Probably each of us while walking in the gardens, parks or forests, noticed walnut trees. But have you ever thought that this particular tree can be a reliable investment in your future?
Representatives of Ukrainian Nut Association are sure of this. That is why, on March 22, 2019 the conference “Springboard for a jump into the walnut business. The main drivers of development and prospects for the walnut business in Ukraine and in the world ” was held. The conference was attended by the Dnipropetrovsk Investment Agency (DIA) specialists.
After analyzing the speeches of the representatives of Ukrainian Nut Association, Export Promotion Office, European Bank for Reconstruction and Development (EBRD) and IMPAK Ltd (owners of 80 hectare nut orchard), we will focus on three main points that should be taken into account while developing own walnut business.
The current state of the nut sector. In the world there are only 7% of the territories suitable for the cultivation of walnuts and Ukrainian lands are included in this percentage. In 2018, the total area of nut orchards in Ukraine was 21.2 thousand hectares.
According to Hennadii Yudin, Vice-President of Ukrainian Nut Association, in 2018 Ukraine exported 41 thousand tons of walnut ($ 117,127.65) and entered the TOP-5 of world exporters of walnut without shell, taking only 19th place by its price.The problem lies in the fact that importers are interested in the certified varietal nut, and not the wild plant, which now prevails in Ukraine.
State and foreign support. In 2018, 48 nut enterprises received compensation from the state. In the framework of the established program, 80% of the cost of seedlings is compensated. Therefore, the amount of compensation for one walnut seedling is 330 UAH, and for one hazelnut seedling 80 UAH.
Two more opportunities to support the development of walnut farming exist thanks to the European Bank for Reconstruction and Development. The first direction provides consulting services, namely to attract consultants for development strategy, marketing, information technology, quality systems, organizational consulting, operational efficiency, engineering solutions, energy, efficiency and financial management. Within this direction, there are initiatives “Export Promotion” and “Women in Business” .
The second direction is financing (from 1 million euros). It provides lending for development; direct and indirect lending, contribution to authorized capital; market, technical and legal project expertise.
Prospects. In Ukraine, there are opportunities for creating new certified nut orchards and forming of nut enterprises associations. Together they will be able to conclude large-scale contracts and export to other countries large quantities of Ukrainian nuts. As Dmytro Hrynenko, head of sales department of IMPAK Ltd., notes: “There is a great demand for certified Ukrainian walnut in the world. However, one company is not able to provide the amount that world importers need“.
Export Promotion Office conducted an analysis of 80 countries, to identify the priority markets for the Ukrainian walnut export. The specialists analyzed three main areas: Europe, the countries of the Middle East and North Africa, and the countries of Asia. As a result, it was revealed that in the first group the leaders are Germany, Italy and the Netherlands; Saudi Arabia, Turkey, United Arab Emirates in the second group and India, Korea and Malaysia in the third group. Thus, these countries can be defined as priority markets for the export of Ukrainian walnut.
It should be noted that now the fashion for a healthy diet appears in the world. In this connection, the nuts consumption will increase, and the demand for the nuts import to the countries will grow. For example, it is projected that by 2022 in India there will be an increase in nuts consumption by 109.5%.
So, we can say that the walnut business has a great future and this business can be your reliable investment in the future.