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Annual Report 2020

Sugar Business

Rusagro is one of the Russian's largest sugar producers.

The sugar business of the agricultural holding is represented by nine factories. The regions of presence of the sugar segment LLC Rusagro group of companies are constantly expanding. Now it is almost the entire Central Russia. The company's main assets are located in the Tambov, Belgorod, Kursk, Oryol and Voronezh regions. Today Rusagro is the No. 1 player in the Russian market of white lump sugar, and the No. 2 sugar producer in Russia.

Up Until, 2015 inclusively, Rusagro's sugar business was comprised of six plants located in the Tambov and Belgorod regions. In 2016, as a result of the takeover of Razgulay company, the company's sugar business expanded to include four more enterprises: "Kshensky Sugar Refinery" and "Krivets Sugar" in Kursk Region, "Otradinsky Sugar Refinery " in Orel Region, as well as "Hercules" Cereal Factory in Voronezh Region.

In 2014, Rusagro launched the World Class Production program. It is aimed at financial savings through intelligent and efficient organization of the employees’ and factories performance. Today, all Rusagro sugar producing companies are working under the improvement program. By the beginning of 2017, all the main elements of this program were implemented in the sugar business.

As a result of sugar beet processing, Rusagro sugar producing factories produce two main by — products: pulp and molasses. The pulp is sold on the side, and molasses is used for additional sugar production and betaine release. In 2017, the first molasses desugarization station was launched in the Tambov region, and at the end of 2019 the second one was launched in the Belgorod region. These projects are significant for the sugar business.

In 2016, the desugarization station was launched at the Znamenskiy sugar factory. Here, the special extract is produced from the molasses of three sugar factories in the Tambov region for subsequent production of sugar from it. The project has become the second example of using this technology in Russia.

In December 2019, the agricultural holding launched the largest desugarization station in Russia and the world at the Chernyansky factory in the Belgorod region. Its capacity is sufficient for processing molasses from six factories in the Belgorod, Kursk and Oryol regions. The project opened up new sales opportunities. The quality of sugar produced at the desugarization station does not differ from that produced in the traditional way - it is the same white, crystalline and corresponds to GOST. Moreover, the technology of deep processing implies the production of about 4 thousand tons of betaine per year. It is planned to deliver it to foreign markets as well.

From 2015 to 2019, sugar production increased by 15 % — from 765 thousand to 881 thousand tons as a result of an increase in the processing capacity of sugar beet (+53 %) and the launch of a factory for the production of molasses extract. In 2019, sugar production increased by 14 % due to the high sugar beet harvest. In 2020, the output of sugar from the extract was increased as a result of the launch of the second desugarization station.

Today, the total capacity of sugar beet processing at Rusagro factories is 53,850 tons per day, and sugar production is 7,780 tons per day. The total capacity of granulated pulp is 2,312 tons per day, 2,154 tons of molasses per day, which is processed in Tambov and Belgorod at molasses deshugarization stations, the total capacity of which is 975 tons per day.

Over the past few years, the company has been paying more and more attention to the development and implementation of innovative solutions, which are considered as one of the key sources of long-term sustainable growth. The sugar business is one of the company's most high-tech businesses.

In accordance with the Group's overall strategy, the sugar business continues to actively promote its own brands and increases their presence in all segments of the pressed and packaged sugar market.

Currently, the portfolio of the holding includes brands: "Russian sugar", "Chaikofsky", Mon Cafe and "Brownie". Rusagro is constantly working on bringing new products to the market in the "Sugar" category. In 2015, the sugar business started working in a new category – "Cereals".

In May 2015, Rusagro started packing long-grain raw rice in a transparent film without a trademark. And in December 2015, it introduced a new brand to the market – "Warm traditions". Brand " Warm traditions "the first brand of sugar Business of Rusagro in the category "Cereals", launched on the market in 2016. The brand is produced at one of the largest grain processing enterprises in Russia – the Hercules factory in Bobrov, Voronezh region. Modern equipment for cleaning, sorting and calibration of cereals guarantees high quality products. The company's production standards meet the requirements of FSSC 22000.

Rusagro's long-term development strategy involves further development and promotion of sugar business brands. To meet all the needs of the population in a high-quality and environmentally friendly product. Our goal is to maintain a leading position in the sugar market in Russia and the CIS countries. We are working to make the life of Russians better and longer.