Restoring The Bread Basket of Europe

panies in Ukraine, where innovative IT-solutions play an important part. We have also during the last years, even during the crisis, expanded rapidly, still maintaining our margins and the strict control. Our goal is to expand further in the regions where we are active and continue developing and improving the company into one of the leading agricultural companies in Ukraine and the CIS. We will continue to invest into more modern machinery, drying and storage facilities and into good competent co-workers.

I am confident in the development of our company, as well as the Ukrainian agricultural sector as a whole and I look forward to the challenges in the years to come.

Introduction by the PresidentMuch had changed when I star-ted out in the Ukrainian agricul-tural sector. Still I recognized the true potential of the rich and fertile Ukrainian soils. Ukraine has historically been the bread basket of Europe and we want to be apart of the process in resto-

ring the country to this status. I am convinced that with the right competence, strive, courage, technology and control great riches could be collected from the vast Ukrainian fields. People tend to maybe over emphasize the Ukrainian soils, I would instead also like to remem-ber the Ukrainian people and the talent and competence that lies there. During my years we have managed to attract and create a strong management team.

I am proud when I say that the core of our company has already 11 years history of successful farming. During the last years the company has developed rapidly and we are today one of the most modern agricultural com-

Alex OronovCEO

About Grain Alliance Grain Alliance is modern farm operator in Ukraine, which controls approximately 40 000 hectares, of which 35,000 hectares are cultivated, in four regions; Kyiv, Cherkassy, Poltava and Chernigiv, the operations concentrated to an area within a radius of approxima-tely 80 kilometers. The business is well-integrated with short distances to the fields and storage facilities. Grain Alliance has five grain elevators, three of which have rail road access.

The core of Grain Alliance has over 10 years of suc-cessful farming, achieving yields in important crops like corn, sunflower and wheat above the Ukrainian average. In 2008, the Ukrainian/American management team joined forces with a Swedish team of entrepre-neurs as a result of this a Swedish holding company was formed into which capital was added enabling a more rapid development of the company. In conjunction

with this reorganization strong financial and organiza-tional expertise was added to the company and many parts of the existing organization were restructured and new modern financial management practices and more efficient agricultural practices were introduced. In addition, new agricultural equipment was added to the production process.

Today Grain Alliance operates on the basis of wes-tern European standards of accounting and corporate governance, e.g. accountability, transparency, fairness and simplicity with the goal of maximizing sharehol-der value while simultaneously adding value for all other stakeholders. These principles are followed to ensure that laws, regulations and ethical values are in compliance with internationally adopted principles and standards.

Business concept and strategy Grain Alliance’s business concept is to generate re-turns by increasing productivity and efficiency in the Ukrainian agriculture by implementing best agricul-tural practices, modern equipment and strict financial control.

Since launch Grain Alliance has created a solid organi-zation, which efficiently and sustainably can run a large scale agriculture operation. The long term goal is to increase the cultivated area and outperform western producers in terms of productivity. In order to reach these goals we focus on the following:  

• Sustainable agriculture – our production is orien-ted towards a long term perspective, therefore a balanced mix of crops are grown with an emphasis on crop alteration and soil recovery.

• A limited geographical area - Grain Alliance’s stra-tegy is to cultivate and operate in a concentrated geographical area. The radius between the farms

is approximately 80 km. By having farms in close proximity to each; machinery and equipment can be used more efficiently and the cost of transporting tractors, harvesters, between fields is lower. The drying and storage facilities can also efficiently service the existing farms.

• Financial management and internal control – Grain Alliance has developed a unique integrated finan-cial management information system, which is especially developed and adapted to the conditions of the agriculture sector in the Ukraine and CIS.

• Expansion, but not on the expense of productivity, efficiency and control – Despite the fact that Grain Alliance is expanding rapidly we expand only when we are sure that we can maintain or increase profi-tability from the start.

In order to maintain long term profitability Grain Al-liance runs a sustainable agriculture. The Company’s production is oriented towards a long term perspective, therefore a balanced mix of crops are grown with an emphasis on crop alteration and soil recovery.

Grain Alliance is also unique in Ukraine by having an in house laboratory, which monitors and measures the quality of the lands. In Ukraine there are only a handful of such laboratories.

By continuously analyzing the soil the agronomists scientifically know what kind of fertilizer to use and in which quantities. Grain Alliance can also in time react to problems such as increased acidity of the soil. This information is used in the long term production plan-ning process thus securing a long term sound usage of the soil and avoiding exhaustion.

Sustainable agriculture Moreover, producing crops usually involves regular plowing, tilling, that stirs up the. Plowing, tilling, is used to remove weeds, mix in soil amendments like fertilizers, shape the soil into rows and prepare the soil for seeding, yet this can make the soil too com-pact, loss of organic substances, loss of soil microbes, arthropods, and earthworms, and increased erosion. To avoid these unfavorable effects Grain Alliance uses the so called “no-till” method. The No-till approach reduces or excludes the use of conventional tillage. Regular tilling degrades the fertility of soils, causes air and water pollution, intensifies drought stress, leads to an increased fuel consumption and even contributes to global warming.

Geography of operationsIn order to maintain long term profitability Grain Al-liance runs a sustainable agriculture. The Company’s production is oriented towards a long term perspective, therefore a balanced mix of crops are grown with an emphasis on crop alteration and soil recovery.

Grain Alliance is also unique in Ukraine by having an in house laboratory, which monitors and measures the quality of the lands. In Ukraine there are only a handful of such laboratories.

By continuously analyzing the soil the agronomists scientifically know what kind of fertilizer to use and in which quantities. Grain Alliance can also in time react to problems such as increased acidity of the soil. More-over, this information is used in the long term produc-tion planning process thus securing a long term sound usage of the soil and avoiding exhaustion.

One central component in running an agriculture bu-siness is the ability to store the grain produced. Grain Alliance has five grain elevators in three regions. Three of the grain elevators have railroad access and Grain Alliance will continue to invest into storage facilities. The railroad access facilitates efficient logistics for the Company’s products.

Grain Alliance uses modern equipment, from produ-cers as John Deere, Claas, etcetera, directly imported

Drying, storage and equipmentfrom the U.S. and Europe. We also have several in-house service and repair shops. Grain Alliance is con-tinuously investing into new machinery and equipment. By adding modern technology and competence we are gradually increasing the productivity and the quality of the work performed.

CropsGrain Alliance’s mix of crops is determined by an over-all framework strategy developed by the Company’s agronomists based on scientific measured data. The allocation of crops is slightly altered from the fram-ework strategy based on forecasted outputs and developments on the international commodities mar-kets. The overall goal is to have a production mix that maximizes returns in a long term perspective and do not exhaust the land. Therefore Grain Alliance, in the crop planning, strives to retain the superior fertility of the Ukrainian soil and at the same time cultivate crops for which one could estimate the best prices. The strategy is to reduce sunflower and move more towards a rotation of corn, soybean, barley and milling wheat. Sunflower as a crop renders high prices, but at the same time wear out the soil. Soybean on the other hand, restores and enriches the soil. Land rotated from soybean demands less fertilizer. Demand for soybean is also increasing globally and price of soy-bean has, during the last decade gradually increased. Yet, soybean demands more precision in the cultiva-

tion process and thus requires investments into new more modern equipment. International experience also points towards the benefits of a crop rotation between soybean, corn and wheat/barley.

www.grainalliance.com

Grain Alliance - BZK Vasagatan 38

111 20 Stockholm Sweden

Grain Alliance - BZKTorfyana street 11Kiev regionUkraine