2. Entering new Company,
I often face a paradigm
Decisions were
determined on base
of logic and facts
I could see
another facts
And basing on the same logic
come to
another decisions
3. Strategic goal of agro leader was to enter
new commodity markets
founded in 1994
$1 bln revenue
15.000 employees
40 plants and silos
Razgulay company
4. We all know what beer is:
Malt Water Yeast Hop
+ + +
8. 32
Malting process
1
Grains are dried, and the
result is called malt
Barley contains starch Grains are sprouted, the
starch turns into sugar, which
gives extract to mash
9. Even before the project started
I analized the market …
Spot market, MALT
Seed program, BARLEY
Spot market, BARLEY
Others
…. and segmented the players into
Huge multinational companies, local brewers, and independent
malt -houses
Users of malt or barley
10. On the concepts of the Company and common sense I did not
rush into small breweries and independent malt-houses
Non transparent tenders
Credit risks
Small delivery lot
11. And it was difficult to sell
to multinational brewers …
Difficult to meet decision maker
I was not professional enough in
malt
Specifications, which I did not
understand
And then I started to learn more
about the market from the clients
and industrial organizations
12. That's what I did not know
coming into the market
To contract To buy To supply
It’s not enough to contract, you also need to buy the product
It is difficult to determine the quality when you buy commodity
Malting barley requires totally different rework and storage
All the crop is bought in September - October
Different sorts cannot be mixed together, 2 + 2 ≠ 4
13. Why in barley 7 + 15 = 5 ?
Malting cycle is the time of sprouting the barley
Only germinated grain turns starch into sugar
Barley with 2 weeks malting cycle costs 7 rur/kilo, with 1 week - already 15
rur/kilo – because malt-house capacity doubles
If you mix these two barleys, you get less sugar than from each
components, but malting cycle is the same
+7 Rur/kilo = 5 Rur/Kilo15 Rur/Kilo
14. My competitors in purchasing were in
different «weight categories»
The major land owner provided new
market for brewers
Close relationships with farmers allowed
me to work even more effectively than
brewers
Money of leading trader allowed me to
pay farmers for the crop in advance
15. Half of success – to persuade management
Largest brewers instead of ExWorks
and prepayment wanted CPT and credit
Silos needed to be re-equiped
for barley technology process
Changes concerned also field work
Brewers wanted transparent relation-
ships, including certification of silos
16. We sold all we had contracted
Seed programs worked
We entered spot market
Silos were certified
Razgulay was positioned
as loyal and responsible supplier
Operating profit of the first year
was positive and above the target
