Market for Construction of Vegetable Storage Facilities in Ukraine in 2023 Revives, 15 Facilities Built

"In the first war year in Ukraine, only one storage facility with a capacity of 1,000 tonnes was built for storing potatoes in Kyiv region on the basis of Brovary Kartoplia LLC. In 2023, we can talk about the revival of the market, since 15 storage facilities with a capacity of 10,000 tonnes were built. Farmers are far from the pre-war level of investment. In 2021, they built potato storage facilities for 51,000 tonnes and these were mainly large projects with a capacity of 10,000 tonnes. Only two market participants invested in projects of 2,000 tonnes each," he said.

According to Maruschak, small-capacity vegetable storage facilities were built by farmers in Chernihiv, Vinnytsia, Ternopil, Lviv, and Cherkasy regions. They are intended mainly for storing onions (85% of built capacities), as well as potatoes (15% of capacities).

It is noteworthy that for the construction, farmers used their own funds earned from selling vegetables at record prices, which were established in the autumn-spring of 2022-23 due to a shortage of these products in the country caused by the loss of the main vegetable-growing regions – Kherson and Zaporizhia regions, he said.

"Farmers will definitely not be able to independently increase the potential lost by the country. After all, in Kakhovka alone there were vegetable storage facilities with a capacity of about 150,000 tonnes. To restore them, more than UAH 3-4 billion will be required. In addition, when restoring industrial vegetable growing, it is advisable to take into account the "mistakes of the past" and "avoid concentration of storage of vegetables in one region. Their storage should be dispersed across all regions, each of which should cover at least 50% of its own needs," the expert added.

Maruschak recalled that the construction of a potato storage chamber with a capacity of 1,000 tonnes costs the farmer UAH 10 million. Optimal for storing vegetables is a vegetable storage facility with a capacity of 4,000-5,000 tonnes, and a potato storage facility with a capacity of 2,000-3,000 tonnes. They are equipped with a sorting and packaging line, which, depending on the type and productivity, costs from UAH 4 to 20 million.

"Without the help of the state or regional programs aimed at developing industrial vegetable growing, Ukraine will not be able to restore the industry, which primarily meets the needs of the domestic market," the expert said.

He added that targeted regional assistance is needed by farmers in Cherkasy and Dnipropetrovsk regions, who have the opportunity to provide their fields with the irrigation necessary for growing vegetables. If we take into account the willingness of farmers to invest in the construction of storage facilities, this could also be Vinnytsia region and regions of western Ukraine.

Maruschak said that the investments required to build and equip such vegetable storage facilities are quite large and beyond the capabilities of micro- and small-size farmers, and are also unaffordable for farmers growing vegetables on areas of up to 500 hectares.