DuPont Co. (DD:US)’s seed deliveries are being harmed by unrest in Ukraine, the world’s third-largest corn exporter, while agriculture companies such as Cargill Inc. are monitoring the intensifying anti-government insurgency.
Violent demonstrations are disrupting deliveries of seeds sold to Ukrainian and Russian farmers from DuPont’s new $40 million seed plant in eastern Ukraine, Paul Schickler, president of the Wilmington, Delaware-based company’s seed unit, said in an interview today.
Pro-European Union protesters yesterday raided government headquarters in Poltava, a regional capital 10 miles (16 kilometers) south of Stasi, where the plant was opened last year, according to a report from the Interfax-Ukraine news service. Violence is escalating in the country of 45 million as the Russian-backed President Viktor Yanukovych conducts an operation to end the three-month-old protests.
The delay to seed deliveries may be resolved by the end of the planting season without any effect on revenue, Schickler said in the interview at the U.S. Department of Agriculture’s annual outlook forum in Arlington, Virginia.
“We’ve got probably three months” to complete deliveries, he said. A bigger concern is whether credit will still be available, he said.
“What will the credit system be like?” Schickler said. “What will economic conditions be like? Is there liquidity in the agricultural system? If the economic conditions change, that’s more of a direct impact on the business.”
DuPont’s seed plant in Stasi employs about 70 people to produce Pioneer corn and sunflower hybrids. Ukraine is projected to be the world’s third-biggest corn exporter this year, after the U.S. and Brazil.
Monsanto Co. has gained market share in Ukraine and is adding production capacity to meet the region’s rising corn seed demand, Executive Vice President Kerry Preete said in September. Monsanto is monitoring the current situation and working to continue serving its customers, Sara E. Miller, a spokeswoman, said in an e-mail today.
Cargill’s grain-export operations haven’t been affected, and its Kiev office remains open, Corinne Holtshausen, a spokeswoman, said yesterday. The Minneapolis-based crop trader and processor has adapted shifts and encouraged employees in Ukraine to work from home where appropriate to ensure safety, she said.
Cargill, the largest closely held U.S. company, has been in Ukraine for more than 20 years and employs 600 workers, according to its website. In January it bought a 5 percent stake in Kiev-based Ukrlandfarming Plc, Ukraine’s biggest agricultural producer.
Deere & Co., the largest maker of agricultural equipment, has a marketing office in Kiev. Employees are allowed to work from home and travel is suspended as the company monitors the situation, Ken Golden, a spokesman for Moline, Illinois-based Deere said today by e-mail.
Dow Chemical Co. (DOW:US), the world’s largest producer of chlorine and maker of agricultural products, has a “small commercial presence” in Ukraine and all its employees are safe, the company said in an e-mail.
Interest in the country from grain traders has increased with the rise in corn exports. Ukraine will ship 18.5 million metric tons of corn in the 2013-2014 season, more than triple the amount three years ago, according to the USDA.
Bunge Ltd., which purchased a port terminal in the country in 2011, didn’t respond to voicemails and e-mails requesting comment on their Ukrainian operations.
Archer-Daniels-Midland Co. (ADM:US), the world’s largest corn processor, has operations in Ukraine including export facilities run by its Alfred C. Toepfer International subsidiary, according to a securities filing.
Glencore Xstrata Plc, the Swiss commodity producer and trader, has storage facilities and crushing and farming assets in the country, according to a presentation on its website.
ADM and Glencore declined to comment on their Ukraine operations today.
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