experience of a belgian investor in ukrainian market | vitamex

•The Vitamex group•Our presence in Ukraine•Logistics in Ukarine

SAFE & INNOVATIVE NUTRITION

Through nutritional knowledge and an innovation driven attitude, we create products that bring a high added value for our customers and ourselves. This is achieved by the outstanding technical performance of our products in animal nutrition.

Our growth strategy is built on two solid legs:

• Safe nutrition through innovation

• Presence in emerging markets

Mission & Strategy

Organisation

Presence in Emerging markets

Vitamex Ukraine Limited

99% Vitamex group1% Local management

Chv Korm

Joint Venture between Vitamex group and Theeuwes holding

50% Vitamex group ( Belgium)50% Theeuwes holding (Netherlands)

Presence in Ukraine : two companies

Vitamex Ukraine LimitedStart in 1997Employees: 20 office workers4 sales managers2 nutritionists2 veterinariansGeneral Director – Mr Yuri MalyarevskiTechnical Manager – Mr Valery Chobotov

Presence

Local production: Since 1999 Toll production: at first in Kiev institute of grains, since 2002 in Papelnja (Zhitomir region) Why ? Loss of the concentrate market because of ban of some raw materials in EC

Local production: Products: Mainly prestarters feeds for piglets and calves, concentrates and premixes for poultry, pigs and cattle. Feedadditives as Aromabiotic, Vitazym, mineral- and vitamin blends are imported from Belgium Advantage: cost efficient because of cheaper local labor and raw material sources

ToolsVeterinary and nutritional support

remain very important on farm level Propose business oriented solutions

and explain this to owners of pig and poultry farms

Constant training of own people

Chv Korm

“Theeuwes Holding”

and “Vitamex”

Organization Chart

Theeuwes Holding

Cehave Korm

Vitamex NV

Thegra Ukraine

50%50%100%

Processing ofoilseeds

Production of Concentrates +

PreStarters

High protein by products

Project P/planningCapacityLogisticsPersonnel

Building a state of the art production plant

Project P

All the permits to receive final building permission

Started June 2008

Multimix with two subcontractors

Finalising 25 August 2009

Planning

Multimix turn key project

Start building 17 Aug 2009

First production 1 Mrt 2010

Project P/planningCapacityLogisticsPersonnel

Production plant

Capacity set up

1000 Ton / month in 1 shift– 40 to 50 % raw materials via Hammer mill– 500 ton / month pellets– 500 ton / month premix & concentrates– 95 % bags & 5 % bulk / big bags– 10 % hand addition

Hammer mill

40 to 50 % raw materials=> 500 ton / month=> 25 ton / day=> 3.5 ton / hour

Pellet mill

500 ton in shift to 700 ton / month=> 500 ton / month=> 25 ton / day=> 3.5 ton / hour

Bagging installation

950 ton / month= 5.6 ton / hour5 ton / hour manualSecond bagging installation if needed

Project PCapacityLogisticsPersonnel

Content

Project P/planningCapacityLogisticsPersonnel

Production plant

Raw materials

P75%

5%

20%

75% Protein SH partner20% Aminoac / Ca/ P / Na loc5% specialties Belgium

RM inclusion purchaser storage

Protein/cereals 75% SH Partner Partner

AminoacidsCalcium 20% Local own warehousePhosphorSalt

specialties 5% Vitamex Bel own warehouse

Raw materials

Storage Raw materials

Storage End products

End products

P W

W

From warehouses

Gaysin: 450 m2

Kiev: 400 m2

Dnepr: 400 m2

Direct To warehouses

Logistics

Import

Transport Belgium Ukraine: 2 a 3 days (ca. 2300 euro/20 tonnes)Custom clearance: 2 days

1 week

Starting from June 2009 more strict

Special custom stockCustom clearance: 4-7 days

2 weeks

Conclusion: higher costs and longer time

Logistics

Inside Ukraine

Indirect to warehouses

From warehouses to clients

Delivery time < 5 days

5 tonnes/truck till 20 tonnes/truck

Depending on route and number of clients from 1000 uah/20 tonnes till 7000 uah/20 t

Availability of standard trucks no problem

Logistics

Documents Labels

Veterinarian Ukrainian languagePacking list info of importerCertificate of origin info of producerCertificate of quality expiry dateInvoice production date

category animal

NO nutritional info needed

Main challenge Veterinarian Certificate

Ukrainian norms differs from EU standardse.g.- Free of mycotoxins (which one ??)- Peroxide value

Logistics

Bottle neck:

Custom clearance of imported products

- Ukrainian norms differs from EU norms- Ukrainian veterinarian norms can differ from Ukrainian custom

norms- Very strict and very difficult cooperation

Project P/planningCapacityLogisticsPersonnel

Content

Personnel

Start 1 shift

1 Manager1 Quality2 Magazin4 Production2 Packing2 Administration/Accountant

Conclusion

– We consider Ukraine as one of the emerging markets for our business, the country is rich in raw materials and that’s where the needs are

– In our business logistics in the country is not a problem

– Legislation concerning transport and vetarinarian documentation is sometimes confusing

– Import administration has become very difficult