COFCO Terminal: Mykolaiv Sets Foot on the Silk Road

The COFCO corporation (China) has officially commissioned a terminal for transshipment of agricultural products at the Mykolaiv seaport.

The management of the Mykolaiv seaport, business representatives, and journalists are already gathering on a platform in front of the COFCO Agri company’s new and literally shining terminal.

The sun's rays are reflecting off the silver "barrels" of grain silos. Railcars are frozen on tracks near the terminal. Everything is ready for launch.

However, this event, which is important to the seaport and Ukraine as a whole, was preceded by more than two years of construction work. Before then, it was necessary to carefully select a site for the future terminal.

There was insufficient vacant land for construction of the terminal. "When selecting a site for construction, it is important to evaluate the capacity of the port infrastructure,” said Andrii Shkliar, the head of CFTS Consulting. “It is necessary to evaluate the site in terms of approaches to it from the sea (is approach by vessels of the required deadweight possible?) and from land (the capacity of the infrastructure). If we build a high-capacity terminal with a capacity exceeding the capabilities of the surrounding infrastructure, it will not be able to reach its potential and it will idle."

In summer 2014, the Noble Group company hired CFTS Consulting to select a land plot for construction of the grain terminal. A team of experts from CFTS Consulting researched the capacity of the port infrastructure and potential sites for construction of the grain terminal, during which it analyzed the structure of the existing freight traffic by destination and forecast changes to them.

When selecting a site for construction, it is important to evaluate the capacity of the port infrastructure

"We implemented two projects for the Noble Group. Firstly, we helped to select the plot on which to build the terminal, based on the restrictions on the railway infrastructure capacity there. The main question was about the volume of cargo that will be able to reach there without problems in the coming 10 years. Therefore, we analyzed the traffic flows that will go in the direction of Mykolaiv and the capacity of the infrastructure to determine whether it will cope with the increasing flow of goods. Secondly, we advised the Noble Group on optimization of logistics through the use of river transport," Shkliar said.

Experts with CFTS Consulting worked on the project for about one month and the Noble Group gained control of the Danube Shipping and Stevedoring Company, which owned a land plot in the Mykolaiv seaport, in early August.

By the time that the construction of the terminal was completed in March this year, the Chinese grain trading company COFCO had fully acquired the Noble Group.

The terminal is capable of receiving 120 railcars and 120 trucks per day

Investment in this project by the COFCO Agri company (China) amounted to USD 75 million. The capacity of the new grain terminal (more accurately, the capacity of the complex for transshipment of agricultural products) is 2.5 million tons per year and its simultaneous storage capacity is 136,000 tons of grain. The terminal is capable of receiving 120 railcars and 120 trucks per day. It is capable of receiving a total of up to 10,000 tons of grain and shipping up to 20,000 tons per day.

The terminal is equipped with the most modern equipment: installed there are ship-loading machines manufactured by Neuero, silage and transport equipment by AGI, dryers by Stela, separators by Bühler, and automation and power systems by Siemens.

Storage facilities with capacities of up to 130,000 tons will allow accumulation of sufficient quantities of products to load three vessels with maximum capacities of 45 tons.

According to Vasyl Kapatsina, the honorary president of the state-owned Mykolaiv Commercial Seaport and the head of the supervisory board of the Ukrainian Budivelnik company (the general contractor for construction of the terminal), the terminal stands on pile fields, half a meter under which water is already splashing. "If all the piles are arranged in a single line, it will be 70 kilometers long. There are 125 kilometers of power cables here. Up to 500 people worked here every day. We, as the general contractors, hired construction companies from all regions of the country – this project represents the geography of Ukraine,” he said. 

If all the piles are arranged in a single line, it will be 70 kilometers long. There are 125 kilometers of power cables here.

Back to the commissioning ceremony. It was preceded by a video clip from the COFCO corporation, which informed reporters and guests at the ceremony about the enormity of what was happening. The video clip informed that the corporation was established in the same year that the People's Republic of China was born and that it began its emergence together with the country's economy.

Chi Jingtao, the vice president of the COFCO corporation and the general manager of COFCO Trading, said that the terminal in Mykolaiv has increased the transshipment volume of the company’s port complexes from 53 million tons to more than 55 million tons. Chi stressed the importance of the Mykolaiv seaport. "It could soon become one of the key points for transshipment of agricultural goods in Eastern Europe. Furthermore, this port and this terminal may soon become one of the key elements in the implementation of the ‘One Belt, One Way’ project," Chi said.

According to COFCO Agri Ukraine’s General Director Volodymyr Osadchuk, several key components are integrated into a single unit in this project: Chinese investment, Western European equipment, and Ukrainian experts. "More than 150 jobs have already been created here today, and the terminal will become a source of considerable revenue into Ukraine’s budget in the future," he said.

COFCO Agri’s terminal in Ukraine – which is the result of cooperation among investors, consultants, and builders – has been commissioned.

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