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Annual Report 2016

About Us

Rusagro Group is the largest vertically integrated agriculture industry holding company in Russia. At the present time it occupies the leading positions in sugar, pork, crop, oil and fats production. Land bank of the Group consists of more than 600 thousand ha. In 2015 a number of investment banks named Rusagro Group one of the most profitable and fastest growing consumer segment companies in CIS. Company is listed on the London Stock Exchange and on the Moscow Stock Exchange.

The main assets of Rusagro Group are located in Belgorod region, Tambov region, Sverdlovsk region, Voronezh region, Samara region, Kursk region and Orlov region, as well as in Primorskiy region, which allows to diversify business regionally. Headquarters of the holding are located in Moscow.

Modern world technologies are integrated in all business divisions of the Group in terms of equipment as well as in terms of management practices.

Geography of Rusagro sales is constantly growing. Currently the Company sells products in more than 80 region of Russia and more than 15 countries abroad.

Rusagro products are sold under those brands:

 

SUGAR BUSINESS

    

OIL&FATS BUSINESS

    

MEAT BUSINESS

"Russkii Sakhar"

"Chaikofsky"

"Brauni"

"Mon Cafe"

"Tepliye Traditsii"
(rice, buckwheat)

"Mechta Khoziayki"

"Schedroe Leto"

"Provansal EZhK"

"EZhK. Gotovim Doma"

"Maslava"

"Soya&Co"

"Slovo Myasnika"

 

The company has more than 14 thousand employees. The Group considers its employees to be its greatest and most essential asset.

Therefore, it gives them opportunities to unlock their potential, refine their knowledge and skills, and participate in interesting innovative projects.

Corporate social responsibility is an integral and vital part of Rusagro Group business. The Company promotes the development of regions where it has a presence, cares about protecting the environment, practices professional management of occupational health and safety, pays taxes and wages on time, and pursues a broad range of charitable activities aimed at education development.

The story of one of the largest vertically-integrated agriculture industry holding companies in Russia and the CIS began in 1995 with sugar import operations and later import and processing of raw sugar cane in Russia. Soon the holding began to take shape, which can be divided into the following key stages:

1997-2003 Asset acquisitions

The Group acquires its first sugar plants in Belgorod region to maximize sugar trading profits.

In order to supply sugar plants with sugar beet, the Group launches its own agriculture project in Belgorod region. Land resources configuration provides for efficient sugar beet transport logistics – the distance from the field to the plant does not exceed 60 kilometers.

Building an integrated vertical for agriculture production, the Group acquires elevators to provide storage for its own grain and for trade transactions.

The Company expands into the production of vegetable oil and oil and fats production, which will later become a separate oil and fats division.

The Company focuses on expanding its presence on the Russian sugar market and launches its first retail brand in 2003.

Rusagro Group of Companies LLC was established on 3 February 2003 and today owns all assets of the Group. Operating activities are held by subsidiaries.

2004-2005 Establishment of the Rusagro Group

The holding company is incorporated.

The oil and fats division of the Group expands its presence on the market, acquiring assets in Voronezh region and Krasnodar territory.

Land bank expansion in Belgorod region.

The Group optimizes portfolio by selling grain trading and elevators that were not associated with the production and storage of the Company’s own grain.

2006-2007 Consolidation and expansion

The Group focuses on the sugar and agriculture businesses and decides to sell oil and fats assets in the south and center of Russia.

The Group invests the money raised into expanding land bank, the main aim of which is to provide sugar beet – the most profitable crop – to the Group’s sugar plants in Belgorod and Tambov regions.

A project to build a modern pig breeding complex was launched on the company’s own lands in Belgorod region.

2008-2010 Stage of growth and attaining leadership on key markets

After acquiring two of the largest sugar plants in Russia, the Group becomes a leading sugar manufacturer in the country and one of the retail brand leaders.

The pig breeding complex in Belgorod region is completed and reaches projected capacity and construction of a new complex begins in Tambov region.

The Group continues to expand its land bank and at the same time increases its crop yield by using modern equipment and technology.

2011-2013 Entering the international shares market

2011 - the most important event of the year - access to international capital markets. The initial public offering has taken place on the London Stock Exchange and has brought the Company about 300 million dollars to finance long-term investment programs.

In general, the Company's year has become a time of record production and high price volatility. The production of vegetable oil is back to business.

As a result of the modernization of production lines in 2011, the total processing capacity of sugar beet has been increased by 13%, while the production capacity of the packed and compressed sugar (the most promising segment) has grown by 33%. The brand "Russian Sugar" has been awarded as "Product of the Year" by National Trade Association.

2012 – the company shows the highest rate of EBITDA, makes use of positive price environment and making a record investment.

For the first time Agricultural business has become the most profitable business - where projects on automation and precise farming have started.

Meat business is in the process of growth and increasing the assets in the form of construction of new pig farms and the beginning of construction of a new modern slaughter production in the Tambov region.

The main events of the year for the fat and oil division have been the first full year of operation of Bezenchuk oil extraction plant and the purchase of the brand "Mechta Khozyaiki" where fat factory in Yekaterinburg has begun production of mayonnaise. Oil and fat business shows a record financial result.

Adopted dividend policy - 25% of net profit under IFRS has been accepted.

2014 - Current time. Further growth

2014 – the company is breaking all records set against a background of instability on loans, the reduction of state support in exchange rates and interest rates, changes in the retail trade and the reduction of consumer income. As a result, the Group's revenue rose to 59.1 billion rubles, EBITDA has reached 18.1 billion rubles., while net profit amounted to 20.2 billion rubles.

The largest contribution to growth in EBITDA has been contributed by Meat business. The development of this segment is due to the commissioning of new production facilities in the Tambov region. The company has become the second largest pork producer in Russia.

The sugar business has shown a significant increase in sales. Ruble devaluation and high quality raw materials have a positive influence in that business.

Agricultural division remains the basis of the Group, supplying raw materials to other business segments. The success has been achieved at the expense of a high yield and a competitive price level.

In 2014 Oil & Fats business has also showed growth. The Group has examined a number of investment projects.

2015 – A number of investment banks named Rusagro as one of the most profitable and fastest-growing company in the world in the consumer segment in the CIS. Every business division has new assets.

Land and fat and oil assets have been purchased in the Primorsky Krai, has started designing the pig-breeding project in the Primorye Territory, has begun exporting products to China.

Development of meat production continues at the expense of commissioning of slaughter production and release to the retail consumer market. Rusagro purchases government debt and shares of the Razgulyai company, which allowed to grow sugar business with a few sugar factories and land. The acquired assets will enhance significantly sugar and agricultural business.

The investment volume has reached 15 billion rubles, which were distributes to all business divisions.