TOTAL
ORDER
Annual Report
2014
CEO'S ADDRESS

 

Dear partners!
Today KOMOS GROUP is a vertically integrated agro-industrial Holding Company of federal scale, one of the top food producers in Russia. There are several business-lines in the Holding Company: poultry farming and egg production, pig farming and pork processing, milk processing, poultry farming and poultry meat processing, fish processing and frozen food production and distribution. Our plants are located in the Udmurt Republic, Perm region and the Republic of Bashkortostan. Summing up the results of 2014, I can say that the Company performed strong operating and financial results in all the business segments. Total Company earnings in 2014, according to IFRS are 26,7 BRUB against 22.3 BRUB in 2013.

We gained steady growth through investment in technical upgrade and manufacturing areas modernization. We invested over 12 BRUB with the assistance of banks and the State. Owing to investment project and the world best experience implementation we managed to modernize our plants: cutting production costs we refine its quality and competitiveness at once. All these allows us to find solutions for the state problems on import substitution. In July 2014, during the visit in Izhevsk, the Director of Department for agrifood market, food and processing industry regulation of the Ministry of Agriculture of RF, Mikhail Orlov pointed to high technological potential of the Holding Company. We draw on long-term partnership with the State by means of participation in regional and federal programs for agroindustrial sector growth.

In 2014 we invested 1.1 BRUB in reconstruction. We completed modernization of Krasnokamsky meat processing plant in Perm region; we also upgraded Sarapulsky meat processing plant in the Udmurt republic and launched fresh-frozen packed fish producing at Permsky khladokombinat “Sozvezdie”. We came to a decision on ramping up pork and poultry meat producing. Thus we plan to increase meat producing up to 100 000tons by 2017. The key event of 2014 is the feed mill and the grain elevator purchasing in Yanaul, the Republic of Bashkortostan. Production capacity of these new plants will allow us to strengthen the position within the segment of feed producing and storage.

In 2014 we focused on distribution system advancing. In its context we completed egg sorting logistic center construction in Izhevsk, we decided to form trading company, which will be engaged in distribution within the Perm region and neighboring regions. In the same time we expanded the assortment of all the price segments, we increased production of innovatively packed goods and products of high added value.

We raised both own and outside funds as finance sources with the support of the leading Russian banks, like Rosselkhozbank JSC, Gazprombank SC, Sberbank of Russia JSC, Uralsky reconstruction and development bank PC, BINBANK PC, and other.

Methodical work with the brands portfolio and distribution system makes up the core of successful sales. You can meet our products in 61 region of Russia and near abroad. We operate with the top-level retailers, like “PEREKRESTOK”, “Lenta”, “Pyaterochka”, “Magnit”, “Auchan”, “Karusel”, “Sedmoy Kontinent”, “Diksi”, “BILLA”, “SPAR” and other.

Highly skilled professionals are one of the key conditions for the Holding Company success. Nowadays more than 11 thousand people work in the Holding Company. We pay much attention to human resource training at high standards with the help of the best tutors and experts. In 2014 only we invested 10.8 MRUB in human resource training.

I would like to express my profound gratitude to our employees, creditors, investors, and to government and municipalities in regions of our presence. The results achieved in 2014 proved that the strategy we pursued was effective, because balance of all business segments and investments in production automation provided the solid growth for the Holding Company. I am quite sure that in 2015 we will make a significant contribution to the Government target on import substitution, enlarging the products assortment within all the price segments. All these will help us to expand the geographic reach and to grow the share of domestic food within the Russian market and to promote the State food supply security therefore.

Chairman of the Management Committee – CEO
KOMOS GROUP LLC
Andrey Shutov