Fast growing Russian Sea Group to gross in excess of 600 million USD

October 1, 2007 12:07

Founded in 1997 the Russian Sea Group of Companies has become an undisputed leader on the Russian seafood market in terms of its wide coverage of various segments, production output, sales volumes and implemented technologies.

In 2006 the Group's turnover amounted to 350 million USD and its earnings before interest, depreciation and amortization (EBITDA) totaled 29 million USD. In the year 2007 the Group's turnover and EBITDA are forecasted to grow to 600-620 million USD and 60 million USD correspondingly.

The Russian Sea Group of Companies has made it a target to produce healthy seafood for the consumer to enjoy and it strives for winning and maintaining leading positions in every market niche where it is operating or which it is planning to enter.

At the initial phase of operation the Group majored mostly in importation of freshfrozen fish, while later serious diversification followed. At present the Group's activities are concentrated in three directions: wholesale trade in finfish and shellfish/mollusks, manufacture of seafood products for end consumers from purchased raw material and fish farming.

Much attention inside the Russian Sea Group is paid to construction of an efficient structure of business management. In the year 2007 the Group in cooperation with Deloitte is completing a joint project on the reengineering of the business processes. Within the framework of the project's implementation the Group has been changing its organizational and management structure. Simultaneously, the Group has been introducing the ERP-system Microsoft Dynamics AX aimed at supporting the new model of operating activity and obtaining the necessary information when making management decisions.

The Russian Sea Group of Companies has also been increasing the level of transparency and publicity of its activities. In June 2007 one of companies of the Group, JSC Russian Sea, placed its debut bonded debt of 2 billion RUR at MICEX stock exchange (Moscow Interbank Currency Exchange). In November 2007 the Russian Sea Group of Companies will for the first time produce consolidated accounts in compliance with the International Financial Reporting Standards (IFRS) and the business will be audited.

The Russian Sea Group of Companies is now headed by Chairman of the Board Maxim Vorobyov.

Each of the Group's companies has got its own profile inside one of the priority directions:

ZAO Russian Fish Company (closed JSC)

Established in 1997 ZAO Russian Fish Company is Russia's largest trader of freshfrozen and chilled seafood. The company is engaged in importation and distribution of salmon species (Atlantic salmon, trout), pelagic fish (mackerel, herring), bottomfish and non-finfish marine products. The company has won a share of ca.7% of the Russian seafood market while contributing 70% to the proceeds of the Russian Sea Group. The company has been sourcing products from countries based on all the continents, but for Australia. Direct contracts have been signed with the largest world and Russian producers.

Wide geography of the company's product sales has been achieved thanks to its branchy dealer network and 23 own offices in the largest cities of Russia. By the end of 2007 the company's affiliates are to grow to 60 in number. The main part of purchased products is sold to out-of-house buyers: wholesale traders, processing companies, retail chains and HORECA sector. Some 10-15% of the company's raw fish is delivered to JSC Russian Sea for processing.

ZAO Russian Fish Company is headed by General Director Dmitry Dangauer.

ZAO Russian Sea (closed JSC)

ZAO Russian Sea was established in 1997 and until 2004 it was called ZAO BogorodskRYBA. The "Russian Sea" label was registered in 1999.

Russian Sea specializes in production of ready-to-eat range including marinated preserves from herring, shellfish/mollusks, mackerel and Baltic sprat, delicatessen products from salmon species, caviar products from salmon and other fishes, spreads, etc.

In May 2007 construction of a new production building took off at the company's premises in Noginsk near Moscow. The new facility is to be commissioned in late 2007 - early 2008. Apart from the company's main dynamically expanding production complex, a proportion of its branded range is partly produced at contracted plants located in Moscow region, Kaliningrad and in the Russian Far East. The company generates 30% of the Group's total proceeds.

The company's main label is TM Russian Sea. Besides, Russian Sea is the umbrella label for a number of sublabels such as Selyodochka Stolichnaya, Bochkovaya Seld, Islandka, Red Ball, Ikryanoy Bochonok, Zolotaya Liniya (Golden Line), Mediterrana and Umaisagi.

Close cooperation inside the Russian Sea Group has been playing an important role in the company's production cycle. The bulk of its raw fish is supplied by Russian Fish Company thus securing stability of shipments, high quality of the raw fish and the level of purchasing prices in accordance with the market.

The Russian Federation is the main market for the company with the product range shipped to more than 50 regions of the country. Besides, Russian Sea TM products are realized in other CIS countries, Europe and America.

The company's distribution network includes 2 affiliates, one in Saint Petersburg and one in Noginsk, and dealer representative offices.

ZAO Russian Sea is headed by General Director Svetlana Fedoseyeva.

OOO Russian Sea-Kaliningrad (ltd)

OOO Russian Sea-Kaliningrad is the second division engaged in fish processing within the Russian Sea Group. The company produces some of the Russian Sea labelled range of the medium and lower than medium price segments under the sublabels of Sem Uzlov (7 Knots), Seld Mirovaya (Top Herring) and Madam Skumbriel.

OOO Russian Sea-Kaliningrad is headed by Acting General Director O.A. Zakonov.

OOO Russian Sea - Aquaculture (ltd)

Within the guidelines of its long-term development strategy in 2007 the Russian Sea Group has launched a project of breeding various fish species in Russia. The project provides for rainbow trout and Atlantic salmon farming in the nation's Northwest Federal District (Republic of Karelia, Arkhangelsk and Vologda regions) and river trout farming in Krasnodarsky Krai Territory in the south of Russia.

Within the framework of the project in spring 2007 OOO Trout Farm Segozerskoye (ltd) has been acquired to form the basis for construction of a new up-to-date fish farming complex and a smolt hatchery.

OOO Russian Sea - Aquaculture is headed by General Director Oleg Beginin.

OOO Russian Sea Management Company (ltd)

OOO Russian Sea Management Company was established in 2006 as part of restructuring of management of the Russian Sea Group of Companies in order to consolidate a number of the functional areas across all the Group's member companies, the areas including finances, logistics, personnel and legal services, IT divisions, etc. In fact, thanks to this link the Group has been operating as a single whole.

The management company has been keeping consolidated accounts of the Group according to the international financial reporting standards. In November 2007 the Group's IFRS accounts for the fiscal year 2006 will be audited by Ernst and Young Company and the results of the audit will be made public afterwards.

OOO Russian Sea Management Company is headed by General Director Dmitry Denezhkin.

Contact details:

Head Office
10 Aviamotornaya str., bld. 2
111024 Moscow
Tel.: +7 (495) 648-90-50
Fax: +7 (495) 648-90-51

Station Zakharovo
142403 Noginsk
Moscow region
Tel.: +7(495) 789-89-60
Fax: +7 (495) 775-41-58

Logistic Centre
Station Zakharovo
Betonnaya str. 4
142403 Noginsk
Moscow region
Tel.: +7(495) 797-67-91
Fax: +7 (495) 797-67-92

Russian Sea Delivery (RF regions, CIS)
10 Aviamotornaya str., bld. 2
1111024 Moscow
Tel.: +7 (495) 648-90-50
Fax: +7 (495) 648-90-51

Russian Sea Delivery (Moscow, Retail Chains)
Amurskaya str. 2
107553 Moscow
Tel.: +7 (495) 589-19-80

Russian Sea Delivery (St. Petersburg)
Nevelskaya str. 7
198035 St. Petersburg
Tel.: +7 (812) 495-89-56, 495-89-49
Fax: +7 (812) 495-89-56

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