Annual
report
2022
About the Report
This Ros Agro PLC Annual Report for 2022 (the ‘Report’) contains information on the performance of Rusagro Group (the ‘Company’ or ‘Rusagro’) for the reporting period from 1 January 2022 to 31 December 2022. This Report is published annually, with the last edition released in April 2022.
Substantive topics
The Report incorporates information about Rusagro’s success in implementing our medium-term strategy, as well as information on the operational, financial, and non-financial performance of the Company’s business divisions.
Scope
The operating and financial performance of Ros Agro PLC (the parent company) and its subsidiaries, collectively referred to as Rusagro Group, are presented in the Report in accordance with consolidated financial statements under International Financial Reporting Standards (IFRS).
Standards
The Report has been prepared based on Rusagro’s management accounts and consolidated financial statements for 2022. The Company’s consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the International Accounting Standards Board.
During the preparation of the Report, the following requirements were taken into account:
- The London Stock Exchange’s listing rules
- The UK Financial Conduct Authority’s rules on disclosure and transparency
- The listing rules of the Moscow Exchange (MOEX)
Audit
The audit of the consolidated financial statements of Ros Agro PLC for 2022 in accordance with IFRS was conducted by KEPT.
Approval of the Report
This Report was provisionally approved by the Board of Directors of Ros Agro PLC on 3 March 2023.
Disclaimer
The Report contains statements of an estimated or forward-looking nature regarding production, financial, economic, social, environmental, and other indicators characterising Rusagro’s development. For various reasons, the events or results presented in subsequent reports may differ materially from those contained in the assumptions or forecasts herein, not least in connection with the changing market situation, as well as other risks directly related to Ros Agro PLC and its subsidiaries. The Company bears no responsibility for losses or damages that may be incurred by individuals and legal entities acting on the basis of forward-looking statements. In each particular case, such statements represent only one of many scenarios and should not be considered as the most probable.
In addition to official information concerning Rusagro’s activities, this Report contains data obtained from third parties and sources that Rusagro considers reliable. Nevertheless, the Company cannot guarantee the accuracy of such information, which may be incomplete or abridged.
Presentation of numerical data
The values and percentages presented in the various tables and graphs, as well as in the text of the Report, have been rounded to the nearest whole number or to the nearest decimal fraction, therefore the sum of the numbers may not precisely match the final total. Some percentages presented in tables and graphs, as well as in the text of the Report, are based on values that have not been rounded, and thus they may not precisely match the percentage data calculated on the basis of rounded figures.
History
The story of Rusagro begins in 1995 with the import of sugar into Russia.
Over time, the Company acquired a number of production facilities for sugar, as well as for oils and fats. It also acquired storage elevators and established its own land landing. In 2003, Rusagro Group LLC was founded. The Company’s development can be broken down into several key stages and events.
1997–2002
Launch of our Sugar and Agriculture businesses
We acquire our first sugar plants and launch sugar production in Belgorod Region
We establish our own land landing for the growing of sugar beet and grain crops
We acquire elevators for storing and trading grain
2003–2007
Launch of our Oil and Fats Business and our first retail brand
Rusagro Group LLC is founded in 2003
We launch our first retail sugar brand, Chaikofsky
We acquire our first oils and fats production facility in Yekaterinburg
2008–2010
Launch of our Meat Business and expansion of our Sugar Business
We expand our Sugar Business by acquiring two sugar plants in Belgorod and Tambov regions
Our Mon Cafe and Brauni sugar brands are launched
We increase our land landing to 380 ths ha
Pork production commences in Belgorod Region
2011–2013
Initial public offering (IPO) and purchase of our first oil extraction plant
An IPO of global depository receipts (GDRs) on the London Stock Exchange in 2011 raises USD 300 mn
A dividend policy is adopted
A new packaging line enters service and our Russkii Sakhar brand is launched
We increase our land landing to 463 ths ha
In 2011, we acquire an oil extraction plant in Samara Region
In 2013, we open pig farms in Tambov Region
2014–2015
Flotation on the Moscow Stock Exchange and the launch of abattoir operations
In 2014, the Company floats GDRs on the Moscow Stock Exchange
We modernise our sugar plants and increase the capacity of our pulp drying complexes
We increase our land landing to 504 ths ha
We modernise our oil extraction plant
Launching a slaughterhouse in the Tambov Region in 2015
2016–2017
Business deal concluded with Razgulyay, secondary public offering (SPO)
An SPO of GDRs on the London Stock Exchange in 2016 raises USD 250 mn
Three sugar plants in Kursk and Orel regions, a cereal plant, and a land landing are acquired from Razgulyay
We launch our first molasses desugarisation plant
Our land landing reaches a total of 665 ths ha
Our first retail meat brand, Slovo Myasnika, is launched in 2016
2018–2020
Business expansion and increase in exports
In 2020, the Company’s GDRs are included in the MSCI Russia Small Cap index
Our second molasses desugarisation plant is launched in 2019
Our sugar production is exported to 34 countries worldwide
Our agricultural production is exported to 11 countries worldwide. We deliver our first shipments of corn and soya to China
In 2018, we gain the right to acquire a controlling stake in the Company which owns Solnechnye Produkty
We launch a vegetable oil production and bottling plant in Samara Region and a mayonnaise production facility in Atkarsk
Our oils and fats are exported to 29 countries worldwide. We see the first shipments of meal and the resumption of consumer margarine sales to China
We acquire a 100% stake in KapitalAgro in 2018 and a 22.5% stake in Agro-Belogorye Group in 2019 – both pork producers in Belgorod Region
We complete construction of a grain elevator and begin delivering sows to a pig breeding farm in Primorsky Territory
Our pork products is exported to ten countries worldwide
The Molochnye Produkty business unit, producing cheeses, butter, and dried whey, is launched in 2018
We make our first deliveries of dried whey to China
2021
An SPO of GDRs in Ros Agro PLC is made by the majority shareholder
The contract for Maxim Basov, CEO of Rusagro Group since 2009, expires
The Rusagro Tech Challenge, a competition for innovative projects, takes place
The first shipment of pulp is sent by rail to China
Znamensky Sakharny Zavod is certified for the production of organic sugar
We take on a 12-month lease of 49 ths ha of farmland in Saratov Region
Bottled sunflower oil is supplied to retail chains in China, and a butter and mayonnaise shop opens on an online marketplace
The Company wins the Agro-industrial Exporter of the Year award
The Company is the leading supplier of frying oil to the Russian HoReCa sector
We acquire a further 25% stake in Primorskaya Soya LLC to consolidate 100% ownership of the Company
The Rusagro-Primorye compound feed plant is launched during the Eastern Economic Forum
The Rusagro-Primorye LLC plant for rendering and waste utilization plant
Molochnye Produkty is merged with our Oil and Fats Business
Highlights of 2022
january
Corporate governance
Rusagro Group LLC appoints new CEO
Effective 1 January 2022, Timur Lipatov was appointed as CEO of Rusagro Group LLC. His biography details can be found in the Corporate Governance section.
january
Production
Sugar production certified organic
Znamensky Sakharny Zavod has undergone an independent audit under the voluntary certification system of the National Union of Producers and Consumers of Organic Products, and has been granted a certificate confirming that the quality of sugar produced under the Chaikofsky brand complies with the state organic standard GOST 33980. It is the first plant in Russia to receive such a certificate.
february
Sales
Healthy sugar products enter production
In an effort to encourage healthy diets, Rusagro’s Sugar Business has commenced production of coconut sugar. The product has a delicate texture, a pronounced flavour, and a flowery aroma. It contains micronutrients and fibre, and has a glycaemic index lower than ordinary white sugar.
april
Corporate governance
New Head of Oil and Fats Business appointed
In April 2022, Natalia Koroy was appointed as Head of Rusagro’s Oil and Fats Business. Natalia had been earmarked to take on this position for the past two years. Her biography details can be found in the Corporate Governance section.
april
Corporate governance
New Head of Meat Business appointed
In April 2022, Alexey Kirsanov was appointed as Executive Director of Rusagro’s Meat Business, and was subsequently promoted to the position of CEO. His biography details can be found in the Corporate Governance section.
april
Corporate governance
New Head of Sugar Business appointed
In April 2022, Sergey Goryachev was appointed as Head of Rusagro’s Sugar Business. His biography details can be found in the Corporate Governance section.
june
Sales
Online sugar shop launched on Ozon
In June 2022, Rusagro commenced direct sales of its produce on the Ozon internet platform for the first time ever. The online shop features a range of 25 different products from Rusagro’s Sugar Business, under the brands Chaikofsky, Russkii Sakhar, Tyoplye Traditsii, and Brauni.
june
Corporate governance
Rusagro Group LLC appoints new CFO
In June 2022, Alexander Tarasov was appointed as Chief Financial Officer of Rusagro Group LLC. His biography details can be found in the Corporate Governance section.
august
Production
Experimental planting of triticale
During the 2022–2023 sowing season, Rusagro planted 1 ths hectares with the triticale fodder crop, a highly productive hybrid of wheat and rye characterised by high yield, frost hardiness, and low soil fertility requirements.
august
Sales
First shipment of sunflower meal to China
For the first time ever in Russia, Rusagro delivered sunflower meal to China via the Far East region, with direct transshipment at the port of Vladivostok from train to bulk carrier. The project was implemented in cooperation with FESCO Transportation Group as part of a memorandum of cooperation signed at the Eastern Economic Forum in 2021.
august
Sales
Rusagro-Primorye successfully passes product quality and safety inspection by Mars
Rusagro’s meat processing plant in Primorsky Territory successfully passed a client audit by international Company Mars. The auditors noted the team’s high level of professionalism and were impressed by the level of organisation of the quality management system and the high-tech infrastructure.
september
Sales
Oil and Fats Business receives Exporter of the Year awards
In September 2022, Rusagro’s Oil and Fats Business was recognised in two categories of the prestigious All-Russian Exporter of the Year awards. Natalia Koroy, the head of the business, won the Best Female Exporter award, and Zhirovoy Kombinat took third place in the Exporter of the Year nomination for basic agricultural products in the Big Business category.
october
Technology
Smart harvest planning system launched
Rusagro has collaborated with IT Company Jet Infosystems to develop a smart harvest planning system. The system helps to optimise harvesting operations and eliminate crop spoilage as a result of poorly timed harvesting, and ensures the optimal use of agricultural machinery and specialist labour.
october
Technology
KulibIT 2022 prize for digitalisation
In October 2022, the Industrial Fats CRM project by the Rusagro Technologies project group took first place in the Import Independence category of the KulibIT 2022 National Digitalisation Awards. The award was created to promote advanced Russian digital technologies and solutions, as well as talented leaders.
november
Production
First shipment of mayonnaise to China
In 2022, Rusagro delivered its very first shipment of mayonnaise to China. This was made possible thanks to the use of packaging with enhanced protective properties, as well as the development of a special recipe for mayonnaise which can be stored at temperatures of up to 25 °C for a year.
november
Technology
Rusagro joins AI Alliance
In November 2022, Rusagro took part in the major international Artificial Intelligence Journey conference. During the conference, the Company signed a memorandum on joining the AI Alliance and adhering to the AI Ethics Code.
november
HR
RBK rating puts Rusagro among Russia’s top employers
In November 2022, RBK presented its own ranking of Russian employers for the first time ever. Rusagro was the only listed Company representing the agricultural sector. Previously, the Company has also held leading positions in HR rankings compiled by HeadHunter, Superjob, and the Randstad Award.
november
HR
First prize in the Best Corporate Teambuilding category at the 2022 Arcorps Awards
In November 2022, the Rusagro Chestnye Igry (Fair Games) sports festival took first place in the Best Corporate Teambuilding category as part of the inaugural Arcorps Awards 2022 national prize for corporate sport, organised by the Association for the Development of Corporate Sport.
december
Technology
Electronic system launched to monitor site visits
In our Meat Business, we have introduced an electronic system for monitoring visits to BioSCUD sites. The system increases biosafety control at production facilities in Tambov Region by eliminating the use of paper cards for employee access and switching to automatic monitoring in real time.
Key results of 2022
Rusagro is one of the largest vertically integrated agricultural holdings in Russia.
The Company accounts for a significant share of the domestic production of pork, sugar, agricultural products, and oils and fats. According to the final data for 2022, the number of Company employees averaged 19.8 ths people, and total revenue after inter-segment eliminations and other income was RUB 240.2 billion.
Agriculture
segment
Sales indicators
Financial indicators
