|SUMMARY MANAGEMENT PRODUCTION LOCATION MARKET TECHNOLOGY FINANCE 2.PAGER Why SMB|
The location is Poltava Oblast, Ukraine, where the collective farms have arable land until 10,000 Ha. The ground is of high quality (84- 96 soil points), with a very deep humus layer of about 150-200 cm (for comparison, the Swiss average is about 40 cm). Therefore, there is very good water balance. Irrigation is not necessary for the cultivation of planned staple crops. When this is required in the future (e.g. for growing special crops such as tomatoes, onions, etc.), this will be relatively easy to create. The cultivation of such crops is special but can be planned accordingly.
Each location we have explored and selected has good connections to transport infrastructure. With these locations we have calculated approx. 10 Km to Dykanka (main traffic artery), 35 Km to Poltava (silo storage and rail connections), 160 km from the Dnieper River, Port Kremenchuk (shipping to 2500 To across the Danube River to Germany), 400 Km to the Black Sea (Port of Odessa).
Due to the communist past of Ukraine and the redistribution of the then annexed land, all agricultural land is now divided into several hundred individual parcels, each of which includes local owners. Each “kolkhoz” is in possession of this leasehold and is responsible for managing it. Many owners are workers on the same collective farms. The collective farm is the central point of the village. When a “kolkhoz” is going well, then so is the rest of the village. The owner and director of the collective farm is seen as the mayor of that specific area. These enterprises around the Rajon Dykanka area are all surrounded by flat land, divided by reasonably good roads.
At the locations we have chosen, the necessary collective farm buildings for production machinery, processing, storage, administration, and for accommodation of personnel are already in place and do not need to be rebuilt. Experience indicates that per 1 hectare of agricultural land, on average 1 m2 of building is needed. With the volume of land that we have in mind, this corresponds to a total of approximately 10,000 m2 building area on 10,000 hectares. This equates to a holistic investment of approx. 500 Euros per hectare, amounting to a total of 5 million Euro. Apart from a large warehouse, no greater investment is required. Realistically such a building could be written off in less than 20 years.