Wholesale and Distribution Manufacturing Center “ Yuzhny ” Rostov Oblast

1. Wholesale and Distribution Manufacturing Center “Yuzhny” Rostov Oblast

2. S ummary • ThesuggestedconceptofWholesaleandDistributionManufacturingCenter“Yuzhny”(hereinafterAgroIndustrialpark) isbasedontheideaofallocationofseveralenterprisesonasinglesite, intergrationofagriculturalmanufacturersaccordingtotheprincipleofcooperation, whoareintendedtoworkundercommonmanagementandtrademark. Thenetworkofenterprisesshouldbecontrolledbysinglemanagingcompanythatwillallowforagreedmarketattitudeandsynergyofseparateindustries; • AgroIndustrialparksoccupyoneofthefewsparenichesofRussianeconomy: • Suggestedconceptofagro-industrialparksisbasedonworldexperienceoffarmers' cooperation. Thus, forexample, acooperativeArlanumbers~ 8 thousandmembers, hasaturnoverof 6.6 billioneuros; Valio numbers ~ 10 thousand members, hasaturnoverof 1.8 billion euro. InRussia, suchformsofcooperationarealmostabsent; • Atpresent, theprocessofconstructionofagriculturalandindustrialparksisdevelopingunsystematicallyinRussia, besideswearelaggingsignificantlybehindothercountriesof «newEurope» inquantityofsuchparks. Intotal, around 30 industrialandagriculturalparksarecreatedandfunctioninginRussia, and, forexample, inPolandtherearemorethan 60 ofthem; • Leadersofmilkindustry (Wimm-Bill-Dann, Unimilk) havebeenrecentlyboughtoutbyinternationalcompaniesandarecurrentlyreconsideringtheirstretagyanddevelopmentperspectives. Asaconsequence, theydonottargetaggresivegrowthgoal. Meatandespeciallyvegetableindustriesarepoorlyconsolidated. • WholesaleandDistributionManufacturingCenter“Yuzhny”(Agro-industrialpark) impliestheformatofbusinessofmaximumflexibilitywhenthecompositionofindustriesisdeterminedbypossibilitiesandneedsoftheregionaswellasbyeconomicexpedience; • Withintheframeworkoftheprocessofpreparationforprojectimplementation, theanalysisofanumberofregionshasbeenperformed, preliminarynegotiationshavebeenheld, whichidentifiedtheinterestsofregionalauthorities. Alsothecircleofpotentialsuppliersoffutureagro-industrialparksequipmentandengineeringsolutionshasbeenidentified, preliminaryfinancialcalculationshavebeenmade. AVatary management corp.2

3. P roject Organization AVatary management corp.3

4. C Wholesale and retail trade Fish processing and canning; Processing and canning of fruits and vegetables, including potatos; Processing of meat, including slaughter facilities and meat products manufacturing; Milk products; Products of milling industry; Starch and starch products; Feed for livestock; Bakery and confectionery products; Pasta, cuscus and similar products Drinks, juices, nectars, fruit-drinks, pouring water into bottles; Other: malt and malt drinks, coffee, tea, vinegar, spices and flavoring and other. Ready meals and semi-finished goods for public and social nutrition; Warehouse and warehouse-freezer services; Renting the industrial premises and infrastructure services omposition of industries of each agro-industrial park is compiled of standard industries and technological solutions in accordance with the needs of region, agricultural products manufacturers and opportunities of sales Options of industries and services included into agro-industrial park Related industries which may be included into agro-industrial park: AVatary management corp.4

5. S ite for Pilot Project: Rostov Oblast Rostov On Don AVatary management corp.5

6. F oreign companies, which were chosen as potential suppliers of equipment to agro-industrial parks, are ready to organize production in Russia and to share technologies When developing equipment production, the use of Russian construction sites and technology transfer by industry leaders will efficiently conjoin AVatary management corp.7

7. C alculation example: investments in production of module slaughter facility and primary processing of cattle meat and pork will amount to 100-550 million rubles depending on capacity Meat Processing Plant (Slaughter Facility and Primary Processing): • Laboratory • Suspended transportation • Working tools, auxiliary equipment The structure of any project may be adapted to match the needs of particular agro-industrial park AVatary management corp.8

8. C alculation example: investments in storage and processing of vegetables will amount to 150 - 450 million rubles with processing capacity of 5 - 30 thousand tons per year Processing of vegetables: AVatary management corp.9

9. C Investments include: alculation example: investments in project on processing and storage of grain crops will amount to 100 - 350 million rubles with annual volume of output of 10 - 50 thousand tons • Milling, elevator equipment • grinder, mixers, dosing systems • weighing, transporting and packaging equipment The structure of any project may be adapted to match the needs of particular agro-industrial park AVatary management corp.10

10. К ey parameters of Wholesale and Distribution Manufacturing Center “Yuzhny” Total volume of investments: 2,370 million rubles, payback period: 3.6 years AVatary management corp.11

11. C ontact Information Rostov-on-Don 344019 Sholokhova street, house 27/82 phone: 8 (8632) 29-07-06 Moscow 119049 Krymsky Val, 3, build. 2 Office 513 phone: + 7 (985) 765 96 48 AVatary management corp.12