Notables, including POSCO International President Kim Young-sang, Mayor of Nikolaev Alexander Senkevich, Governor of the Nikolaev Alexander Stadnik and Orexim Group Chairman Yuri Budnyk POSCO, attend a ceremony to dedicate POSCO International’s overseas grain export terminal in Ukraine on Sept. 25. (Photo:POSCO)

Under the stewardship of Chairman Choi Jeong-woo, POSCO is advancing a strategy to foster food grain projects not only to contribute to securing national food security, but also to nurture it as a new overseas business.

Chairman Choi disclosed his plan to that effect as he took office at an inauguration ceremony in July 2018. The plan on national food security was inclusive among 100 reform tasks POSCO has now implemented. It has paid off in Ukraine.

POSCO International became the first Korean company to have an overseas grain export terminal, built by the company in Ukraine. The trading subsidiary of POSCO has complemented a grain value chain ranging from production to processing and logistics.

POSCO International President Kim Young-sang, Nikolaev Mayor Alexander Senkevich, Governor Alexander Stadnik and Orexim Group Chairman Yuri Budnyk participated in a ceremony to dedicate the grain export terminal on Sept. 25.

The export terminal is located at Nikolaev Port, one of the biggest export ports on the Black Sea. It is capable of delivering 2.5 million tons of grain, including wheat, corn and soybean, annually.

POSCO International has management rights with a 75 percent stake in the terminal. Orexim, with a 25 percent stake, is participating in the grain project. Orexim Group, the largest exporter of sunflower oil in Ukraine, has a terminal for edible oils and fats in the port of Nikolayev.

POSCO International has focused on the so-called “food basket of Ukraine,” which is one of the world’s top five grain exporters, and the port. The Eastern European country saw production of grain such as corn, wheat and soybean, surge from 40 million tons in 2007 to 77 million tons in 2017. Exports jumped from 8.5 million tons to 43 million tons during the period.

In particular, about 90 percent of Ukraine’s grain exports were shipped via the Black Sea, and a majority is exported via the port of Nikolaev, where POSCO International’s grain export terminal is located.

POSCO International plans to ensure the efficient management of all stages, ranging from grain purchase to inspection, storage and loading. The company plans to tap grain import countries in Africa and the Middle East.

POSCO International’s grain export terminal is expected to greatly contribute to Korea’s national grain security. Self-sufficiency of grain, except rice, stands at less than 10 percent.

The nation depends mostly on imports, so it is vulnerable to risks related to climate change and crop failures. POSCO International can reduce grain supply and demand uncertainties by stockpiling grain at lower prices and shipping it when demand is high. The project is being implemented under POSCO Group’s catchphrase “Corporate Citizenship Developing Together.”

POSCO International President Kim said, “POSCO International is expanding a food business value chain with the goal of becoming Korea’s biggest food resources company.”

POSCO International’s project to collaborate with Ukraine will serve as a foothold to build Korea’s food security and implement POSCO’s 100 reform tasks, he added.

POSCO International’s grain shipments jumped from 840,000 tons in 2015 to 4.37 million tons last year. The figure is forecast to surge to 5 million tons this year.