The agricultural sector in Ukraine has been the main driver of economic recovery since 2008, but still steps need to be taken to improve the efficiency of Ukrainian farm operations, thereby laying the foundation for securing raw materials and efficient logistics. In recent years, several companies have been working to improve harvest productivity and reduce costs as well as integrate with downstream processing activities. In particular, the group of companies Agrofusion receives a grant of FINTECC in the amount of 700 thousand USD in order to be able to save 2.1 million cubic meters of water annually, 65 734 GJ of energy and reduce CO2 emissions by 3775 tons.
The project of Agrofusion relates to the development of sustainable farming practises, which may be replicated by others, and the development of organic farming (Agrofusion grows organic tomatoes from 2017), as well as the promotion of resource efficiency by using world BAT compliant technologies in farming and processing. By providing financing the Bank will help the company to have the plant comparable to the best performing plants in the EU and to continue its strategy of being the leading tomato paste producer in Ukraine in terms of quality, energy, operational and cost efficiency.
Agrofusion Group focuses on two areas of potential resource efficiency improvement. First, the company intends to purchase modern agricultural machinery that consumes less fuel.
Secondly, it is planned to establish a long-term system of deep drip irrigation covering 2,500 hectares. The polyethylene lining of this system will serve for several seasons, but not for one or two, as usual. Therefore, the cost of annual plastic recycling will be reduced. Another advantage of the system is that water enters directly into the root zone, and when only the target part of the soil is moistened, there is a place for storing rain water. It reduces the cost of irrigation. Moreover, because the hosing is 30-45 cm below ground, the soil surface remains dry and there is no water loss from evaporation. The system can also be used to inject fertilisers into the soil in a more efficient manner. It is estimated that the new sub-surface irrigation system will reduce irrigation water use by 15-20% compared to the existing top surface system.
FINTECC grant funding stimulated the company to cover 2,500 hectares, instead of 80 hectares, with the new highly efficient and environment-friendly irrigation system. This is particularly important for the Mykolayiv and Kherson regions, where water is scarce. Scientific data shows that the Ukrainian climate has already started changing. Temperature, precipitation and other meteorological parameters differ from the long-term climate norm. Air temperature will continue to increase and the amount of precipitation will decrease throughout the year, resulting in a shift of climatic seasons and changes in local water resources flows. The agricultural sector experiences strong adverse effects of these processes and is the most vulnerable to the climate change. Agrofusion Group has already started the introduction of climate change adaptation measures from own financial sources even before receiving a grant, namely, partial reconstruction of existing abundant irrigation infrastructure, rehabilitation of drainage wells and pumping stations. The introduction of the new water efficient irrigation system will help the company to continue combating climate change.
Agrofusion Group, operating in Mykolayiv and Kherson regions in Ukraine, is the only vertically-integrated tomato grower and paste producer in Ukraine, which supplies exclusively for the B2B market, providing high quality tomato paste to both domestic and foreign leading FMCG producers of juice and sauce/ketchup in 36 countries. Agrofusion exports more than 50% of its production.