Svarog West Group Corporation Key performance indicators 2015
About Svarog West Group Corporation
2003 Khmelnytskyi region
4,000 ha 200 employees Shepetivka Sugar-Mill JSC
2015 GEOGRAPHY ACREAGE PERSONNEL INFRASTRUCTURE
Khmelnytskyi region Chernivtsi region Zhytomyr region
80,000 ha 4,500 employees • Shepetivka Sugar-Mill JSC • Grain, legume, oil and special (niche) crops • Seed material production (seed plant) • Dairy and meat livestock farming • Horticulture • Products processing and storage • Modern MTSs • Agricultural machinery and equipment production • IT Projects • NFC juices production • Corporate Social Responsibility, Charitable Foundation
History The agricultural department was established on the basis of Shepetivka Sugar-Mill JSC to supply sugar production needs with its own raw materials resources
Intensive development of existing business directions
New business directions — dairy and meat livestock farming, MTS Svarog-2006 Corporation was officialy registered on December, 27. The company incorporated 6 farms in Khmelnytskyi region Acquisition of farms in Chernitsi region. New business direction — horticluture Strengthening of the Company's positions and territorial expansion. Rebranding of the Corporation. New name - Svarog West Group
History Own products export program development. Production and recording processes automation on «1C 8» platform
Company legal restructuring and international audit projects start, adoption of IFRS (in partnership with Deloitte company)
The Corporation becomes Ukrainian leader in terms of yield indicators. Business expansion in Khmelnytskyi region
The most powerful in Western Ukraine seed plant, modern fruit storage, juice production line are set into operation The Company's business activity expands in Zhytomyr region. Elevator facilities are increased. The second line of fruit storage with the capacity of 2.5 thousand tons is set into operation. Seed production is intensively developing. New business direction — agricultural machinery and equipment production Special (niche) crops production and processing program starts on a commercial scale. Svarog is Ukrainian leader in terms of wheat, sugar beet and soybean yields. 5% of Ukrainian soybean production market. Automated company management system in on-line mode is created
Competitive Advantages Geographic location
Professional team
Effective implementation of agricultural technologies
Modern material and technical facilities
Diversification of production
Socially responsible business operations
Clear legal structure
High reputation of the Company
Geographic Location of Lands
Zhytomyr
Farm lands
Khmelnytskyi
Chernivtsi
Orchards
Georaphic Location of Lands LAND AREAS CLUSTERS
Slavuta
Chernivtsi region Shepetivka
Novoushitskiy area
Starokostyantyniv
Kamyanets-Podilsky Kelmenetsky area
Sokyryany area
Kitsman area KHMELNYTSKYI
Khmelnytskyi region
Georgaphic Location of Production Facilities
Seed plant Agricultural Machinery and Equipment Plant Livestock farms MTSs
Elevators
Vegetable storages Dairy farms Controlled atmosphere fruitstorages
Complexity of Agriproduction
Seed farms
Modern dairy farms
Nursery garden
Seed plant
In-house fodder base
Controlled atmosphere fruit storages
Stud farms
Weather station
Waste products are used in organic segment of crop farming
Sorting line
Elevators Modern MTSs Leading Inventory producers Export
NFC juices production Export
Svarog West Group Corporation Business Operation CROP FARMING Geography: Khmelnytskyi, Chernivtsi and Zhytomyr regions
Leased land acreage:
80,000 ha Crop production storage:
9
modern cereal receiving stations with a total capacity of
Main crops: corn, soybean, wheat, sugar beet
Niche crops: spelt, beans, mustard, pumpkin, oil flax, chickpeas, lentils
270,000 tons 320,000
Total yield of main crops in 2014: over tons ( where the total yield of soybean - 147,000 tons)
Land Bank Dynamics in 2008-2014 CROP FARMING
Total Yield of Main Crops in 2008-2014 CROP FARMING
2008 2009 2010 2011 2012
ths tons
ths tons
ths tons
ths tons
ths tons
ths tons
2013 ths tons
Yield Dynamics of Main Crops in 2008-2014 CROP FARMING Динаміка врожайності, 11.3 тонн/га 10.3
11.8
12.1
9.3 8.8 6.7
4.8 4.7
4,6
2.0 2008
6.4
6.1
6.3
5.0
3.8
2.5
2.6
2.6
3.0
2010
2011
2012
2013
0.8 2009
CORN, Т/HA
WHEAT, Т/HA
SOYBEAN, Т/HA
2014
Crop Structure Dynamics in 2011-2014 CROP FARMING 80 ths ha 65 ths ha
OTHER CROPS
32,0 %
69 ths ha
35,0 %
14,0 %
25,0 %
22,0 %
CORN
18,0 %
19,0 %
16,4
40,0 % SOYBEAN
25,0 %
24,0 %
2011
2012
22,6 %
16,0 %
30,0 % WHEAT
80 ths ha
2013
10,6 % 4%
46,4 %
2014
SPECIAL (NICHE) CROPS
Seed Plant CROP FARMING
Season work schedule Main crops July
Soybean Land preparation Fertilizing Planting
Plant protection Harvesting
Wheat Land preparation
Fertilizing Planting Plant protection
Harvesting
Spelt Land preparation Fertilizing
Planting Plant protection Harvesting
August
September October
November December
January
February
March
April
May
June
July
August
September October
November December
Seed testing Svarog carries out own wide scale research to raise the efficiency of production and find the best varieties of seeds that will ensure high quality and rich harvest of crops. Company tests 94 varieties of soybeans and 86 varieties of wheat at specially dedicated land plots Research at soybean trial fields •Testing of soybean varieties (foreign selection) for the regions’ conditions •Influence of thousand-seed weight on growth energy, germination and soybean yield •Research on efficiency of applying various mineral fertilizing systems on yield and quality of soybeans •Efficiency of applying various protection systems (fungicides, herbicides, insecticides) on soybeans •Research on efficiency of applying growth regulators on productivity of soybeans •Research on efficiency of applying inoculation (various bacteria) on yield and quality of soybeans • Influence of seeding rate on yield and quality of soybeans • Research on soybeans sowing timing in the regions’ condition •Research on efficiency of applying biostimulators on soybean productivity •Use of mixes of regulators for seed treatment to improve the yield of soybeans
Research at winter wheat trial fields •Testing of winter wheat varieties (foreign selection) for the regions’ conditions •Use of mixes of regulators for seed treatment to raise the yield of winter wheat •Influence of seeding rate on yield and quality of winter wheat •Research of winter wheat sowing timing in the regions’ condition Laboratory research •Influence of seed damaging on sowing indicators • Influence of heterogeneous seeds on sowing indicators • Stillness of seeds during ripening depending on seedvarieties • Research of factors that influence seed lifespan and longevity •Research of influence of various chemicals on seed energy and sprouting •Use of mixes of regulators for seed treatment to improve the development of root system
Season work schedule Main crops July
Corn Land preparation Fertilizing Planting Plant protection Harvesting
Sugar beet Land preparation Fertilizing Planting Plant protection Harvesting
August
September October
November December
January
February
March
April
May
June
July
August
September October
November December
Season work schedule Niche crops January
Haricot Land preparation Fertilizing Planting Plant protection
Harvesting
Pumpkin Land preparation Fertilizing Planting Plant protection Harvesting
Flax Land preparation Fertilizing Planting Plant protection Harvesting
February
March
April
May
June
July
August
September
October
November December
Agricultural Machinery and Equipment Plant SERVICE SECTOR
Capacity of electrical network
Siding rail
Total plant area
Production premises area 2 km
3,4 MV Drinking water
140,000
62,500
m2
m2
1,000 m3
Test run
MTS SERVICE SECTOR Own MTS service that consists of 4 regional subdivisions and has all the required infrastructure
Company’s technical personnel annually undergoes trainings on the plants of the manufacturers
Self-propelled agricultural machinery fleet
500 units 85% – machinery from the over
international manufacturers with a period of operation in the company of no more than 5 years
New project is launched in 2013: manufacturing of modern agricultural machinery, equipment, and information technologies on the basis of Shepetivka Cultivators Factory
CEREAL RECEIVING STATION SERVICE SECTOR Elevators are located in the area of ​developed transportation infrastructure (railway, highway) and arable land clusters
Argentine grain storage technology (silo bags) helps increase the storage capacity up to
500 ths tons
9 certified elevators with a storage capacity of
270 ths tons
Certificated and accredited laboratories of cereal receiving stations
Partners COLLECTIVE ENTERPRISE “BILOTSERKIVKHLIBOPRODUCT” Location: Bila Tserkva, Kyiv region
Flour production plant Capacity of 500 tons/day
Products and services: • wheat flour; • semolina and buckwheat; • peas polished; dietary supplements of wheat germ "Oil", "Hlyukorn", "flakes"; • feed for all farm animals, fish and poultry; • storage and processing of grain;
Buckwheat production plant Highest capacity in Europe - 360 tons/day Feed factory 240 tons/day
Wheat germ processing factory
Founded in 1910
Partners CROP PRODUCTION REALIZATION
80% of crop production is exported
Partners SEEDS, FERTILIZERS AND CROP PROTECTION PRODUCTS
Partners AGRICULTURAL MACHINERY AND EQUIPMENT
Svarog West Group Corporation Business Operation LIVESTOCK FARMING Geography: Khmelnytskyi, Chernivtsi and Zhytomyr regions
Cattle herd:
Strategic direction – dairy farming
12,135 heads
Pedigree cattle include three Ukrainian highproduction cattle breeds, one of which is unique and is bred exclusively in Svarog's livestock complexes
Milk yield per one cow is
Dairy farms are certified as special raw material resources base for production of baby food Livestock farms are almost completely supplied by own fodder base
19-20
liters per 24 hours
Cattle Herd Dynamics in 2009-2014 LIVESTOCK FARMING
2009 2010 2011
ths heads
ths heads
ths heads
ths heads
2012 2013 2014
ths heads
ths heads
Cattle Herd Structure Dynamics in 2010-2014 LIVESTOCK FARMING
YOUNG CATTLE
DAIRY COWS
CATTLE FATTENING
Beef Production Dynamics in 2008-2014 LIVESTOCK FARMING
2014 2013
2008
2012 tons per year
2009
2011
2010
2011
Milk Production Dynamics LIVESTOCK FARMING Annual milk production yields:
2008 2009 2010 2011 2012
2013 2014
Milk yield per one cow:
tons per year
2014 tons per year
tons per year
2013
2008
tons per year
tons per year tons per year
2009
2012 2011
tons per year
2010 tons per year
Partners LIVESTOCK PRODUCTS REALIZATION
ПП РЕНЕТ
Svarog West Group Corporation Business Operation HORTICULTURE Geography: Sokyriany and Khotyn districts of Chernivtsi region
Orchards acreage:
505 ha Seedlings: Supplied with planting material from its own nursery garden
Main orchard crops: apples, pears, stone fruits, berries Production: Juice production line wih capacity of
500 l/hour
Storage of production: Total yield of apples in 2014:
10,600 tons
3 modern controlled atmosphere fruit storages with total capacity of
8,700 tons
Orchards Acreage Dynamics HORTICULTURE ORCHARDSACREAGE
ha
ha
ha
ha
ha ha
ha
SPECIES COMPOSITION OF ORCHARD AREAS fruitful apple tree
74%
young apple tree
fruitful pear tree
8%
14%
stone fruit trees
4%
Apples Total Yield Dynamics in 2008-2014 HORTICULTURE 1,300 tons
2,600 tons
2008
2009 7,300 tons
2012
3,400 tons
2010 11,700 tons
2013
6,600 tons
2011 10,600 tons
2014
Season work schedule Horticulture January
Apple Protection against mice and hare Tree pruning Tying up trees Side dressing (NPK) Application of disease prevention products and pesticide (in 4-7 days) Foliarfeeding Application of growth-regulating chemical Application of herbicide in near wellbore Harvesting of summer apples Apple selling Harvesting of autumn and winter apples Apple storage
February
March
April
May
June
July
August
September October November December
Season work schedule Horticulture January
Pear Protection against mice and hare Tree pruning Tying up trees Side dressing (NPK) Application of disease prevention products and pesticide (in 4-7 days) Foliarfeeding Application of growth-regulating chemical Application of herbicide in near wellbore Pearharvesting Pearstorage Pearselling
February
March
April
May
June
July
August
September October November December
Corporate Social Responsibility
PERSONNEL «Selection» of its own personnel Cooperation with higher educational establishments Advanced Training Programs Safety of labour
ECOLOGY
LOCAL COMMUNITIES
Charitable Foundation Crop rotation Safety of production Organic technologies
Education Health care Culture Sports, Parasports Immateriality Infrastructure Targeted social assistance
Interaction with Local Communities Corporation is in an active cooperation with village and town communities within the territory of its activities.
I II s
a tge
INTERACTION WITH LOCAL COMMUNITIES
2006 – 2010
– Social and Public Communications Department. Social Investments Program «With People and for People». Total sum of investments into social sphere :
UAH 10 mln
Since June 2010 – Strengthening Communities Charitable Foundation as a mean of interaction with local communities and social projectsimplementation.
stage
21
towns
309 villages
Total sum of direct investments in 2010-2014 : over
regions
UAH 40 mln.
Khmelnytskyi Chernivtsi Zhytomyr
Implementation of innovations 1. Use of high-quality fertilizers with low level of carbon footprint to ensure the quality of plants treatment 2. Tailor made sowing technology for soybeans 3. Own designed and produced in partnership with European Company equipment to fulfill the new technology
4. Chemical analysis of soil for smart use of different chemicals and maintaining high quality of soil 5. Introduction of green energy projects: use of waste from crop farming to produce heat, electricity, organic fertilizers
6. Cultivation of crops with high energy potential 7. Application of organic fertilizers to reduce use of chemicals and increase quality of soil 8. Own developed IT software –Precision Agriculture technology
Precision agriculture technology • “Precision agriculture technology” assumes: strict following of crop rotation schemes reduction of emissions and use of chemicals with new machinery and equipment
individual approach to the each field and application of fertilizers and minerals according to the soil analysis combining technological operations in the tramline to preserve the structure of the soil and its surface
• “Precision agriculture technology” has a broad functional that covers all aspects of activities in agricultural company and consists of several main blocks: chief agronomist’s module online field condition monitoring inventories and services tracking system
system for sampling and soil analysis transport movement control system fuel consumption control system
Precision agriculture technology • The use of precision agriculture technology provided numerous benefits for the Company, simultaneously reducing the effect on the ecology: Reduction of CO2 emissions System of precise machinery handling
Increasing the speed of cultivation, which reduces fuel consumption Fuel control system Reduction of fuel consumption as a result of monitoring fuel flows between fueling tankers and machinery together with the fuel control sensors installed on machinery/equipment GPS monitoring and control
Operational dispatch reduces machinery downtime Reduction of losses in soil fertility
Implementation of innovative technology for soil cultivation Reduction in quantity of soil cultivation operations saves fuel and partially eliminates losses in soil fertility Improving the quality of soil using own mineral and organic fertilizers Developing of new compost production methods (from the livestock mould, chicken manure, waste of crop farming)
Precision agriculture technology ďƒ˜ Reduction of fertilizers and chemicals use ďƒź System of aerophotography (online field condition control) Forecasting and preventing plants diseases Optimal and timely soil and/or foliar fertilizing Strict definition of germination phases for planning the use of pesticides and fertilizers Differentiated pesticides application at the critical points of the field ďƒź Laboratory analysis (soil, crops, mineral and organic fertilizers) Saving 10-26% of fertilizers
Application of necessary fertilizers and chemicals based on agrochemical soil characteristics, field relief, and foliar crop diagnosis
R&D Soybean production Company pays a lot of attention to soybeans as a core crop in its crop mix. Given this, significant efforts of the personnel are aimed at finding and choosing the best production technologies, the most yielding and high-protein varieties as well as necessary infrastructure to secure all stages of crop evolution
Infrastructure • Trial plots and seed orchards (including those under irrigation) • Seed plant (preparing, processing of seeds and seed lots formation, equipment manufacturer ‒Cimbria) • Seed laboratory • Research laboratory • Breeding machinery (manufacturer – Sampo) Technological peculiarities • Own seeds treatment technology • Full scale usage of precision agriculture technologies, including: soil analysis, individual approach to each field, control of each production stage • Own technology of cultivation of commodity soybean: unique self-engineered sowing machine Prime Twin 3000 (produced in 2015) • Use of European mineral fertilizers produced by Yara
Breeding • Annual trials of 40 to 70 varieties of soybean on own trial fields • Selection of high-protein varieties of soybean • Cooperation with breeding centers from Austria, Canada, the USA • Annual renovation of seed line with high reproductions • Constant monitoring of know-how at different countries
R&D Soybean production To preserve the high quality of commodity, Svarog monitors all stages of production and carries out numerous laboratory tests – the synergy of scientific and practical approaches is reflected in leading positions in crop yields Production • Formation of new plan of strain renovation •Fields (including those under irrigation); • Sowing, production and harvesting machinery from leading manufacturers; • Quality control and compliance with phytosanitary standards (GMO control on every stage of production process, determination of seeds quality profile on every stage of production process: preparing of seed material, growing, harvesting, processing, formation of commercial lots) on the basis of our own laboratories; • Laboratory researches for determination of seeds condition, the effects of treaters, microelements, promoting agents and salts on the crop quality characteristics and structure analysis, determination of the dependence of changing of seeds sowing characteristics on the its storage duration time); • Processing and storage of commodity soybean in our own elevators (9 elevators, total capacity – 270 ths tons), equipped with up-to-date facilities
R&D Seed testing Svarog carries out own wide scale research to raise the efficiency of production and find the best varieties of seeds that will ensure high quality and rich harvest of crops. Company tests 94 varieties of soybeans and 86 varieties of wheat at specially dedicated land plots Research at soybean trial fields • Testing of soybean varieties (foreign selection) for the regions’ conditions • Influence of thousand-seed weight on growth energy, germination and soybean yield • Research on efficiency of applying various mineral fertilizing systems on yield and quality of soybeans • Efficiency of applying various protection systems (fungicides, herbicides, insecticides) on soybeans • Research on efficiency of applying growth regulators on productivity of soybeans • Research on efficiency of applying inoculation (various bacteria) on yield and quality of soybeans • Influence of seeding rate on yield and quality of soybeans • Research on soybeans sowing timing in the regions’ condition • Research on efficiency of applying biostimulators on soybean productivity • Use of mixes of regulators for seed treatment to improve the yield of soybeans
Research at winter wheat trial fields • Testing of winter wheat varieties (foreign selection) for the regions’ conditions • Use of mixes of regulators for seed treatment to raise the yield of winter wheat • Influence of seeding rate on yield and quality of winter wheat • Influence of sowing timing in the regions’ condition Laboratory research • Influence of seed damaging on sowing indicators • Influence of heterogeneous seeds on sowing indicators • Stillness of seeds during ripening depending on seed varieties • Research of factors that influence seed lifespan and longevity • Research of influence of various chemicals on seed energy and sprouting • Use of mixes of regulators for seed treatment to improve the development of root system
Business approach Svarog understands the importance and responsibility of large business in front of communities, environment and, in case of agricultural company – human needs in food. Company’s motto – With people and for people - reflects those principles in the best way. Innovations • Svarog is recognized as an innovative leader in Ukraine and similar to Bayer invests significant costs and efforts in R&D • Svarog shares Bayer’s ideas of direct relationship of new technologies and human’s well-being. We see that our innovations create new working places, optimize efficiency of work and allow us to earn more, in turn giving more back to communities Environmental safety • Following the latest achievements of chemical giants (Bayer, Syngenta, Du Pont) Company applies user-friendly fertilizers to reduce the carbon footprint and CO2 emissions • Svarog’s own R&D led to production of innovative agri equipment that helps merging technological operations and reduce the use of fuel • Going forward Svarog plans to develop alternative energy projects to convert waste from agriproduction into heat and electricity
Research as a key growth trigger • Svarog sees research as a key enabler for the innovations, growth, prosperity and efficiency. We think that agriculture has to be innovative as well as other industries like chemicals, pharmaceuticals and IT • Like Bayer, Svarog has separate research for the seeds – own seed plant and trial plots help to choose the best varieties, treatment technologies and sowing time to achieve high yields Sustainable development • Svarog adheres sustainable development principles and non-GM as well as organic farming. Company certified 10 thd ha with Danube Soya to confirm the sustainability of its products. At the same time Svarog is doing its best to work efficiently, ecologically-friendly. preserve integrity of production and support local communities through different programs
R&D Industrial facilities
Investment Directions in 2015-2017 1. Improvement of technological effectiveness of the Company and products quality standards. 2. Increase of non-GMO soybean production. Improvement of technologies. Construction of processing facilities in EU. Processing of soybean with certain product line for consumers in EU.
3. Special (niche) crops production. Construction of processing facilities in Ukraine. Processing of products for the final consumer in the countries East ad Asia.
4. Production of quality milk and cattle meat (including beef) with its further processing and export in the CIS, UE and Eastern countries.
5. Development, improvement and production increase of modern agricultural machinery and equipment
for Ukrainian market by means of joint projects with European partners (2015 – modern multifunctional sowing machines, integrated with precision agriculture systems).
6. Development and improvement of IT projects for Ukrainian market («precision agriculture», «agricompany management in on-line mode»).
7. Development of «Green energy» and energy saving projects. 8. Production of baking mixes by means of joint programs with European manufacturers.
About Svarog West Group Corporation: PRODUCTION – PROCESSING – TRADING The most efficient and highly technological company of Western Ukraine. Leader of Ukrainian market in terms of agriproduction.
Business directions:
Participants and key positions:
• Crop production (land bank 80,000 ha): grain, legume, oil and special (niche) crops • Dairy and meat livestock farming • Fruit and juices production • Processing: sugar, flour • Seed production: modern seed plant, processing and sales of seeds • Modern storage: elevators and controlled atmosphere fruit storages • IT developments: agricompany management system in on-line mode by means of complete automation of production processes and precision agriculture • «Green energy» and bio-production projects • Modern agricultural machinery and equipment production
• International Chamber of Commerce (ICC) • Ukrainian Club of Agri Business (UCAB) • European Association «Danube Soya»
Website www.svarog-agro.com
WELCOME TO COOPERATION!