largest agricultural commodity producers, investors, and exporters. On December 5, 2021, the company will celebrate its 30th anniversary. Established in 1991, when Ukraine declared independence, NIBULON, together with the country, continues to improve and to become stronger.The company takes leadership positions according to Ukrainian financial statistics, and not only in the agro-industrial sector. NIBULON enjoys good business standing among financial institutions and partners. At present, NIBULON is one of the largest investors in Ukraine’s economy – having invested more than USD 2.3 billion. Since 2009, the company has been implementing its large-scale efficient investment project to revive the Dnipro and the Southern Buh as navigable transport arteries. As part of the project, the company develops and improves entire sectors of the Ukrainian economy. The company has revived shipbuilding, built the highest capacity and most modern fleet in Ukraine, and created a well-developed infrastructure of high-capacity river transshipment terminals. The company is especially in the limelight every time the mass media publishes information about loans madeto NIBULON by world financial institutions. Why does NIBULON take loans? How does the company make money work for itself and Ukraine? We have discussed these issues with NIBULON’s Chief Financial Officer, Olha Babanina. – Olha Babanina, how does NIBULON manage to have a perfect credit history over 30 years and to enjoy the confidence of first-class foreign financial institutions and domestic partners?– The work of a financial department is the unique characteristics of each company. NIBULON is a really unique company. It is a world-renowned supplier of high-quality grain, successfully
developing up-to-date inland logistics. NIBULON is developing despite obstacles, breaking stereotypes and implementing the world’s best practice, inventions, and technologies, reviving sectors of the Ukrainian economy. Our company has learnt to develop a transparent market economy from the best democratic countries, thereby earning confidence and trust. Pioneers always face difficulties. NIBULON’s team, created and headed by Oleksiy Vadaturskyy, is always goal-oriented. I would like to remind you a historic fact that helped the company not only to survive, but also promoted its efficient development. Having passed scrupulous inspections, NIBULON, a private company, was the first Ukrainian agrarian company to obtain a loan of USD 5 million from the IBRD in 1998. It was an unprecedented large amount at that time. The company repaid a loan before its scheduled repayment date.NIBULON’s good business standing enabled the company to obtain investment loans of more than USD 1.5 billion from the World Bank, IBRD, EBRD, IFC, EIB, FMO, DEG, and other leading financial institutions. These funds were allocated to develop exports, energy efficiency programs and grain storage, as well as to improve logistics in Ukraine, testifying the company’s good business standing. – Why does such a large and powerful domestic investor use loans? How many financial institutions does NIBULON work with?– Our company is really a powerful investor in the domestic economy. To develop efficiently and purposefully, external investment is also important. Attracting loans is extremely important.Lending is a world practice for business activities. Money must work. On the one hand, additional credit funds help a company to develop more efficiently, but on the other hand the amount of loan portfolio must be strictly controlled and grounded.The company’s loan portfolio includes three main types of financing, namely investment loans or loans for certain development projects provided by international companies, as well as trade financing and loans provided to replenish the working capital.An investment project is not just financed by borrowed funds; it usually consists of borrowed funds (75%) and own funds (25%).The largest investment loans signed and obtained during the past five years are EIB’s loan in December 2016, IFC’s loan in June 2017, and EBRD’s loan in February 2018. At present, we are actively working with about 30 financial institutions worldwide. Most of them are long-standing and reliable partners of the company, namely Amsterdam Trade Bank (the Netherlands), Arab Bank (Switzerland) Ltd., Banque Cantonale Vaudoise (Switzerland), Banque de Commerce et de Placements (Switzerland), BIC-BRED (Suisse) SA (Switzerland), BNP Paribas (France, Great Britain), Credit Agricole (France, Great Britain, Ukraine), Credit Europe Bank (the Netherlands), DEG (Germany), EBRD, EIB, IFC, FMO (the Netherlands), ING Group (the Netherlands, Switzerland, Ukraine), NATIXIS (France), Rabobank International (the Netherlands), Raiffeisen Bank International (Austria, Ukraine), UBS Switzerland AG (Switzerland), Alfa- Bank PJSC (Ukraine), VOSTOK Bank PJSC (Ukraine), West Finance and Credit Bank PJSC (Ukraine), VFS Ukraine Ltd, Kredobank PJSC (Ukraine), OTP Bank JSC (Ukraine), OTP Leasing Ltd. (Ukraine), Oschadbank PJSC (Ukraine), Pivdennyi PJSC (Ukraine), PIRAEUS BANK ICB JSC (Ukraine), PRAVEKS BANK JSC (Ukraine), Scania Credit Ukraine Ltd. (Ukraine), UkrEximBank JSC (Ukraine), and UKRGASBANK JSC (Ukraine).We are often asked why we work with so many banks, rather than just 5-10 ones. The answer was given in 2014 and 2020 when banks faced many difficulties. This quantity of banks is risk diversification. Loans and deposits are never placed in one bank in order to prevent adverse consequences in case it goes bankrupt. According to financial experts, don't put all your eggs in one basket, as there is a great risk to drop the basket and lose everything. It is recommended to put eggs in several baskets to reduce risk to the minimum (this proverb, first recorded in 1710, has largely replaced the much older trust all one's goods to one ship – editor’s note). – According to the information, foreign governments acted as the guarantors of NIBULON’s loans before financial institutions. What activities are mostly funded by bank borrowings?– Our company received investment loans in 2009, 2010, 2012 through the export and credit agencies (ЕКА) (ЕКF, EKN, Atradius, Ex-Im Bank (the USA)). ЕКА is a particular financial provider between a seller and a buyer, providing financing in terms of direct loans, investment, credit guarantees and/or insurance under government guarantees. Developed countries usually support their own producers. For example, if АBN Amro bank provides NIBULON with a loan to purchase equipment from CIMBRIA (Denmark), the EKF export credit agency (Denmark) is a loan guarantor. NIBULON received such a loan through Ex-Im Bank agency (the USA) to purchase SCAFCO silos (the USA) for our grain transshipment terminals. This loan was received in 2012 and repaid in 2017. The European banks’ liquidity is quite high; thus, creditors and investors are ready to invest money, in particular in Ukraine. Frankly speaking, political, economic and financial difficulties in our country have a negative influence on Ukraine’s interbank rating. Unfortunately, these risks remain high for Ukraine. Nevertheless, when NIBULON asks world institutions for loans, they provide them. Due to its sustainability and efficient operations, transparency and openness, as well as its perfect credit history, NIULON is rated as a reliable company. In compliance with the banks’ internal regulations, NIBULON often has a higher rating than Ukraine. Our positive image in the global market works for the benefit of Ukraine. Due to NIBULON’s efforts, the company has proved that it is possible to cooperate with Ukrainians and to achieve success. The Ukrainian market is potentially powerful and perspective.– Lending is an important activity, but it is not the only one in the financing department. In reality, your task is to earn money and invest it efficiently, isn’t it? – Financing activity is a process of planning and a constant flow of funds, control of working assets, production financing and trading activities, calculation, analysis, as well as accurate reporting, etc. Our department ensures financial resources so that the company can develop sustainably. It is a well-organized mechanism when money works efficiently to earn profit within legislation. Our main activities are trading (about 90% of the total turnover), agricultural commodity production, logistics, as well as storage, treatment and transshipment of grain.– Let us start with trading which, probably, ensures NIBULON’s main profit. Does it cover the purchase of agricultural commodities across Ukraine and commodity sales on the global markets? – The company’s trading activity consists of operations on the domestic market, namely the purchase of agricultural commodities, and commodity sales on the international and domestic markets where the company has been taking leadership positions for many years. NIBULON created a unique modern well-developed elevator infrastructure, which has brought it closer to agrarians, its own fleet to ensure an efficient logistics chain and high rates of continuous grain shipment for export. At present NIBULON’s facilities operate in 13 regions across the country. The company’s total grain storage capacity is 2.25 million tons, and its fleet comprises 85 vessels used for various operations. Since it commenced operations, NIBULON is constantly and persistently improving its activities. By working with NIBULON, a Ukrainian agricultural producer can sell agricultural commodities at a competitive market price, receive quick payment and high-quality services to store and process grain.We purchase the main types of agricultural commodities, such as wheat, corn, rapeseed, sorghum, barley, soybean, etc. from more than 4 thousand suppliers, 85% of which are agricultural commodity producers. It isvery complicated and responsible work which requires a well-coordinated and consistent operation of all services and departments at NIBULON. Thus, we have thousands of specialists. The company has 27 transshipment terminals and facilities for grain and oilseeds receipt, storage and shipment, in particular 12 river facilities and the main transshipment terminal for grain and oilseeds shipment in Mykolaiv. All the facilities are equipped with the most modern equipment from the world’s leading manufacturers and operate efficiently, thereby enabling the company to provide the entire range of elevator services.NIBULON’s scheme to purchase grain is open and transparent. The current purchase prices are posted on the company’s corporate website (nibulon.com). The company’s certified high-tech laboratories, equipped with up-to-date equipment and high-precision measurement devices to carry out physical and chemical as well as molecular and genetic tests of grain, leguminous and oilseeds, guarantee the quality of grain.Concerning capabilities, we can deliver any batch of grain, within any period of time, to any country on FOB and CIF basis (to the destination point).The company constantly boosts the volumes of domestic grain exports, increasing competitiveness of Ukrainian grain and opening new successful markets for both itself and Ukraine. Last marketing year our company exported more than 4.9 million tons of agricultural commodities. The last three years have been the most successful. We keep moving forward, setting new goals. At present the company’s shipment volumes in the outer roads are up to 6 million tons.This resulted in implementing NIBULON’s large-scale investment program, in particular the projects of USD 260 million implemented over recent years. The company started the construction of the Holoprystanska branch transshipment terminal (Kherson region) along the Dnipro on July 1, 2016. NIBULON then built Khortytsia branch (Zaporizhzhia region) along the Dnipro, and in 2019 – Ternivska branch (Zaporizhzhia region). In 2020, NIBULON built its first facility in Dnipropetrovsk region – Zelenodolska branch. The company also constructed the Svativska branch elevator complex in Luhansk region. The company conducted the reconstruction of NIBULON shipbuilding and repair yard. It modernized and increased the capacity of the transshipment terminal in Mykolaiv, Kremenchutska branch (Poltava region), Kozatska branch (Kherson region), Voznesenska branch (Mykolaiv region), and Holoprystanska branch (Kherson region).We also built our fleet actively. In particular, the company built the Mykolaivets high-capacity SDS-15 dredger, as well as the NIBULON MAX 140-m self-propelled river-sea floating vessel, which is the longest one built since Ukraine’s independence and the largest order built at NIBULON shipbuilding and repair yard. It is equipped with two electrohydraulic grab cranes (Liebherr-MCCTEC Rostock GmbH) with a maximum lifting capacity of 45 tons each. The cranes’ productivity is 18,000 tons per day. The vessel has two cargo holds with the capacity of 13,400 cubic meters. During its first year of operation, the vessel has achieved high results in the agricultural commodity shipment for export – 2.5 million tons. Since it commenced operation, NIBULON has invested more than USD 2.3 billion in Ukraine’s economy. We invest not only in Ukraine’s economy, but also in Ukraine’s positive image in the global market. – You have mentioned that you offer a competitive price for agrarians. What are your conditions to cooperate with agrarians? Do you sign forward contracts? This year’s non-fulfillment of forward contracts by agrarians impacts negatively on grain traders in Ukraine.– We offer agrarians a wide range of services with maximally profitable conditions. We mostly sign a frame contract with a supplier (an agricultural commodity producer or intermediary) at the beginning of a season; it is valid for a year. Under the terms of this contract, a supplier does not need to provide a full set of documents (register, financial documents, etc.) every time it delivers grain to NIBULON. Thus, this supplier can deliver grain, specified in the purchase list, to any transshipment terminal or elevator complex and get the price specified on our website, i.e. a supplier can deliver corn to the Pereiaslavska transshipment terminal, wheat to Svativska branch or rapeseed to the transshipment terminal in Mykolaiv. The company guarantees payment within three bank days or even earlier. The price depends on the quality of grain delivered. This frame contract is very important for us, as we conduct work, which will be done by the tax service, to check a contractor's reliability before starting to work with it. We can guarantee that our stakeholders do open and transparent businesses, like NIBULON. We also sign forward contracts but only in a quite restricted manner. It concerns mostly assistance to farmers in cultivating grain, which they require. As I have already mentioned, about 85% of our suppliers are agricultural commodity producers, from high-capacity farms to small farmers. Everyone becomes a participant of the grain export operations. NIBULON is popular with agricultural commodity producers, as it offers a number of advantages, such as competitive market prices, time saving, the reduction of costs paid for transportation to port cities, and the opportunity to invest money in developing their businesses, as well as many others. By redirecting logistics to river, the traffic load on highways is reduced; the logistics in the region and environmental conditions are improved, as cargoes are transported to the Mykolaiv transshipment terminal or directly to the outer roads by water transport. By the way, we were one of the first to implement automation of the company by using a comprehensive information management system. We also created an efficient system to control and analyze the operations of the company’s suppliers. We created a transparent system to store information. All the documents, which are stored on various stations of the enterprise system, are connected with the objects of a recording program. For example, contracts, specifications, commercial proposals and other files are connected with a contractor reference book, thereby enabling us to quickly receive an access to the required documents. The company also implemented the principle of anonimity at the transshipment terminal when measuring grain samples. When receiving grain samples, each crop is coded. Thus, the laboratory specialists do not know a product supplier. Consequently, they cannot influence the results.Honest, open and transparent cooperation with every partner is a guarantee of the company’s success. – What is next in the list of NIBULON’s main activities? – Agricultural commodity production and processing.At present, NIBULON has 20 production branches cultivating 80 thousand ha of agricultural land in 8 regions of Ukraine. The quality of agricultural commodities meets the strictest requirements of both Ukrainian and foreign consumers. Please note that the high-quality food grain comprises 90% of the total gross amount of grain.Our facilities efficiently conduct agricultural commodity production, use modern highly productive energy-saving agricultural machinery, use the best seeds and plant protection means of both domestic and foreign producers, implement modern and environmentally friendly technologies to ensure a high level of production. Considering that our branches are located in various climatic areas across the country, we are engaged in the entire process, from sowing to harvesting. Grain production allows NIBULON to make early deliveries to its transshipment terminals and elevator complexes. Consequently, the company has a certain amount of its own grain at the beginning of harvesting, thereby ensuring the fulfillment of the first contracts in the new marketing year. In addition to crop growing, the animal farming is also developed at NIBULON with 400 working places created and preserved. The company produces its own sausage and meat products, as well as milk. In the 2019/20 marketing year, an index of production profitability continued to grow. – What can you tell us about NIBULON’s logistics chain? – NIBULON renders services directly to agricultural commodity producers; thus, the elevator complexes and transshipment terminals are brought closer to farmers. Agricultural commodity producers do not need to enter the port cities, overcoming hundreds of kilometers by Ukrainian highways, in order to sell their grain. They sell grain in their region, saving funds and time considerably, thereby reducing traffic load on Ukrainian highways. Due to a well-developed network of river facilities, the company transports grain cargoes to the sea transshipment terminal in Mykolaiv or directly to the outer roads by water transport. The company has done a huge amount of work to achieve this. In 2009, NIBULON initiated and implemented a large-scale investment project to revive the Dnipro and the Southern Buh as navigable transport arteries, covering the development of a network of the transshipment terminals and elevator complexes, the revival of shipbuilding, and the creation of its own fleet. Today, our company has achieved success and is world-renowned for its most modern inland logistics. NIBULON efficiently redirects its cargo flows to river transport, annually increasing the volumes of cargoes transported by rivers, thereby proving the correctness of its decisions and activities. In 2020, the company transported 4.14 million tons of cargoes, demonstrating the best result in its history. Since it commenced operation, our shipping company has transported about 22 million tons of various cargoes by domestic inland waterways, thereby removing the equivalent of more than 900 thousand trucks from Ukrainian highways. The state saved almost UAH 22 billion directed to road repairs, according to the Ministry of Infrastructure’s calculations. This helps to annually reduce emissions into the atmosphere, to preserve the environment and to improve people’s health. According to our calculations, every Mykolaiv citizen inhales about 4 kg less of pollutants caused by road transport per year. Due to NIBULON’s fleet operation, these trucks do not enter the local roads. In compliance with our calculations, the fuel saved over a 30-year perriod by transporting cargoes by river rather than by road will enable us to cover the construction cost of a new river transshipment terminal on a turnkey basis.According to the world’s experience, river transportation is the most efficient, environmentally friendly and least energy-consuming. Every year we increase the range of types of cargoes transported by water, such as building materials, large-sized cargoes, watermelons and melons, as well as others. Speaking about river transportation, we cannot but recollect our social project started since 2017, namely passenger transportation by hydrofoils. This project is very popular with Ukrainians. Since 2017, about 100 thousand persons have used the company's services. In addition to water transportation, rail transportation enters the company’s logistics chain. We were one of the first in Ukraine to start rail dispatch from our terminals and continue to do this. Thus, our cooperation with Ukrzaliznytsia is efficient. In 2019, the company purchased hopper cars to transport grain from our facilities, thereby reducing railcar turnover to 3-4 days in both directions (the average turnover of the country is 10-12 days). According to Oleksiy Vadaturskyy, NIBULON’s General Director, the railcars must not be just considered as storage, but rather as an efficient vehicle to deliver goods.The company is also engaged in transporting goods by trucks. It is mostly grain transportation from agricultural commodity producers to elevator complexes and from elevator complexes to river transshipment terminals. NIBULON created Ukraine’s most modern truck fleet with maximally efficient and environmentally friendly trucks produced by the world’s leading manufacturers, such as Mercedes, Scania, Volvo. All the trucks have acceptable dimensions and meet the EURO-3 and EURO-5 standards.– Storing grain is a complicated activity requiring responsibility towards its future consumer and buyer. How does NIBULON ensure it? – Our company has created a unique well-developed infrastructure of transshipment terminals and complexes for grain and oilseeds receipt, storage and shipment, thereby enabling the company to create comfortable working conditions for agricultural commodity producers.The company’s facilities are high-tech and fully automated. They are equipped with computerized and high precision weighing scales ensuring the accurate weight of grain to be received and shipped, high-capacity transport, and other equipment. All the facilities, built in 2009, are equipped with a quick grain drying technology by using energy- saving technologies. NIBULON’s certified production and technological laboratories, equipped with the equipment from the world’s top manufacturers, control the quality and safety of grain received and shipped. Thus, the company’s services to store grain and bring it to basic quality standards, as well as product exports, are guaranteed to comply with international standards.NIBULON’s network to control grain origin and transportation from a field to a vessel, as well as to a destination point meets the strictest international requirements and quality standards. In order to preserve people’s health and the environment, NIBULON’s facilities comply with European requirements. The facilities are equipped with technological equipment to protect air, water environment and soil, as well as dust removal systems that control the compliance with environmental standards at the points of loading and unloading.Thus, we are increasing the number of partners, expanding the volumes of agricultural commodities received for storage, as well as our export geography. The most important thing is that agricultural commodity producers trust NIBULON in all the regions where the company’s facilities operate.The company’s makes Ukraine a supplier of high-quality grain in the world. Finance and money flows are one of the most important components in every company. Our success is a combination of effective teamwork, of having ability to manage these compound processes by implementing innovations and trends on financial markets, and by following changes in the legislation and on the world stage. We make efforts to support and increase the company’s success, to keep its sustainable and to maintain a positive image worldwide. NIBULON operates to develop Ukraine and to improve the living standards of every Ukrainian.http://www.agroprofi.com.ua/statti/1945-olha-babanina-my-investuyemo-ne-lyshe-v-ekonomiku-ukrayiny-a-y-u-pozytyvnyy-imidzh-nashoyi-krayiny-na-hlobalnomu-rynku