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UPDATE 2-Louis Dreyfus agrees JV to develop Ukraine commods terminal
10/17/2013 Email this story  |  Printable Version

* Terminal set to be completed in August 2014

* Project set to increase control on export flows

* Glencore, Bunge have invested in Black Sea terminals

By Emma Farge and Tom Miles

GENEVA, Oct 17 (Reuters) - Trading giant Louis Dreyfus Commodities said on Thursday it has entered a joint venture agreement with Brooklyn Kiev LLC to develop and manage a multi-commodity terminal in Odessa as it expands in one of the world's top grain exporters.

While Louis Dreyfus is already active in shipping grains from the Black Sea - a region which accounts for about a quarter of global wheat volumes - the terminal will help it to compete with rivals such as Bunge which already has an export facility there.

Glencore has also sought to increase its presence in the Black Sea region and last year bought a 50 percent stake in a Russian export terminal alongside Ukrainian agricultural producer Kernel.

Louis Dreyfus said in a statement it plans to ship its first grain cargo through the terminal in the coming months. Once completed, in around August 2014, the terminal will have total grain storage capacity of about 240,000 tonnes.

The facility will export corn, wheat and barley as well as oilseeds and exports are likely to go to Europe, Africa and the Middle East.

"The substantial growth in Ukrainian grain production and exports, which is expected to continue in the coming years, driven by higher yields, increasing corn crops and more efficient farming operations, requires efficient export channels," said Jean-Marc Foucher, chief executive of Louis Dreyfus Commodities for Europe and the Black Sea.

The agreement is one of the first major deals under new CEO Ciro Echesortu, who took over from long-serving leader Serge Schoen in June. No value was given for the transaction, which is subject to certain conditions and regulatory approvals.

Brooklyn Kiev LLC is a leading shipping services company based at Odessa on the Black Sea.

Louis Dreyfus, a 160-year old company with French roots and trading operations in Switzerland, has sought in recent years to boost its portfolio of strategic assets to complement its trading activities.

In a bond prospectus seen by Reuters in July, Louis Dreyfus said that it had entered an agreement to build a port terminal for agricultural commodities in the Black Sea region, without elaborating or giving details.

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