grainalliance-presentation2011

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Restoring The Bread Basket of Europe


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panies in Ukraine, where innovative IT-solutions play an

important part. We have also during the last years, even

during the crisis, expanded rapidly, still maintaining our

margins and the strict control. Our goal is to expand

urther in the regions where we are active and continue

developing and improving the company into one o the

leading agricultural companies in Ukraine and the CIS.

We will continue to invest into more modern machinery,

drying and storage acilities and into good competent

co-workers.

I am condent in the development o our company, as

well as the Ukrainian agricultural sector as a whole and

I look orward to the challenges in the years to come.

Introduction by the President

Much had changed when I star-

ted out in the Ukrainian agricul-

tural sector. Still I recognized

the true potential o the rich and

ertile Ukrainian soils. Ukraine

has historically been the bread

basket o Europe and we want to

be apart o the process in resto-

ring the country to this status. I am convinced that with

the right competence, strive, courage, technology and

control great riches could be collected rom the vast

Ukrainian elds. People tend to maybe over emphasize

the Ukrainian soils, I would instead also like to remem-

ber the Ukrainian people and the talent and competence

that lies there. During my years we have managed to

attract and create a strong management team.

I am proud when I say that the core o our company has

already 11 years history o successul arming. During

the last years the company has developed rapidly and

we are today one o the most modern agricultural com-Alex Oronov

CEO


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About Grain Alliance

Grain Alliance is modern arm operator in Ukraine,

which controls approximately 40 000 hectares, o

which 35,000 hectares are cultivated, in our regions;

Kyiv, Cherkassy, Poltava and Chernigiv, the operations

concentrated to an area within a radius o approxima-

tely 80 kilometers. The business is well-integrated

with short distances to the elds and storage acilities.

Grain Alliance has ve grain elevators, three o which

have rail road access.

The core o Grain Alliance has over 10 years o suc-

cessul arming, achieving yields in important crops

like corn, sunfower and wheat above the Ukrainian

average. In 2008, the Ukrainian/American management

team joined orces with a Swedish team o entrepre-

neurs as a result o this a Swedish holding company

was ormed into which capital was added enabling a

more rapid development o the company. In conjunction

with this reorganization strong nancial and organiza-

tional expertise was added to the company and many

parts o the existing organization were restructured

and new modern nancial management practices and

more ecient agricultural practices were introduced.

In addition, new agricultural equipment was added to

the production process.

Today Grain Alliance operates on the basis o wes-

tern European standards o accounting and corporate

governance, e.g. accountability, transparency, airness

and simplicity with the goal o maximizing sharehol-

der value while simultaneously adding value or all

other stakeholders. These principles are ollowed to

ensure that laws, regulations and ethical values are in

compliance with internationally adopted principles and

standards.


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Business concept and strategy

Grain Alliances business concept is to generate re-

turns by increasing productivity and eciency in the

Ukrainian agriculture by implementing best agricul-

tural practices, modern equipment and strict nancial

control.

Since launch Grain Alliance has created a solid organi-

zation, which eciently and sustainably can run a large

scale agriculture operation. The long term goal is to

increase the cultivated area and outperorm western

producers in terms o productivity. In order to reach

these goals we ocus on the ollowing:

Sustainable agriculture our production is orien-

ted towards a long term perspective, thereore a

balanced mix o crops are grown with an emphasis

on crop alteration and soil recovery.

A limited geographical area - Grain Alliances stra-

tegy is to cultivate and operate in a concentrated

geographical area. The radius between the arms

is approximately 80 km. By having arms in close

proximity to each; machinery and equipment can be

used more eciently and the cost o transporting

tractors, harvesters, between elds is lower. The

drying and storage acilities can also eciently

service the existing arms.

Financial management and internal control Grain

Alliance has developed a unique integrated nan-

cial management inormation system, which is

especially developed and adapted to the conditions

o the agriculture sector in the Ukraine and CIS.

Expansion, but not on the expense o productivity,

eciency and control Despite the act that Grain

Alliance is expanding rapidly we expand only when

we are sure that we can maintain or increase pro-

tability rom the start.


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In order to maintain long term protability Grain Al-

liance runs a sustainable agriculture. The Companys

production is oriented towards a long term perspective,

thereore a balanced mix o crops are grown with an

emphasis on crop alteration and soil recovery.

Grain Alliance is also unique in Ukraine by having an

in house laboratory, which monitors and measures the

quality o the lands. In Ukraine there are only a handul

o such laboratories.

By continuously analyzing the soil the agronomists

scientically know what kind o ertilizer to use and in

which quantities. Grain Alliance can also in time react

to problems such as increased acidity o the soil. This

inormation is used in the long term production plan-

ning process thus securing a long term sound usage o

the soil and avoiding exhaustion.

Sustainable agriculture

Moreover, producing crops usually involves regular

plowing, tilling, that stirs up the. Plowing, tilling, is

used to remove weeds, mix in soil amendments like

ertilizers, shape the soil into rows and prepare the

soil or seeding, yet this can make the soil too com-

pact, loss o organic substances, loss o soil microbes,

arthropods, and earthworms, and increased erosion.

To avoid these unavorable eects Grain Alliance uses

the so called no-till method. The No-till approach

reduces or excludes the use o conventional tillage.

Regular tilling degrades the ertility o soils, causes air

and water pollution, intensies drought stress, leads to

an increased uel consumption and even contributes to

global warming.


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Geography of operations

In order to maintain long term protability Grain Al-

liance runs a sustainable agriculture. The Companys

production is oriented towards a long term perspective,

thereore a balanced mix o crops are grown with an

emphasis on crop alteration and soil recovery.

Grain Alliance is also unique in Ukraine by having an

in house laboratory, which monitors and measures the

quality o the lands. In Ukraine there are only a handul

o such laboratories.

By continuously analyzing the soil the agronomists

scientically know what kind o ertilizer to use and in

which quantities. Grain Alliance can also in time react

to problems such as increased acidity o the soil. More-

over, this inormation is used in the long term produc-

tion planning process thus securing a long term sound

usage o the soil and avoiding exhaustion.


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One central component in running an agriculture bu-

siness is the ability to store the grain produced. Grain

Alliance has ve grain elevators in three regions. Three

o the grain elevators have railroad access and Grain

Alliance will continue to invest into storage acilities.

The railroad access acilitates ecient logistics or the

Companys products.

Grain Alliance uses modern equipment, rom produ-

cers as John Deere, Claas, etcetera, directly imported

Drying, storage and equipment

rom the U.S. and Europe. We also have several in-

house service and repair shops. Grain Alliance is con-

tinuously investing into new machinery and equipment.

By adding modern technology and competence we are

gradually increasing the productivity and the quality o

the work perormed.


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Crops

Grain Alliances mix o crops is determined by an over-

all ramework strategy developed by the Companys

agronomists based on scientic measured data. The

allocation o crops is slightly altered rom the ram-

ework strategy based on orecasted outputs and

developments on the international commodities mar-

kets. The overall goal is to have a production mix that

maximizes returns in a long term perspective and do

not exhaust the land. Thereore Grain Alliance, in the

crop planning, strives to retain the superior ertilityo the Ukrainian soil and at the same time cultivate

crops or which one could estimate the best prices.

The strategy is to reduce sunfower and move more

towards a rotation o corn, soybean, barley and milling

wheat. Sunfower as a crop renders high prices, but at

the same time wear out the soil. Soybean on the other

hand, restores and enriches the soil. Land rotated

rom soybean demands less ertilizer. Demand or

soybean is also increasing globally and price o soy-bean has, during the last decade gradually increased.

Yet, soybean demands more precision in the cultiva-

tion process and thus requires investments into new

more modern equipment. International experience also

points towards the benets o a crop rotation between

soybean, corn and wheat/barley.


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www.grainalliance.com

Grain Alliance - BZKVasagatan 38

111 20 Stockholm

Sweden

Grain Alliance - BZKToryana street 11

Kiev region

Ukraine

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