STORAGE & PROCESSING 

     The Group owns and operates significant storage capacity situated in close proximity to its operations. The Group only utilizes its own storage facilities. As at December 31, 2010, the Group owned and operated two concrete vertical bulk grain and oilseed silos with aggregate storage capacity of 155,000 tonnes, with one silo located in Chernihiv with storage capacity of 100,000 tonnes and the second silo located in Poltava with storage capacity of 55,000 tonnes. 

     Having such storage capacity allows the Group to sell its crop production throughout the marketing season to reduce a negative impact of crop pressure on prices at harvest time and at the same time mitigate risks related to physical security of agri produce.

     The Group’s silos are equipped with modern crop cleaning and drying equipment and have high-capacity crop loading and unloading systems.    The Group’s silos satisfy 100% of the Group’s storage needs with sufficient capacity to meet its projected increased production in the short-term. The Group seeks to maintain sufficient storage capacity to enable it to store a portion of its harvested crops for longer periods of time so as to enhance its ability to sell such crops at a time of its preference, control product quality and reduce third-party risks during delivery of its products.

     The Group also owns and operates specifically designed potato storage capacity of 10,000 tonnes, which is equipped with modern climate control system.  

    The Group leases excess storage capacity to third parties.

    The Group also has grain mills situated in its storage facilities, which it uses to produce flour for third parties.  Until 2010, the Group produced its own flour, however, due to market conditions, the Group has discontinued processing its own flour and now it leases flour-processing capacity in its mill to third parties.

STORAGE AND PRODUCTION CAPACITY OF GRAIN ELEVATORS AND MILLS

Note:  The actual capacity depends on volumes of ordered products.