The march of consolidation in Ukraine's farm sector took another step when Kernel Holdings, which in April raised an acquisition warchest, unveiled a $140m deal to purchase another oilseeds crushing plant.

Kernel, the Ukraine-based silos-to-sunflowers group, said its crush capacity would expand to 2.6m tonnes a year with the purchase of the Black Sea Industries plant in the port of Illichevsk.

The deal comes two months after Kernel, issuing some $125m in new stock, braced investors for further takeovers, following the purchase of Ukrros, a grain grower and sugar producer.

However, other buyers have also been focusing anew on the Ukraine farm market, with Mriya Agro raising $250m "to fund aggressive expansion", while poultry group Agroton and dairy producer Milkiland have also unveiled an interest in farm sector deals.

Last week, Eastern European farm operator Continental Farmers Group raised more than E16m through its IPO, ahead of listing in Dublin and London, to fund plans to lift its Ukrainian land holdings to 50,000 hectares.

'Close to ideal location' 

Kernel's acquisition comes two years after the group signed a long-term agreement for the right to crush 230,000 tonnes of sunflower seed a year at the Black Sea Industries plant, equivalent to nearly half the site's capacity.

This 2009 agreement was signed shortly before Kernel bought Allseeds to confirm its place among the top rank of oilseed crushers in Ukraine, which vies with the European Union for second place in world sunflower growers, after Russia.

The plant has a "close to ideal" location, next to Kernel's own grain terminal in Illichevsk, Andrey Verevskyy, the Kernel chairman, said.

"Both the oil and meal produced at the crushing plant are directly transported through our grain terminal and shipped onto vessels for export," he added.

"Not only will we reap immediate benefits from this acquisition, but we also see significant opportunities to develop further synergies with our terminal."

The deal, which still requires approval from Ukrainian regulators, is being structured, like the Ukrros acquisition, through a call option, although this time over 100% of the target's equity.

Kernel shares, which are listed in Warsaw, tumbled 6.6% lower to 74.70 zloty in afternoon deals.