BZK Grain Alliance AB
Ukrainian Agriculture
BZK Grain Alliance AB is a modern agricultural producer with fields in the central parts of Ukraine. The company is founded based on the analysis that the global population is growing rapidly and is estimated to rise from current 7.8 bln people to over 9 bln in 2050. At the same time the arable area is limited, thus each available hectare of agricultural land has to feed more and more people.
Company Introduction
Grain Alliance is one of the leading agriculture companies in Ukraine. The company cultivates around 60 000 hectares of arable land in central Ukraine. The foundation of BZK Grain Alliance AB was laid in 1998. At that time, the company was primarly a supplier of agricultural services but during the summer of 1998, 2 000 hectares was seeded. In May 2008, the founder of the company, the American entrepreneur Alex Oronov, together with a group of Swedish investors led by the CA Group, spearheaded and established a new company structure – Grain Alliance. The core of Grain Alliance has over 20 years of successful large scale farming, achieving yields well above the Ukrainian average. In May 2008 CA and some other minor shareholders entered into the company via a new share issue. The new constellation bought out one of the two existing partners and under CA’s active ownership the company was restructured and enhanced, thus creating a solid platform for further growth, expansion and development. Since then the company land bank has grown in average 5 % per year and the profitability has increased substantially.
Because of the Grain Alliance´s strong financial performance, the company has been able to cultivate a more complex set of grains, such as corn, soybean and sunflower, which require more working capital but renders higher margins. The investments into storage have enabled the company to store and time sales better.
Claesson & Anderzén’s ownership in BZK Grain Alliance AB is 99.9%.
Business Concept
To generate sustainable returns by increasing productivity and efficiency in the Ukrainian agriculture by implementing best agricultural practices, modern equipment and strict financial control. Profitability is more important than size of the cultivated area and our focus is on efficiency and returns.
Organization
The head quarter is situated in Stockholm, but all operational activity is located to Ukraine. The Ukrainian head quarter is in the town of Berezan approximately 80 km from Kiev. The management team of the company is located in Ukraine in order to be in close contact with all operations. The goal is to have as transparent and simple organizational structure as possible, thus ensuring accountability, transparency, fairness and simplicity with the goal of maximinzing shareholder value while simultaneously adding value for all involved parties.
Operations and locations
Grain Alliance arable lands is located in the center of the Ukrainian black earth belt. The company operates in four districts in Ukraine: Kyiv, Poltava, Cherkasy and Chernihiv districts. The agricultural operations are divided into three regions (clusters), where each region cultivates between 17 000 and 23 000 hectares. Each of the regions is fully equipped with modern agricultural equipment and the short distances between the regions enable the efficient utilization of machinery. In order to allow efficient handling and storage of produced grain, the company has five drying facilities, four of which have a direct rail connection.