Kernel halts all oilseed processing plants after Russian drone strikes

Kernel Holding SA, the world's largest producer and exporter of sunflower oil, has halted all oilseed processing plants after Russian drone strikes on the company's production facilities. Seed purchases have also been stopped.

A drone struck the territory of the Bandurka oil extraction plant in the Pervomaisk district of the Mykolaiv region at around 05:30 on 13 November. The Ministry of Economy and Environmental Protection reported that the strike damaged three tanks containing sunflower oil and completely destroyed a fourth. The protective berm was also destroyed — oil spilled onto the adjacent territory and contaminated more than 3,500 sq. m of land, without threatening residential buildings. As of noon on 13 November, the oil had not reached any body of water; pumping operations and the construction of additional earthen barriers continued.

The company explained the shutdown by the fact that oilseed crushing is a continuous technological process with an elevated fire risk, and a strike on operating equipment threatens a major blaze and the lives of employees. Kernel said all safe shutdown protocols had been completed and that workers are safe. Despite the downtime, the company maintains its operational and financial stability, continues shipping products from warehouses and intends to fulfil all obligations to farmers and partners.

A representative of Ukraine's military intelligence (HUR) told Bloomberg that Moscow is preparing strikes on new elevators, dairy plants, sunflower oil plants, as well as enterprises in the meat and poultry industries.

Other companies in the sector have also announced shutdowns. Korolivsky Smak stopped production and purchases and cut staff, citing the critical electricity supply situation and the constant threat of strikes. Delta Wilmar Ukraine has suspended all production capacity in the Odesa region since Thursday, while Potoky in Odesa has halted purchases and sunflower processing.

On 10 November, Russian drones struck a critical blow against the Nizhyn oil and fat plant in the Chernihiv region — one of Ukraine's oldest oil extraction enterprises, operating since 1896.

Kernel controls about 10% of global sunflower oil exports. In fiscal year 2024, the company exported 8 million tonnes of agricultural products; its revenue amounted to $4.4 billion, operating profit to $441 million, EBITDA to $558 million, net profit to $322 million and total assets to $3.9 billion. The company's shares have traded on the Warsaw Stock Exchange since November 2007.