AgroGeneration - "AgroGeneration 2016 – Results and Achievements"

April 21, 2017

On April 1-2 AgroGeneration gathered its team to summarize the company’s performance in 2016. The grand event took place at a marvelous spot of the Ukrainian Subcarpathia – in the village of Skhidnytsia.

All factors were analyzed, both internal and external, that have had an impact on the development of agriculture over the past three years. Such issues as global food security and growing food demand, were particularly stressed. New investment channels and the company’s promotion on the domestic and international markets have been discussed as well.

 

“Speaking of our results over the last three years, we have achieved our targets. Our long-term strategy is to grow - that means first and foremost, the companies land bank and its storage capacity. We will see how it goes and consider options. AgroGeneration’s strategy aims to increase business value and generate high profit. We achieve this through operational synergies generating economies of scale and through the consolidation of land into effective management structures. What we find successful is the optimization of supply, storage, and sale chains with possible gradual horizontal and vertical integration of companies,” stated John Shmorhun, CEO of AgroGeneration.

  

Financial results of the company are improving. With the successful restructuring of its long-term debt at the beginning of 2015, AgroGeneration reduced its liabilities in 2016, as announced.

 

The company is successfully attracting financial resources from its partners. It has renewed the $35-million credit line with Alfa-Bank at a lower interest rate. The terms of cooperation with QUADRA Commodities have been enhanced so as to increase the prepayment for future harvest.

“In 2016 we have fulfilled nearly all tasks that we planned. One of the biggest tasks was the strategizing project. Its implementation began at the end of 2015 and we followed it through almost the entire 2016. Within the scope of this project we have defined the mission of AgroGeneration, outlined and improved our strategy, as well as introduced the system of management by objectives (MBO). Moreover, we have worked out and introduced Key Performance Indicators (KPIs). We did a lot of work, which resulted in the creation of an effective staff management and motivation system covering management of the corporate center. In 2017 it will spread to our entities, so that we would have uniform corporate values and culture throughout the company. This will allow us to take the next steps in the development of AgroGeneration,” commented Sergiy Bulavin, Vice President of AgroGeneration.

Conclusions have been drawn on the social and environmental responsibility, which is a part of the company’s strategy and correlates with the environmental sustainability guidelines (FAO).

Thus far, AgroGeneration is proud to have achieved the following:

  • a public company (listed on NYSE Euronext in Paris with a free float of 31%);
  • c.a. 120,000 hectares of cultivated land in 5 regions of Ukraine;
  • c.a. 1,400 employees under strong management;
  • production capacities of 390,000 tons;
  • storage capacities of more than 240,000 tons;
  • 350,000 tons sold against an increasing export profile.

 

AgroGeneration’s plans for further development are ambitious. They include production efficiency improvement and finding ways to increase profitability, expanding and upgrading available production capacities, modernization of machinery, CapEx plan for the renovation of old elevators and building of new storage hubs, land bank optimization and increase, attracting investments and debt for continuous growth, working capital financing, vertical integration, as well as consideration deep grain and oilseeds processing projects.

At the end of the event, three AgroGeneration farms were awarded with distinction. This tradition was initiated by the company’s management and is held on an annual basis in order to enhance competition by encouraging innovations, better profitability and the maintenance and growth of their respective landbanks. Many factors are taken into account, such as yields, profitability, land bank, renovations or major constructions, and other.

  

Lan Agricultural Firm was the winner for the second year in a row. Its General Director Serhii Bairachnyi is convinced that this award should be credited to the entire team of Lan employees.

“This high recognition of our agricultural firm was predictable, because it is the result of aligned teamwork. However, we have no intention to stop there; we will keep on adhering to the company’s strategy aiming at the efficiency of agricultural production,” stated Serhii Bairachnyi, General Director of Lan ALLC.

Authorities of the district acknowledge that Lan is one of the best farms in the Valky and Nova Vodolaha districts. The agricultural firm does not only settle leases  with its land owners in a timely manner, but also builds good cooperation  with the local self-government authorities and takes care of social development of the villages where it leases the land.

The second best was Lishchynske ALLC that effectively operates in Zhytomyr region. The entire team of the farm under the charge of its general director Oleh Mazur managed to overcome and even thrived through all the challenges that came up this year – weather surprises, changes in laws, and land reforms.

I am glad to see that farms of the Western Cluster win recognition both within the company and among our partners and land owners. It’s so great that their outstanding performance is obvious not only to employees of the company, but also to the people for whose sake the entire agriculture is working. Such competitions encourage more fruitful activities and inspire us to become better than we were a year ago. I congratulate Oleh Volodymyrovych and the entire team of Lishchynske ALLC on this great achievement,” commented Viktor Bykov, head of AgroGeneration’s Western Cluster.

  

Donets AIC LLC enjoys high confidence of citizens in the Balakleia district. Over the last years we observed the tendency of the landowners leaving the competition and giving their land plots to Donets. This is because our agricultural firm makes timely settlements and is socially responsible. It provides aid to schools, kindergartens, primary healthcare units, and to the local agricultural vocational school. Donets AIC LLC was rated the third best agricultural farm among entities of AgroGeneration.