Kernel increases estimate of capex for new oil extraction plant in western Ukraine from $180 mln to $279 mln
Agroholding Kernel has made changes to the initial design of an oil extraction plant under construction in western Ukraine with an estimated processing capacity of up to 1 million tonnes of oilseeds per year, increasing the growth in the estimate of capital construction costs by 55% - to $279 million due to the expansion of storage and logistics capacities and the rise in the cost of construction work and materials.
"The additional costs are the result of changes made to the initial design of the plant, related to the expansion of capacities for receiving and storing sunflower seeds, improving the capabilities of road and rail logistics, along with reflecting global trends in the rise in the cost of construction materials and labor," the group of companies said in a message posted on the Warsaw Stock Exchange late Wednesday night.
The agricultural holding clarified that after commissioning, scheduled for the spring of 2022, the capacity of the oil extraction plant for processing sunflower seeds will amount to 1 million tonnes per year.
According to Kernel, the project for the plant under construction includes the construction of a thermal power plant producing renewable electricity from biomass with an estimated capacity of 22.5 MW.
As reported, in October 2018, the company announced plans to build a plant for processing oilseeds in Starostiantynivsky district of Khmelnytsky region in early 2021. The design capacity of the processing plant was planned at the level of 1 million tonnes of oilseeds per year, the volume of storage facilities is 100,000 tonnes. At that time, commissioning was scheduled for early 2021.
Kernel is a large producer and exporter of sunflower oil, operating in the production, export and domestic sales of sunflower oil, crop production, export of grain crops, provision of services for storage and transshipment of grain at elevators and port terminals. The largest co-owner of Kernel through Namsen Ltd is Andriy Verevsky with a 39.97% share. Cascade Investment Fund (the Cayman Islands), the beneficiary of which is ex-MP Vitaliy Khomutynnik, owns 6.59% of Kernel's shares.