United Grain Increases Expansion Plan for Black Sea Port

United Grain Co. aims to expand one of Russia’s key grain terminals on the Black Sea more than previously planned to compete against the country’s shallow ports.

Starting the expansion last year, state-controlled United Grain sought to boost the capacity of the deep-water Novorossiysk Kombinat Khleboproduktov terminal to handle 4.7 million metric tons of grain a year, from 3.5 million tons, according to spokeswoman Yekaterina Donskikh. The company sent a plan to the government for approval last month with a target of 5.6 million tons by 2017, she said by phone from Moscow.

Grain traders can cut shipping costs by loading large freight ships at deep-water ports, rather than smaller vessels at shallow-water ports, Donskikh said. United Grain, which controls the Kombinat Khleboproduktov terminal, also plans to build more silos there to bring storage capacity to about 243,000 tons in 2017, up from 143,000 tons.

The company intends to spend a total of 4 billion rubles ($118 million) on the terminal upgrade. It’s unclear when the government may approve the project, which is part of a broader investment program, Donskikh said.

United Grain also wants to join forces with OAO Novorossiysk Commercial Sea Port to build a vegetable-oil terminal, she said. The companies, which haven’t yet agreed on the terminal’s ownership, plan to begin construction mid-next year and complete the 1.3-billion-ruble project by the end of 2016, she said.

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