As a pioneer in the fat and oils industry, Victor Ponomarchuk, Shareholder of ViOil, has helped build the industry from scratch in Ukraine. ViOil was the first company in the country to start production of rapeseed oil and continues to be a leader in the field. The Company is also one of the largest producers of sunflower oil, offering a variety of oils including the increasingly popular high oleic sunflower seed oil and soyabean oil. Mr. Ponomarchuk notes that while reforms were slow in Ukraine’s first decades, in recent years, and especially with the current government, the critical reforms needed to unlock Ukraine’s potential are taking place. ViOil is interested in partnering with investors as the company continues to grow, launch new products and develop new markets
ViOil was created in post-Soviet Ukraine in the 1990’s and was the first company in the country to produce rapeseed oil. Can you tell us about the early days of how the company was formed and its pioneering work in the sector?
I was among the first entrepreneurs trading in vegetable oil right after the Soviet Union collapsed and opening your own business became legal. We began growing by buying out old factories that were outdated and out of use and rehabilitating them to launch our own processing and production. All of them had fallen into bankruptcy. A lot of this was happening in the early years after independence. Nowadays one of our biggest factories and facilities for sunflower processing is on one of those early plots we purchased. The fat and oil industry in Ukraine was created from scratch and we’re proud of our part in building it from nothing to a modern industry. Today, Ukrainian food oils are exported to over 100 countries worldwide.
Agribusiness is one of Ukraine’s rapidly growing sectors, with 12.2% growth last year. In your view, what fundamentals of the nation’s agricultural sector have contributed to this success?
It has taken time to shift from the old Soviet system and to introduce new ways of thinking and of doing work. The land was vastly underutilized in the early years of independence, and now that new technologies have been introduced, the growth became exponential. In fact, we were the first to introduce high quality rapeseeds, imported from France, to the market. Back in the 1990’s, Ukraine was only producing 100 thousand tons of rapeseed per year. Now we produce 3 million tons of rapeseeds per year. This is an increase of thirty times over.
Last year, Kernel, Ukraine’s largest fat and oil company, bought a 5.8% interest in ViOil. What did this acquisition mean for the company?
We consider the 5.8% acquisition by Kernel as a partnership that allows us to share experience and information between the two companies. We are working on a common bio-energy project at the moment and are in conversations with European banks about funding.
In 2018, ViOil increased its high-oleic sunflower seed oil by 2.5x in response to a global increase in demand for high-oleic sunflower seed oil as consumers focus on healthier food oil sources. What other areas of your business and product categories do you see opportunities to expand in?
We are one of the leading producers of high oleic sunflower seed oil and we more than doubled our production again this year. It is a very promising product given global trends towards wellness and healthy eating. We are exporting our high oleic sunflower seed oil via direct shipment to many countries across the world. We are crushing soybeans as well as linseed, and are currently beginning production of a new unique type of rapeseed oil that is receiving demand from different buyers already. We experiment and constantly bring new products on the market to stay on tack and be aware of the demand of our buyers.
Why should US investors now take notice of investment opportunities in Ukraine’s agribusiness sector?
Ukraine is a country with untapped opportunities. Our growth has been slowed by political circumstances, but with the reforms that have been undertaken so far and the current government’s plans, Ukraine can be unlocked. We’re interested in cooperation with serious potential investors. From a business point of view, Ukraine and this sector have a lot to offer.