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Increasing Ukrainian Agricultural M_A Investments

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Increasing Ukrainian Agricultural M_A Investments Powered By Docstoc
					Increase in ag investments through M&A




     Bohdan Chomiak , UkrAgroConsult
Global Trends
                            Global Trends

                    1.3%
                                     GLOBAL M&A SECTOR BREAKDOWN YTD Value
                 3.4%
             2.2%            12.7%
          2.9%
       2.5%

8.1%                                                         Industrials & Chemicals
                                        9.1%
                                                             Financial Services
                                                             TMT
                                                             Consumer
                                                             Business Services
                                            11.9%
                                                             Energy, Mining & Utitlities
                                                             Pharma, Miedical & Biotech
                                                             Leisure
29.2%
                                     8.8%                    Construction
                                                             Transportation
                           8.0%                              Real Estate
                                                             Agriculture



                                                     SOURCE:  MERRILL CORPORATION
                               Global Trends

                        1.0%   GLOBAL M&A SECTOR BREAKDOWN YTD 2012 Volume
                   3.1%2.1%
            3.4%
         3.6%                       21.2%


  7.2%                                                      Industrials & Chemicals
                                                            Financial Services
                                                            TMT
                                                            Consumer
                                                            Business Services
9.3%                                         8.5%           Energy, Mining & Utitlities
                                                            Pharma, Miedical & Biotech
                                                            Leisure
                                                            Construction
                                                            Transportation
                                                            Real Estate
   11.2%                                                    Agriculture
                                     15.5%


                     13.7%




                                                    SOURCE:  MERRILL CORPORATION
                                Global Trends




Ernst & Young Q3 2012 update indicates that total deals had fallen to 165 and value fell to $24 Billion 
Global Trends
                                                Global Trends
                                                            DEAL VALUE $B
180


160


140


120


100


 80                                                                                                                     DEAL VALUE $B

 60


 40


 20


 0
      1Q    2Q    3Q     4Q   1Q    2Q    3Q    4Q    1Q    2Q     3Q    4Q    1Q    2Q    3Q    4Q    1Q     2Q    SOURCE:  DEALLOGIC
                                                                                                                    3Q 

                  2008                                      2009                                       2010                              2011



Euro-Denominated Corporate IG Volume:  This chart shows the number of deals and the 
volume in USD billions for Euro-denominated corporate IG bonds from the 1st quarter of 
2008 up to and including the 3rd quarter of 2012.
                      Ukraine – The Dark Side
                                       Month over Month Change in Reserves 
                                       $BN
Overnight Cost of Money 
%
31.10.2012      Buy       Sell
 O/N                 35         46
 1W               36.75       47.5
 2W                  37      48.25
 1M               35.25         43
 SOURCE:  NBU                                                       SOURCE:  NBU

                           Commercial Bank Performance
                   01.01.2008 01.01.2009 01.01.2010 01.01.2011 01.01.2012 01.10.2012
Return on assets,          1.5       1.03      -4.38      -1.45      -0.76       0.34
%
Return on equity,        12.67       8.51     -32.52     -10.19      -5.27       2.32
%
Credit growth %           71%        74%         0%         1%         9%         1%
SOURCE:  NBU
                            Ukraine – Goes with the Force
  Agriculture – Grows            Economy - Crawls

                                                  Ukraine GDP 1990 = 100%
                                        90.0%

                                        80.0%

                                        70.0%

                                        60.0%

                                        50.0%

                                                                                   Ukraine GDP
                                        40.0%

                                        30.0%

                                        20.0%

                                        10.0%

                                        0.0%
                                                1991   2005   2008   2009   2010



SOURCE:  STATE STATISTICS COMMITTEE   SOURCE:  STATE STATISTICS COMMITTEE
                                       Ukraine – Key Growth Drivers

           Proit, Loss (-) Million UAH
   25000

   20000                                     19926

   15000
                                     12750
   10000                                             Proit, Loss (-)
                              7120
   5000                 5462.1

                      1253.2
      0        -121.4
           2000 2005 2008 2009 2010 2011
   -5000




● Equity Offerings to June 2011 - $1.5 billion
● Debt – Corporate Bonds and Borrowings - $3.5 billion

                                THE PRIMARY DRIVER IS PROFIT
Ukraine – Use of Funds
                Ukraine – Investment Impact

Growth of labor productivity
                                     1990 = 100%




TOTAL
CROP PRODUCTION
ANIMAL PRODUCTION
                  Ukraine – Investment Impact

Creation of Global Competitors

                    Farms for Young      Farms Laying 
   Hatchery                                                Retail Chains
                      Laying Hens           Hens
                                                           Branded Points of Sale

                                                           Wholesale

                                                           Export


                                          Egg 
  Breeder Farm                         Processing 
                       Feed Mill
                                          Plant             Direct Sales

                                                            Export


                                        Sunflower Seed 
  Grain Storage
      Facility                             Crushing
                                                          Quality Cold Pressed 
                                                          Oil (B2B)

                                                          Heating Fuel
  Ukraine – Two Jeddai Knights




MERGER         ACQUISTION 
MASTER           MASTER
   Ukraine - Merger and Acquisition Opportunity

Pork Sector
Kyiv – 20% of 
Ukraine’s Total 
Consumption
No dominant 
player
               Ukraine – Merger and Acquisition or
                         COOPERATION
Small- and midsized               5-STEP
                                STRATEGY                          5.Leading            Absolute leader producer
farmers can gain access 
                                                                international          of agricultural
to modern and efficient                                                                commodities in Ukraine
                                                                agro company
agricultural machinery,                                                                and CIS
EU know-how , 
infrastructure (including                                                      4. II consolidation stage to boost
                                                                                   total land bank up to 500-1,000
storage and port facilities) 
                                                                                   th. ha.
and better margins  by                                                         (small farms and leading farms
simply Co-operating.                                                           [<25 th. ha. & >75 th. ha.])
                                                                           3. Invest into logistical capability
                                                                           (Elevators, Port facility etc)
                                                                     2. I consolidation stage - up to 300 th. ha.
                                                                     (mid sized farms [25-75 th. ha. each])
                                                           1. Create and lead first agricultural Co-op

                                Source:   Lapersa vision
                                  UkrAgroConsult offers:
                          Crop forecasts, agricultural markets, pricing
              S&D of grains and oilseeds in the Black Sea Region and worldwide
                                     Export/ import statistics
Agricultural market researches (cereals, oilseeds, meat, sugar, elevators, seeds, logistics, etc.)
                   Daily and weekly newsletters for agricultural professionals
              Analysis of trends in capitalization of Ukrainian agricultural holdings
                              Investment and consulting services 




                      Office 5, Timoshenko Str. 29- V, 04205, Kyiv, Ukraine 
                           Tel/Fax: +380 44 451 46 34 (multi-channel) 
                                    agro@ukragroconsult.org

				
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posted:7/22/2013
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