MOSCOW--(BUSINESS WIRE)--Rusagro Group of companiesi (hereinafter referred to as Rusagro Group, the Group or the Company) and professional partnership of IR agency Interfax Business Service (hereinafter referred to as IBS) and B2B Zebra Design Bureau (hereinafter referred to as Zebra) have successfully completed the project of preparing an inaugural annual report of the Group for the year 2011.
The Group’s Annual report was prepared by IBS experts within fixed term and in accordance with the London Stock Exchange (LSE) and the Financial Services Authority (FSA) requirements.
During preparation of the report the IBS experts were pleased to take note that Russian agricultural business not only does exist but in fact develops nicely. Furthermore, “the new wave” companies established in 90’s-2000’s have become still more active players in this market. Thus, Rusagro Group occupies leading positions in the appropriate market segments. The Company is the largest importer and processor of raw sugar, ranks second in Russia in sugar and first in sugar cubes production. In meat business segment the Group ranks fifth in Russia in pork production, while in oil and fat segment it stands first in the production of consumer margarine, fifth in the production of mayonnaise and seventh in the production of vegetable oil. The Group’s oil and fats segment products are exported into Central Asia where they also occupy leading position in the market.
The year 2011 was marked by production records, resumption of vegetable oil production and record-breaking price volatility.
The development of all four business segments of the Company testifies to solid foundation laid down with a view to achieving high production and financial results.
Having reviewed the industry and the results of the Company’s operations in 2011 the IBS experts took note as follows:
- The Russian sugar market is reasonably stable in general; the annual consumption of sugar in this country is around 5.6 million tonnes, or 39 kg per capita, exceeding average EU figure by 15%. The major part of sugar (over 66% in 2011) is produced from sugar beet while the rest is produced from imported raw cane-sugar.
- In 2011, seven sugar plants of the Group produced 627 thousand tonnes of cane sugar and 462 thousand tonnes of beet sugar, which is 31% and 113% respectively more than in previous year. Meanwhile the sales income in this segment amounted to 25.6 billion roubles while corrected EBITDA was 1.4 billion roubles.
The Russian meat market is now one of the largest markets in
the world, the pork accounting for 34% of total consumption. The
annual per capita meat consumption in this country is about 65 kg.
This is relatively low figure which is growing all the time. The pork
consumption in 2011 amounted to 3.8 million tonnes (21.6 kg per
capita), the increase of consumption being around 3% per annum during
In meat segment the record-high meat volume was produced and sold, and construction of new pig breeding complexes in Tambov and Belgorod regions continued which will allow to triple the pork production within two years. The sales income in this segment amounted to 5.4 billion roubles while corrected EBITDA was 2.3 billion roubles.
- As far as the Company’s agricultural business is concerned, it is worth noting that in 2011 record-high sugar beet (100% of which are processed at the Company’s plants), sunflower and grain crop was gathered and record-high crop yields of sugar beet and sunflower achieved. Sales income in this segment amounted to 6.7 billion roubles while corrected EBITDA was 1.9 billion roubles.
- Mayonnaise market of Russia and CIS countries is distinguished by significant volume and stable growth rate. Mayonnaise consumption in Russia amounted to 737.8 thousand tonnes in 2011 while consolidated annual growth rate during 2006-2011 was 2.3%. Such a situation is due to traditional mayonnaise consumption pattern in Russia where at least 95.5% of households use it as a dressing to practically any meal.
- The position of margarine in the Russian market is different: the margarine consumption in Russia is below world average level (0.47 and 1.25 kg per capita respectively) and significantly lower than in West and East European countries (5.3 and 6.7 kg per capita respectively).
- Vegetable oil consumption (including vegetable oil containing products) in Russia in 2011 was 1.92 million tonnes, or 13.5 kg per capita. The vegetable oil per capita consumption increased by 1.9% compared to 2010. It approximately corresponds to the annual growth rates of consumption during the period since 2005 until now.
- In oil and fats segment the Company holds its position of the largest producer of packed margarine, with market share of about 32% in Russia, and the fifth mayonnaise producer (market share - 7%). Export of products increased in 2011 by 11% compared to previous year; sales geography is constantly expanding. Production of mayonnaise in 2011 amounted to 57 thousand tonnes while that of margarine was 35 thousand tonnes. Sales income in this segment amounted to 6.8 billion roubles while corrected EBITDA was 0.6 billion roubles.
As Maxim Basov, the CEO of the Group of Companies Rusagro OJSC, pointed out – “We take the information transparency of the Company seriously and emphasize the value of analytical materials worked out specifically for the investment community during regular meetings with investors and investment analysts. In this regard we are glad that our inaugural report has not become for us just another document subject to compulsory disclosure, but has turned out to be an instrument actually helping us in our relations with investment community.”
“We are sincerely satisfied with the achieved results and working relations with the employees of the Rusagro Group of companies,” remarked Stanislav Martyushev, the CEO of IR agency Interfax Business Service. “Our colleagues submitted all required information without a hitch and in time, were attentive to our demands and recommendations. We are confident that the presentation annual report will help the Company successfully meet still more complex challenges at the capital markets next year.
I would also like to note at the end of this project the successful work of our long-term partnership with Zebra Design Bureau. This partnership offers its clients the solution which is unique for Russia: ‘the turn-key’ preparation of world class presentation annual reports. This became possible due to blending of our well developed competencies in various fields: development of convincing content for investors, advanced international designer solutions, flexibility of printed and online formats of corporate reports.”
“We can confidently say that the Rusagro inaugural report has set the bar high for the company,” noted Andrey Kozhevnikov, the CEO of B2B Zebra Design Bureau. – “The report is certainly in line with those of LSE issuers not only because of effective content and design layout – everything, even printing on FSC-certified paper, brings Rusagro report closer to the best international standards.”
The Rusagro Group annual report can be downloaded here:
NOTES FOR EDITORS
Rusagro Group is one of the largest vertically integrated agro-holdings in Russia. The enterprises belonging to the Group operate in four business segments: sugar segment (seven sugar plants in Belgorod and Tambov regions), meat segment (two major pig breeding complexes in Belgorod and Tambov regions), agricultural segment (large land pool, controlled by the Group in Belgorod, Voronezh and Tambov regions, is used for sugar beet, sunflower and various grains production), and oil and fats segment (oil extraction plant in Samara region and oil and fats plant in Ekaterinburg).
In April 2011 Ros Agro Plc (LSE ticker:AGRO), the head company of Rusagro Group, carried out IPO at London Stock Exchange having offered the investors the depositary receipts (5 receipts correspond to one share). Total IPO volume taking an overallotment option into account amounted to $375 million. The Company will use the attracted funds to acquire assets, expand the land pool, upgrade production facilities and add new business segments.
IR agency Interfax Business Service is a leading Russian consulting company in the field of Investor Relations or IR. The agency specializes in providing technological services for the Investor Relations, preparing the content to communicate with investors and providing consulting services in the field of Investor Relations. In 2005-2011 the company provided consulting and IR services to over 70 clients in Russia, the Ukraine, and Kazakhstan in more than 10 industries. IBS is a subsidiary of International information Group Interfax and is uniquely positioned for rendering IR services: it has resources of a leading Russian information agency, close business relations with Russian institutional and private investors, work experience with issuers and investors in various fields (information disclosure, ratings, credit risks, analytics) and in different CIS countries.
B2B Zebra Design Bureau is the largest publisher of printed and interactive annual reports in Russia. The company significantly contributes to forming standards for interactive reports, forms part of the judging panels of federal annual reports competitions. In 2011, B2B Design Bureau Zebra together with Interfax Business Service CJSC supported by MICEX and RTS exchanges conducted first integrated annual report publishing market research in Russia.
i The Group and the Rosagro Group mean the ROS AGRO PLC and its subsidiaries.