Company profile: OJSC MINSK MARGARINE PLANT

Transcription

1 Company profile: OJSC MINSK MARGARINE PLANT INVESTMENT OPPORTUNITY: The National Agency of Investment and Privatization of the Republic of Belarus considers selling % of the share capital in Open Joint- Stock Company Minsk Margarine Plant ( MMP or the Company ) to a strategic investor in a renewed tender. MMP is among the leading producers of margarine, mayonnaise and refined oils and fat products in Belarus. The company has over 60 years of history and enjoys strong brand recognition as well as stable market shares for its products in the domestic market. Located in Minsk, the capital of Belarus, the Company is actively trading throughout the whole country and developing export markets. The consortium of Mattig Management Partners, Alfa Bank, and Egorov, Puginsky, Afanasiev and Partners, with World Bank support, is adviser to the National Agency of Investment and Privatization of the Republic of Belarus in carrying out the transaction through public tender. The tender process is re-launched in May Tender Documentation, including Information Memorandum, will be available to investors. Shortlisted investors will be invited to carry out detailed due diligence reviews at the Company. THE COMPANY: Full Name Open Joint-Stock Company Minsk Margarine Plant Industry Production of margarine, mayonnaise, refined oils, fats, spreads, ketchup, horseradish and mustard. Established 1951 Shareholders: General Manager % state-owned; 5.904% physical and legal entities Aleksandr V. Shatilo Employees 471 (as per Jan. 1, 2015) LOCATION: MMP is located in the capital city of Minsk on 3.95 ha area, including 3.35 ha used on the basis of permanent right of use. The site allows further expansion of production.

2 PRODUCTS and CAPACITY: MMP s product range comprises over 60 products, mostly produced under the trademark Zolotaya Kaplya and grouped under the following main product categories: margarines fat content ranging from 50% to 82%; mayonnaises 19 types with differing fat contents (from 20% to 67%) in various packs; culinary and confectionery fats bulk and foil packed; vegetable oils refined, deodirized and frozen-out sunflower oil; unrefined sunflower oil; refined, deodorized rapeseed oil; flavored rapeseed oil; blended rapeseed-sunflower oil; blended sunflower-olive oil; spreads Lux (82.5% butterfat); Krestyanskiy (72.5%), Domashniy (50%), spread with chocolate flavor (50%); ketchups Ajika, Spicy, Classic, Barbecue, Tomato, Mild, etc. horseradish Belarusian Classic, Belarusian with Lemon, Belarusian with Beet, Belarusian with Mustard ; mustard savory, grainy, mild, mild with nuts; cheese product; mayonnaise-type sauces: mushroom sauce, mustard sauce, Belarusian with Horseradish sauce, Chinese sauce, Thousand Islands, tartar sauce. The production process is carried out in compliance with ISO 9001:2007 and GOST national standards. The plant has the following production capacity per main product category: margarine products 13,700 tons per year (capacity utilization of 47.7% in 2014); mayonnaise, ketchup, horseradish and mustard products 11, 280 tons per year (capacity utilization of 57.3% in 2014); refined packaged vegetable oils 7,100 tons per year (capacity utilization of 40.5% in 2014).

3 MARKET: The Belarusian market for margarine, oils and fats is competitive and lacks a clear market leader. The market of refined oils has enjoyed positive dynamics over the last years and has increased from 16.9 thousand tons in 2000 to 25.7 thousand tons in The consumption of bottled vegetable oils per year averages thousand tons, with sunflower oil being the preferred type (80% of consumers). The growth potential is significant given the current consumption levels of 15.9 kg of vegetable oil per capita compared to 45 kg per capita in the European Union. The domestic demand for mayonnaise products is continuously rising, with the market getting increasingly attractive for foreign producers and importers. Mayonnaise imports have risen from 5,222 tons in 2012, to 6,762 tons in 2013 and 7,186 tons in The margarine market has been steadily growing, with increased offering from both domestic and imported production. The market shares of MMP s main product groups in the domestic market are as follows: Margarine products Market volume 000 tons Share MMP % Market volume 000 tons Share MMP % Market volume 000 tons* Share MMP % 23,5 40, ,7 24,5 30,7 Mayonnaise 16,8 38,5 29,8 19,5 30,2 20,1 Vegetable oils 207,5 1,5 234,8 1,97 159,7 2,7 * Company estimates. The main domestic competitors of the Company are: Gomel Fat Factory ABC Kamako Bobruisk Vegetable Oils Factory The main international competitors are: Essen Production AG, Russia Unilever, Russia Oil Extraction Plant Yug Rusi, Russia Creativ, Ukraine MJK JSC, Russia EFKO JSC, Russia Ukrolya, Ukraine

4 PRODUCTION AND SALES: Margarine had the highest share within the sales breakdown (tons) with 33.9%, followed by mayonnaise with 31.8% and bottled vegetable oils with 15.6% (2014 data). As a comparison, breakdown of sales per tons for is presented in the table below tons tons tons share Mayonnaise ,8% Mayonnaise unpackaged (bulk) ,1% Margarine ,8% Margarine unpackaged ,9% Fat unpackaged ,5% Oil ,6% Oil unpackaged ,0% Spread unpackaged ,4% Spread packaged ,2% Sauce ,4% Sales Breakdown per category and tons, 2014, % Cheese product ,3% Horseradish ,4% 2% 1% 3% 5% Mustard ,3% 8% 15% 34% 32% Margarine Oil, non-packaged Margarine, non-package Spread Mayonnaise Ketchup Bottled oil others Ketchup ,3% Total % The consumer market (В2С) represents the main share of MMP s sales (67.4 % in 2014). Packaged margarine, mayonnaise and bottled oil account for majority of sales % of the production is sold in Minsk and Minsk region. MMP is also exporting (less than 5% of sales) to the Russian market (which is part of the Eurasian Economic Union of Belarus, Russia and Kazakhstan) and has all necessary registrations for the Eurasian Economic Union.

5 WORKFORCE: The Company has a well-trained and motivated workforce. As of the total number of employees amounts to 471 persons. The average wage at the Company for January 2015 amounted to BYR 6.5 million (or USD 451 per month). FINANCIAL DATA (according to IFRS): Financial results prepared according to IFRS are provided below (in USD thousand). SELECTED BALANCE SHEET ITEMS: SELECTED INCOME STATEMENT ITEMS: Positions in 000 USD m 2014 Positions in 000 USD m 2014 Non-current assets Revenue Current assets Gross Profit Total assets Operating Profit (Loss) (389) Share capital EBITDA Total equity Gross Margin 15,4% 15,8% 10,7% Total liabilities Operating Margin 3,1% 1,1% -1,9% Total equity/liabilities EBITDA Margin 8,2% 8,1% 8,3%

6 CONTACTS: Svetla Pehlivanova-Porenta Director CEE, Mattig Management Partners Tel /Fax svetla.porenta@mattig-management.at Sergey Mukhanaw Deputy Team Leader, Privatization Advisory Services for Pool 3 (OJSC Minsk Margarine Plant and OJSC Konfa) Mattig Management Partners-Alfa Bank-EPA&P Consortium UE Volat Capital Tel: sm@volat-capital.by Olga Rutkovskaya Head of Privatization Department National Agency of Investment and Privaitzation Republic of Belarus Tel E-mall: olga_rutkovskaya@investinbelarus.by DISCLAIMER: This document was prepared with the assistance of the National Agency of Investment and Privatization of the Republic of Belarus and OJSC Minsk Margarine Plant (the Company ) and is based on information and sources supplied by the Company which we believe to be reliable but is not guaranteed to be complete and/or accurate. The Consortium of Mattig Management Partners GmbH, CJSC Alfa- Bank, and LLC Egorov, Puginsky, Afanasiev and Partners shall not consider any person or legal entity except the National Agency of Investment and Privatization of the Republic of Belarus as its client in this particular transaction. Potential investors are recommended to consult their own advisers in all stages and aspects of the transaction.