Project | The french fries era
Today, the production of French fries in Ukraine does not meet the real demand for it. The project, which is part of the Skadovsk Industrial Park, will solve this problem through the construction of a new french fries processing plant. This plant will be supplied with Ukrainian raw materials by the “Adelaidа” farm.
“Adelaida” Farm
“Adelaida” Farm grows cereals and oilseeds. However, its main specialization is potatoes. The total farm’s land area dedicated for growing potatoes is 300 hectares in the Kherson region and 500 hectares in the Zhytomyr region. Also, the farm possesses storage facilities that are able to store 3,000 tons of commodities in the Kherson region and 8,000 tons in the Zhytomyr region.
Moreover, the company is one of the largest potatoes producers in Ukraine and is one of the budget-forming enterprises in the Chulakivka territorial community. There are 117 permanent employees working on the farm.
The company has a positive experience of increasing the area of irrigated land thanks to the USAID AGRO program. After the having implemented irrigation on 200 hectares thanks to grant support, the company installed an irrigation system on 1,100 hectares of land at its own expense. Today, 1452 hectares of land are equipped with an irrigation system.
In addition, the farm has experience working with large companies: Fozzy Group, ATB, Alliance Market, and with processors PepsiCo, IPG and Chips Club.
Factory project
The consumption of french fries in Ukraine in 2019 amounted to 22 thousand tons. Its consumption is projected to double by 2025 and result in 50 thousand tons. Furthermore, the consumption of french fries in the world increase annually by 10-12%, and in Ukraine by 15-20%. However, there is only one plant in Ukraine in Chernyavshchyna that supplies french fries to Ukrainian markets.
For this reason, to meet the demand for french fries in Ukraine, the project involves the construction of a plant with warehouses for its processing. This allows to process 25 thousand tons of raw materials per year.
The construction of the plant is planned in Holoprystan district of Kherson region. There are already available a proper land for the project owned by the “Adelaida” farm. Also, it is already connected to electricity and water supply.
In addition, “Adelaida” farm will provide the plant with raw materials that will be grown on 600 hectares of land. The farm will be able to offer appropriate varieties of potatoes for processing it into french fries.
The project consists of three stages, which will be implemented over 3 years:
Stage 1. Construction of the of storage for 10 thousand tons during the 1st year.
Stage 2. Construction of the plant, installation of equipment within 2 years.
Stage 3. Construction of the of storage for additional 10 thousand tons during the third year.
The construction costs are $ 13 million. It includes the purchase of equipment worth $ 3 million, the construction of a 20,000-ton storage facility worth $ 7 million, the construction of the plant and its infrastructure, the cost of which is $ 3 million. The project will be financed at the own expense of “Adelaida” farm (20%) and with investment funds (80%). At the same time, the profitability of the project is 18-22%, and its payback period is 7 years from the beginning of construction.
As a result of the project implementation, the volumes of Ukrainian potato processing will increase and domestic production of french fries will be established. It will also create 90 new jobs and increase tax revenues to local and state budgets.
In addition, the project will create conditions for the irrigation industry development in the south of Ukraine and will help improve food security in the domestic market.
The project is implemented within the framework of Skadovsk Industrial Park, the first in Ukraine with a runway, which creates favorable conditions for investment and development of the processing industry of the South.