The Chinese state-owned food processing company China Oil and Food Corporation, more widely known as the COFCO group, has signed a Memorandum of Understanding to develop port infrastructure in Mariupol.
The project will bring over $50 million to the port and at least ninety new jobs to the city of 440,000 people located 720 kilometers to the southeast of Kyiv.
The giant Chinese conglomerate signed the document on Oct. 29 through its Ukrainian branch LLC “Cofco Agri Resources Ukraine” with the Administration Sea Port of Mariupol and the Commercial Seaport of Mariupol.
According to the memorandum, the parties will cooperate on the reconstruction of two docking sites, the construction of a second stage for the port’s grain terminal and the creation of an entire transshipment complex destined for agricultural products.
Ukrainian Infrastructure Minister Vladyslav Krikly supervised the signing. Even though it is legally not binding, he said that the project would boost the development of the agricultural industry in the Azov Sea region by lowering the cost of logistics.
Back in 2015, China’s COFCO bought Noble Agri Resources, an international agricultural corporation with assets in Ukraine. A year later, the conglomerate opened a grain terminal in the port of Mykolaiv, a city of 480,000 people located 460 kilometers to the south of Kyiv.
That isn’t the only port where China is massively investing. In 2017, Beijing pledged at least $7 billion to revamp or build new infrastructure in Ukraine. In 2018, the China Harbor Engineering firm renovated and dredged the Yuzhny port on the Black Sea coast, a $40-million investment aimed at giving larger ships access to the port.
Last September, the National Bank of Ukraine reported that China had become the country’s largest trading partner, pushing Russia into second place. The volume of trade between the countries reached over $2.5 billion, representing roughly 10.6 percent of Ukraine’s overall foreign trade for the first three months of the year.
These investments in Ukraine’s agricultural and seaport sector could give China the capacity to feed 800 million people, experts say.
The Mariupol protocol took place on the sidelines of the RE:THINK investment forum in the city, which brought together top Ukrainian officials and foreign investors to discuss how to reinvigorate the Donbas economy.
However, Chinese investment is not without controversy. A Chinese bid to purchase a controlling share of the Ukrainian aerospace company Motor Sich alarmed Ukraine’s Western partners.
In August, then-U.S. National Security Advisor John Bolton came to Kyiv to encourage the Ukrainian government to block the sale. The deal is currently being reviewed by the Anti-Monopoly Committee of Ukraine.
