Focus
on advantages
Power to be
on the upswing
MAJOR EVENTS
OF 2013
MAJOR BUSINESS
DIVISIONS
MARKETING
AND SALES

In 2013 we accomplished reorganization of milk processing plants in the form of amalgamation with “MILKOM” JSC. Concurrently with the process we concentrated manufacturing areas upon production of certain kind of dairy products: “Sarapul-moloko” was upon UHT dairy products, “Glazov-moloko” was upon cottage cheese and powder dairy products, “Kezsky cheese factory” was upon cheeses, “Izhmoloko” was upon “Fresh” products. We invested in technological infrastructure 500 million rubles for steadily development of the manufacturing areas.

In 2013 manufacturing area of “Sarapul-moloko” “MILKOM” JSC worked at increasing in milk processing capacity: the second line of separator section was launched. As a result the output increased 1.5 times. In 2014 “Sarapul-moloko” will continue increasing production capacity by means of new line Tetra Pak A3/CompactFlex with 700 tons per month capacity. The plant increases output by 20-30% annually. For efficient product movements and dispatch accounting in 2013 we completed investing project on automated logistic center building. The center holds more than 2 300tons of production and is supplied with warehouse management system (WMS). By means of it we enhanced the speed and quality of loading operations. The warehouse’s capacity allows loading from 10 to 20 cars of 20 tons capacity a day.


Besides in 2013 “Sarapul-moloko” in association with Tetra Pak proceeded to project realization on lean manufacturing technology adoption for production and ecological efficiency increasing. By way of project realization in packing line, operating costs, that make 15% of products cost price, reduced 10,4%. Electric power, water and steam consumption dropped 29%. In 2014 we are planning to extend the program influence to all the other milk processing manufacturing areas of “MILKOM” JSC.

In 2013 we decided to build experimental shop within the manufacturing area of “Izhmiloko”. We will practice complete production cycle of novelties there. As a result we will be able to reduce novelties launching costs and to respond market trends. The project cost will be 17,5 million rubles.

In 2013 we paid special attention at adoption of technology which allows producing natural foods of improved storageability: from 10 to 21 days unpreserved. “Kezsky cheese factory” launched dairy products filling line in Ecolean packs. “Izhmoloko” launched filling line in PET bottles. “Glazov-moloko” launched cottage cheese in protective atmosphere production line. Besides soft cheese plant was built at “Kezsky cheese factory”. As a result we extended considerably the geographic reach: nowadays dairy products of the Company are supplied to majority of regions of Russia, countries of the near abroad – Kazakhstan, Turkmenistan and Byelorussia. At the same time we keep on developing powdered milk product manufacturing at “Glazov-
-moloko” and proceed to produce whey protein concentrate and demineralized permeate. We launched demineralized whey powder delivery to “Campina”. Now we negotiate with “Cargill” and “Danone”.

KEY PERFORMANCE INDICATORS

INDICATOR 20092010201120122013
Sales revenue, million rubles 3 9065 0836 3409 11411 192
Net profit, million rubles 219271295456380*
Net assets, million rubles 1 0721 3431 6222 0711 653**
EBITDA, million rubles 393508688973957
EBITDA, % 101010.910.78.5
*Index fluctuation is connected with raw-milk price substantial growth
**Index fluctuation is conditioned upon dividend payout to shareholders

PRODUCTION DYNAMICS

Milk processed, tonnes
251 497
270 301
272 621
303 507
301 424
304 815
2009
2010
2011
2012
2013
2014
(forecast)