укрспирт

COMPETITIVE BID REGARDING THE STRATEGIC
DEVELOPMENT PLAN FOR THE STATE ENTERPRISE
“UKRSPYRT” FOR THE MEDIUM TERM
Acting Director of the SE “Ukrspyrt”
Roman Ivaniuk
August 19, 2015

CURRENT ORGANIZATIONAL CHART
1
• Headquarters
• Licenses for manufacturing and realization of the
alcohol, raw alcohol, technical alcohol, bioethanol
• 41 places of activity (PA), including:
- 39 for alcohol manufacturing
- 2 for bioethanol manufacturing
State Enterprise “Ukrspyrt” Concern “Ukrspyrt”
• 41 manufacturing companies (separate entities)
• Licenses for manufacturing only
• The realization of the products through the SE
“Ukrspyrt” under a commission agreement
• The majority of companies in the process under
bankruptsy
27.3
4.0
1.7
1.4
0.6
Technical fluids in flow
Bioethanol Rectified ethyl
alcohol
35.0
Mdal
25.8
6.0
1.4
Rectified ethyl
alcohol
Technical fluids
in flow
Bioethanol
33.2
Mdal
Both companies production:
 Ethyl alcohol
 Technical alcohol
 Technical fluids (washers, solvents etc.
 bioethanol (blending agent)
 Alcoholic beverages
 Main fraction of ethyl alcohol
 Wet grain stillage concentrate
Annual production capacity, millions dal
Technical alcohol
Raw alcohol

THE RESULTS OF SE “UKRSPYRT” WORK FOR 1 HALF OF 2015
UNDER NEW MANAGEMENT CONTROL (1)
2
For 1st half of 2014 For 1st half 2015 Diff., %
Net income before tax UAH 49 M UAH 96 M +96%
Net profit margin 6% 13% +117%
Amount of taxes paid UAH 95 M UAH 119 +25%
Gross profit per 1 dal of produced alcohol UAH 53.75 UAH 65.43 +22%
Gross profit margin (mark-up) 38% 33% -13%
Net profit per 1 dal of produced alcohol UAH 8.52 UAH 26.18 +207%
Operating expenses UAH 222.7 M UAH 139.4 -37%
As of 01.01.2015 As of30.06.15 Diff., %
Accounts balances UAH 9.8 M UAH 36.4 M +271%
Including ailing banks UAH 7.6 M UAH 7.6 M -
Working plants 4 14* +250%
Accounts payable, including: UAH 1,418 M UAH 1,236 M -13%
- Bank loans UAH 75 M UAH 0 M -100%
- NJSC “Naftogaz” UAH 66 M UAH 0 M -100%
- Payables to the budget UAH 392M UAH 360 M -8%
- Overdue – for the grain UAH 58 M UAH 11 M -81%
Financial plan approval Not approved Approved for 2015.
Submitted for approval for 2016
* As of Aug 2015р. – 17 plants

-9%
-23%
-36% -37%
+96%
+117%
+207%
виручка валовий прибуток обсяг
виробництва
операційні
витрати
чистий прибуток рентабельність чистий прибуток
на 1 дал
6м2014
6м2015
3
+41%
+88%
+58%
-13%
+398%
+255%
+215%
виручка валовий прибуток обсяг
виробництва
кредиторська
заборгованість
чистий прибуток рентабельність чистий прибуток
на 1 дал
1кв 2015р
2кв 2015р.
Major indicators dynamics for 2014-2015
Major indicators dynamics for 2015
Revenue Production
volume
Gross profit Operating
expenses
Net profit Profitability Net profit
per 1Dal
Revenue Gross profit Production
volume
Accounts
payable
Net profit Profitability Net profit
per 1Dal
6m2014
6m2015
1q2014
2q2014

4
2,100
2,300
2,500
2,700
2,900
3,100
3,300
3,500
3,700
Січень Лютий Березень Квітень Травень Червень
Comparison of purchase prices for raw materials SE "Ukrspyrt" with average market*
prices for grain, UAH with VAT
Закупівельні ціни ДП "Укрспирт" Ринкові ціни на зерно
* Source: NIBULON
-17%
-11%
-8%
-6%
-2%
-11%
January February March April May June
Purchase prices of SE Ukrspyrt Market prices for grain

SE “UKRSPYRT” – TARGET STATE AFTER THE ACCESSION OF
“UKRSPYRT” CONCERN AND MOH COMPANIES
5
A competition commission for the purchase of raw materials and
equipment was created.
The effective planning of the purchase, logistics and storage of the
materials.
Savings on purchases ~20%
The corruption component was excluded from the procurement
process of goods and services for SE "Ukrspyrt"
The execution of contractual obligations of debt to suppliers made it
possible to perform the purchase of raw materials with payments delay
up to 30 days
купівлі
Assets, remaining a part of Concern "Ukrspyrt" can be sold on a competitive basis, with the exception of equipment for the
production of alcohol, which should be utilized for scrap or transferred to SE "Ukrspyrt"
Administration
Already completed
Purchase
Re-certification of the PAs management was performed, then recruited
exclusively through competition, PAs staff was optimized staff,
managerial staff of the SE "Ukrspyrt“ reduced by 33%.
A technical board of the SE "Ukrspyrt" was established to determine
the most effective technologies and the most advanced equipment, for
the implementation of effective control methods of production, selection
of highly efficient strains of yeast, enzymes, implementation of new
technologies
Administrative and management costs were optimized through the
implementation of accounting automation, improvement of the business
processes efficiency and organizational structure transparency.
The remuneration system was optimized, incl. by excluding of the
excessive bonuses, material assistance.
The company funds usage was optimized by reducing the debt
burden, the use of trade credit and treasury functions optimization.
• The number of managerial staff – 150 persons due to:
• Workplaces automation
• The optimization of business process management
• Switch to electronic workflow
• Effective procurement planning system
• Reducing of the purchase price through the proactive
procurement
• The use of additional financial tools to optimize
purchasing prices for raw materials

SE “UKRSPYRT” – TARGET STATE AFTER THE ACCESSION OF
“UKRSPYRT” CONCERN AND MOH COMPANIES (2)
купівлі
Production
Already completed
Realization
Full satisfaction of demand in Ukraine, diversification
The budget payments increased by optimizing production costs, lowering
prices for the purchase of raw materials and the consequent increase of VAT,
dividends and income tax payable
Increased exports, including Turkey, Armenia, Turkmenistan, Georgia and
Poland
Expanded sales outlets through exports
Boilers reconstructed to substitute the gas with solid fuel
The offers to supply ethyl alcohol, which corresponds to the code of heading
2208, were received from the companies Universal Kemical Ltd, Farmont
and SADELON
Prime Minister assignment to release the alcohol for export at Rotterdam
Platts Rates was received
Production assortment expanded
Excessive production capacities redeveloped on the production of goods in
demand, i.e. industrial alcohol, raw alcohol, bioethanol (blending agent),
technical products.
The organization of wet corn storage and processing has significantly reduced
the cost of drying
Implemented energy saving measures
The production of bioethanol and bioethanol-based components was
increased
Draft Resolution on raw ethanol production and sale under nomenclature
code 2208 was prepared and reviewed at a meeting of the Cabinet of Ministers
(currently under revision)
The training for specialists of enterprises with the determination of the enzymes
activity, which helped to reduce costs by 37% - from UAH 3.95 to 2.5 UAH to
the cost of production per 1 deciliter of alcohol
The attracted investors' funds were used at working PAs for mounting of the
equipment for the production of wet concentrate, the increase in commodity
products totaled 2.5 million in the first half (6.8 thousand tons).
The reconstruction of the Voyutychi PA for the production of technical
designation was started with the assistance of the funds of the investor - the
“OKKO“ company
• Cost reduction per unit of output
• The reduction of the gas consumption per unit of production
by 15% in 2016
• Production assortment expansion
• The increase in production due to start of standing plants
• The increase in sales both in the domestic and foreign
markets by expanding the product range and markets
• Import substitution (technical fluids, solvents)
6

EFFORTS TO IMPROVE TECHNICAL AND ECONOMIC
PERFORMANCE OF ENTERPRISES TAKEN EARLY 2015.
7
Financial optimization:
• The debts to suppliers of raw materials repaid by 81%, bank loans repaid in full,
which will reduce the financial expenses of the enterprise;
• Financial diagnosis involving financial auditors "big four“ was launched
• Restored accounting data as of 31.12.2014r. after their complete destruction;
accounting data and information protection methods implemented; the analysis
of accounts receivable is being conducted for the possibility of its recovery;
• It was agreed to provide interest-free loans to consumers of SE "Ukrspyrt";
• The cost of raw material purchases decreased by 20% due to efficient
management and creation of competitive commission for the purchase of raw
materials and equipment;
• The number of the managerial staff of SE “Ukrspyrt” was decreased by 33%;
• vodka and liquors production was organized in Lutsk PA;
• native stillage sold foe the amount of UAH 968 thousand.
Operational optimization:
• The investment plan developed and approved;
• There is a Resolution of the Cabinet of Ministers of Ukraine on the
production and trade of the raw alcohol under nomenclature code
2208;
• shipment of the main faction of ethanol for export and increase in
selling price of the main faction, fusel-ester concentrate and fusel oil
on the domestic market;
• Increase in production of alcoholic beverages of own production with
an increase of their sell-off on the domestic market;
• development of new formulations of alcoholic beverages and
packaging design to increase sales;
• contract for the supply of blending agent is signed;
• signed contracts to supply vodka to Nigeria, USA, Georgia, Azerbaijan
(the first batch in an amount of 5 thousand. dal).
0
1,000
2,000
3,000
4,000
1міс 2015 2міс 2015 1кв 2015 4міс 2015 5міс 2015 1п/р 2015
Production of alcoholic beverages by SE “Ukrspyrt”, thousands dal
1m2015 2m2015 3m2015 4m2015 5m2015 1H2015

 increased capacity by increasing of the cooling surface at BRU, which reduced the cost of production by 5%
 organized the production of wet distillery stillage concentrate for cattle breeding needs
 stream generating machine transferred to alternative solid fuel – peat, that has replaced the gas usage and reduced the
cost by 10%
Stadnytsya PA
 The technology of low-temperature cooking, which reduced production costs by 10% by reducing power consumption, was
implemented
 The stillage heat recovery for brew heating was implemented, which reduced production costs by 10 % by reducing power
consumption
 The stillage heat recovery for batch heating was implemented, which reduced production costs by 5% by reducing power
consumption
 preparatory work conducted to attract investment funds to transfer boilers to burning of solid fuels (peat, coal, pellets).
Completion is scheduled for Q4 2015.
Zaluchchya PA
 prepared permission documents for processing of main fraction of ethyl alcohol (FEA) to technical ethyl alcohol, which
makes it possible to solve the problem in the field of FEA sell-off and to reduce the cost of technical ethyl alcohol
 started production of denatured ethyl alcohol (technical alcohol for producers of the organic synthesis production)
 Prepared permission documents for the processing of confiscated alcohol products to technical ethyl alcohol, which allows
to reduce cost of technical ethyl alcohol
Dovzhok PA
 Alcohol production for internal needs has started
 Energy saving measured implemented (increased wart concentration)
 New kinds of vodka and alcoholic beverages was organized, new design and new formulations were developed according
to traditions of Polissya region;
 preparatory work conducted to attract investment funds to transfer boilers to burning of solid fuels (peat, coal, pellets)
Lutsk PA
THE MEASURES TO IMPROVE THE PRODUCTION COSTS WITH
IMPLEMENTATION SINCE 2015 BEGINNING (1)
8

 Production reconstruction was made to produce bioethanol (capacity 6 thousand dal/day)
 Documents for transition to PA are in preparation
 The production of wet grain stillage concentrate was organized
Zarubyntsi AF
 The technical documentation for the production of technical products under nomenclature code 3820, previously imported,
with packing in consume packaging
 The project of dehydration mounting with capacity of 1 thousand dal/day for the producing of dehydrated technical
production (modern technology of dehydration on molecular sieves)
Thorivka PA
 boiler “LOSK“ is commissioned, which makes it possible to improve boiler efficiency, reduce the cost of heat energy and
reduce the cost of production by 5%
 wet concentrate production scheme was mounted, that made it possible to increase profits by UAH 1.2 million
Storonybaby PA
9
 On behalf of the Prime Minister on technical purposes production, the reconstruction of Voyutychi PA was started with the
assistance of the investor’s funds - the “OKKO“ company. The daily capacity will be 35,000 l/day with packing in consumer
packaging from 1 to 10 liters
 The technology presumes the processing of sugar- and stratch-containing substances
Voyutychi PA
 The completion of preparation of permits for the production and packing of medical ethyl alcohol - new kind of product for
the SE "Ukrspyrt", which will allow to engage the factories and earn additional profitsDubovjazivka PA

 conversion of enterprises to the production of technical alcohol with the implementation of energy saving technologies for
the production of alcohol for export
Myshkovytsi PA
Ivankiv PA
 The stillage heat recovery for brew heating was implemented, which reduced production costs by reducing power
consumption
Novosilka PA
 Conversion to the production of raw alcohol under code 2208 for the export with implementation of resource and energy
saving
Borok PA
Sukhodillya PA
Zalozhtsi PA
Rava-Rus’ka PA
10
Strutyn PA  The enterprise transferred to solid fuel burning – pelets, that made it possible to reduce cost by 10%
 Wet grain stillage concentrate production was organized
Kobylovoloky PA
Completion is scheduled for Q4 2015

 Reconstruction of brewrectificating department for the production of alcohol “Lux” sort with elements of heat recovery was
performedNemyriv PA
 License for bioethanol production was obtained, laboratory accreditation was performed
 The registration of places for bioethanol storage was performed
 Equipment overhaul was performed
 The enterprise was prepared for the bioethanol production with capacity of 4,000 dal/day
Luzhany PA
 The enterprise retrofitting with equipment for alcohol production from molasses for export was performed
11
 Factory launched for alcohol production
 Work on stream generating machine transfer to alternative solid fuel, that will allow to replace the gas usage and reduce
the cost by 10%
Marylivka PA
Kozliv PA
Bershad PA
 Ethyl alcohol production restored
 Preparatory work conducted to attract investment funds to transfer boilers to burning of solid fuels (peat, coal, pellets)
Borshiv PA

PLANNED MEASURES TO INCREASE THE COMPETITIVENESS OF
SE “UKRSPYRT” (1)
12
1. Expanding the range of production and conversion of
standing excessive capacities to produce the production in
demand:
• bioethanol;
• Technical alcohol;
• Absolute technical alcohol;
• Technical production;
• Raw alcohol 2207 code of UCGFEA;
• Raw ethanol 2208 code of UCGFEA;
• Dry grain stillage.
2. The improvement of technological schemes due to:
• Complex raw processing;
• The enameling of inner surface of the fermenting apparatus to
improve the quality of equipment disinfection;
• The implementation of plants water recycling;
• To conduct the technology audit of all companies of SE
“Ukrspyrt” in 2015 to determine the actual production
capacities according to guidelines for the determination of
capacity of basic technology equipment of alcohol production,
developed by “UkrNDI Spyrtbioprod”
• The installation of the mount for the technical alcohol
absolution with capacity of 3,000 dal/day
3. Ensuring of effective control of production and operating
activities:
• the implementation of a consolidated system of accounting and
operational management accounting;
• system of operational control of production processes at each stage of
production and storage of alcohol;
• the implementation of electronic registration of production with data
transfer to the State Fiscal Service;
• To provide some PAs with status of branch, which conduct their own
purchases according to approved budgets;
• Implementation of operational input control of enzymes activity for
quantitative reduction of usage.
4. Implementation of energy saving measures:
• transfer of steam generating mounts to alternative fuels (liquid and
solid);
• implementation of biogas production from stillage technology that will
allow to receive the biogas with methane concentration up to 75%;
• installation of more efficient burners for combustion of liquid fuels;
• the replacement of energy-intensive engines;
• installation of frequency converters;
• automation of production processes;
• heat recuperation in industrial processes;
• reducing production costs through the use of secondary energy;
• the implementation of the technology of brew purification under
vacuum.

PLANNED MEASURES TO INCREASE THE COMPETITIVENESS OF
SE “UKRSPYRT” (2)
13
5. Improving the ecological condition of the environment by:
• the organization of wet stillage concentrate and dry distillate
stillage production;
• the implementation of the technology of biogas production from
stillage;
• the use of stillage centrate for the batch preparation up to 50%,
that will allow to reduce the amount of artesian water and
correspondently, reduce the emissions to filtration fields up to
50%.
6. Improvement of financial performance by means of:
• reduction of accounts payable by restructuring, partial or full
cancellation;
• reduction of accounts receivable by penalties, including by the
court;
• increase in sales in the domestic and international markets;
• creation of excise terminal in Illichivsk for the export of technical
alcohol to Turkey and the EU countries.
7. Legislative initiatives
• Draft law on establishment of zero excise duty on ethyl alcohol for
the production of technical products (washers, solvents),
manufacturing perfumes, vinegars is prepared and currently under
revision in Ministries and departments;
• Draft law for the establishment of codes in UCGFEA for production
containing alcohol is prepared;
• Preparation of the draft law on strengthening of criminal liability
for the manufacture and sale of counterfeit products;
• Prepared the bill on cancellation of penalties assessed to preserve
the solvency of state enterprise;
• Preparation of amendments Code of Ukraine "On Subsoil" on
extraction of groundwater up to 300 m3 per day for production
without a special permit for subsoil use.

POSSIBLE RISKS FOR THE SE “UKRSPYRT” AND ALCOHOL
INDUSTRY IN WHOLE
14
• Reducing the demand for alcoholic beverages in
Ukraine
• Failure of Verkhovna Rada of Ukraine to approve
the legislative changes for preferential and zero
rate for alcohol products for technical industrial
purposes, for the production of perfumes and
food vinegar, which will make the price of
products uncompetitive
• The importation of counterfeit goods (alcohol
and counterfeit vodka) to Ukraine
• Dumping risk at the market of technical fluids
• The lack of legislative regulation of mandatory
bioethanol content (blending agent) in engine
gasoline with a gradual increase in the proportion
up to 10%
• Failure to accept the laws of Ukraine on
cancellation penalties and assessed taxes for
periods before 31.12.2014r.
• Rising prices for raw, materials, transportation,
exchange rate instability will lead to
incompetitiveness of the SE "Ukrspyrt" products on
foreign markets
• Deterioration of the political and social and
economic situation in Ukraine
• Lack of fight against illegal production of goods
• Changes in the codification UCGFEA, such as
assigning bioethanol not alcoholic code
• Granting permission to import alcohol
• Market demonopolisation

PROPOSALS FOR INVESTMENTS ATTRACTING FOR ENTERPRISE
DEVELOPMENT
15
Objectives of investment plan of SE "Ukrspyrt": :
• organization of bioethanol production using the standing exceeding reconstructed facilities of SE "Ukrspyrt";
• expanding the range of alcohol products through the organization of production the fluids for flexography, inks solvents,
bioethanol, raw alcohol as a raw material for the production of bioethanol, alcohol-containing fluids of technical and
household products, medical alcohol, ether-aldehyde fractions with an increased volume of related impurities;
• a number of preplanned organizational, technical and technological measures, referred to restore the effective work of SE
“Ukrspyrt” and full load of excess capacities with the release of a fully competitive and marketable products;
• The replacement of imported products with domestic products;
• Boilers reconstruction for burning solid fuels;
• Mounting the dryers for production of dry grain stillage.
№ Ways of investments Rationale
Investments needs,
thousand UAH
2015
1 Implementation of bioethanol production: Increase in bioethanol
production
45 000
Kosari PA 45 000
2
Installation of stream generation boilers working on
solid fuel:
Substitution of gas consumption
with alternative (solid) fuel
sources
76 000
36 000Zaluchchya PA
Storonybaby PA 16 000
Stadnytsya PA 5 000
Marylivka PA 9 000
Kobylovoloky PA 10 000
The measures of the investment plan, for which the interested investors have already been found for
overall amount of UAH 121 million and additional negotiations are conducted regarding the terms and
conditions of their participation in such projects in 2015:

SE “UKRSPYRT” PRODUCTION IN 2014 AND PLAN FOR 2015
16
Production in 2014р., million dal Production plan for 2015, million dal*
11.9
0.2
0.7
Technical fluids
in flow
Bioethanol
Rectified ethyl
alcohol
12.8
Million
dal
*after the accession of the enterprises of Concern "Ukrspyrt"
13.5
1.0
1.1
0.9
0.7
0.18
Technical ethyl
alcohol
Production in flow
17.38
Million
dal
Rectified ethyl
alcohol
Vodka and
alcohol
beverages
Main fraction of
ethyl alcohol
Bioethanol

POSSIBILITIES OF BIOETHANOL, TECHNICAL AND RECTIFIED
ALCOHOL PRODUCTION (1)
17
170
ths.tons
238
ths.tons
340
ths.tons
USD
158
Million
USD
222
Million
USD
317
Million
5% 7% 10%
Substitution of gasoline import with
bioethanol
• Gasoline consumption in Ukraine amounted
4.2 and 3.4 million tons in 2013 and 2014
respectively.
• To run the program of mandatory use of
bioethanol the production should be increased
from 170 ths. tons (according to current norms
of 5% content) to 340 ths. tons (to fulfill the
norm of 10% content).
• With the consumption levels equal to 2014 and
the norm of 10% bioethanol content the
potential import substitution will be USD 317
millions
Required bioethanol production
54.6
21.5
1.5
106.7
124.9
143.1
0
50
100
150
200
2013 2014 2015 2016 2017 2018
SE “Ukrspyrt” Bioethanol Production Plan, ths.tons

POSSIBILITIES OF BIOETHANOL, TECHNICAL AND RECTIFIED
ALCOHOL PRODUCTION (2)
Substitution of technical alcohol import
• SFS uses for the alcohol-containing fluids the excise tax
established for alcohol
• As a result, the production of technical alcohol fall to 0.2
millions dal in 2014
• The imports totaled 3.5-5 million dal (Belarus, Moldova,
Lithuania, Poland)
• Alcohol plants have the capacity and technological schemes
for the production of technical alcohol
• A zero or reduced rate of excise duty will allow to replace
imports
18
Sell-off of rectified alcohol
• Unrealized rectified alcohol capacities of SE “Ukrspyrt” in
2015 make up to 12.3 million dal
• The export price on the EU market - about USD 5/dal, the
Central Asia market – USD 8/dal
• Potential sales revenue from the rectified alcohol export
will be between USD 61.5 million to USD 98.4 million

FUNDS INFLOW TO THE BUDGET
19
0
50
100
150
200
250
300
350
400
Excise tax VAT Allocations for
social events
Income tax Dividends
In its current state - UAH 541 million
Upon achieving the planned performance indicators - UAH 683 million
(UAH million)
Upon achieving the planned performance by SE "Ukrspyrt" the revenues to budgets of all
levels and contributions to the state funds will increase by 26%

KEY FINANCIAL INDICATORS PROVIDED FOR 2015-2017
20
Approved
financial plan for
2015
Actual 1st
half
2015
Forecast 2015
Diff.
Forecast/plan,
%
2016 2017
Gross profit 387 240 600 55.01% 711 945
% of income 13% 33% 33% 29% 29%
Administrative expenses -220 -77 -220 0.00% -178 -180
Marketing costs -29 -3 -29 0.00% -32 -36
Other operational costs -62 -60 -62 0.00% -52 -53
Operational profit 76 101 289 280.13% 449 676
% of income 3% 14% 16% 18% 21%
Financial costs -24 -8 -8 -68.70% 0 0
Other expenses / Incomes -2 3 7 -467.50% -2 -2
Income tax -9 -17 -52 477.47% -71 -108
Net profit 41 79 237 477.47% 375 566
% of income 1% 11% 13% 15% 17%

PRIVATIZATION PLAN (1)
21
Concern “Ukrspyrt”
MOH*
SE “Ukrspyrt”
The elimination of
other companies, not
transferred to the SE
"Ukrspyrt"
SA**
Completion of the
transfer of assets
that could potentially
be realized *
Transfer of alcoholic
beverage plant and
alcohol plant
Transfer of 2
alcohol plants
Affiliates – producers
of potable alcohol
of technical alcohol
of bioethanol
Affiliates –
manufacturing areas
IPC*** - producers of
potable alcohol
technical alcohol
bioethanol
IPC*** -
manufacturing areas
Key alcoholic
beverages producers
and others
Private owners
Private owners
Private owners
Audit and write off the part of account payable
Law of Ukraine on privatization
of state enterprise "Ukrspyrt" Sell-off on competitive basis
(State Property Fund)
• The estimated cost of 20 state plants - producers of food alcohol – UAH 4.5 billion. The remaining plants may be privatized
for about USD 1 billion.
• The gradual decrease in the share of counterfeit alcohol from 33% in 2014 to 9% will result in UAH 10.2 billion of
additional tax revenues over four years after the privatization through cooperation with the State Fiscal Service.
• The support of new owners by the prohibition on increase of alcohol production capacity in the industry for a period of 3-5
years. Strict control by public authorities and market participants over the production of illegal alcohol.
Privatization chart
*** Integral property complex
* Ministry of Health of Ukraine
** State Administration

The estimated revenue of alcoholic
beverages producers, UAH billions
33%
23%
17%
12%
9%
0%
5%
10%
15%
20%
25%
30%
35%
0
0.5
1
1.5
2
2.5
3
3.5
4
2014 1р 2р 3р 4р
Років після реформи
Акциз ПДВ Доля тіньового ринку, %
+1,4
+2,3
+3,1
+3,5
0.7
1.6 1.8
2.1 2.4
3.3 2.0
1.1 0.5
0.4
3.6%
5.0%
6.0%
7.0%
8.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
2014 1р 2р 3р 4р
Років після реформи
Виробництво ЛГВ Нелег. спирт Рентаб. виробництва ЛГВ,%
22
Counterfeit alcohol
Years after reform
Production of
liqueurs and spirits
Profitability of production
of liqueurs and spirits, %
Excise duty VAT Share of counterfeit alcohol at
the market, %
Years after reform
1y 2y 3y 4y
1y 2y 3y 4y
Additional tax inflows as a result of reduction of
counterfeit alcohol share as compared to 2014, UAH
billions

23
• Creation of a competitive and transparent market in the field of production and sale of alcohol and alcoholic
beverages and as a consequence the improvement in the quality of the products and reduce the share of
counterfeit goods
• The increase of market operators’ revenues and related tax revenues to budget
• The increase in revenues from state property privatization
• The reduction of state budget costs associated with the need to ensure the control over the activities of
state enterprises of alcoholic and alcoholic beverage industry
• The prevention of the privatization of alcohol and alcoholic beverage industry enterprises by people who
have no intention to keep productive specialization of these enterprises;
• Withdrawal the production of ethyl alcohol beyond the state monopoly and implementation of competition
in this area at the end of a certain "transitional" period.
Expected results

FACTORIES WHICH PRODUCE RECTIFIED ETHYL ALCOHOL
24
Factory
Daily
Capacity in
2014,
thousand
decalitres
Days/year
Annual capacity, thousand decalitres
Region
2015 2016 2017 2018
1 Bershad PA 3.00 305 703.9 915.0 915.0 915.0 Vinnytsya
2 Martynivka PA 2.60 305 603.2 Raw alcohol Raw alcohol Raw alcohol Vinnytsya
3 Nemyriv PA 8.40 305 2,436.0 2,562.0 2,562.0 Bioethanol Vinnytsya
4 Ovechache PA 1.60 305 0.0 Raw alcohol Raw alcohol Raw alcohol Vinnytsya
5 Zaluchcha PA 2.00 305 615.0 615.0 615.0 615.0 Ivano-Frankivsk
6 Pidgaychyky PA 3.10 305 951.5 945.5 945.5 945.5 Ivano-Frankivsk
7 Stadnytsya PA 1.30 305 451.9 451.9 451.9 451.9 Kyiv
8 Chervona Sloboda PA 3.62 305 1,049.8 Bioethanol Bioethanol Bioethanol Kyiv
9 Velykoliublin PA 2.00 305 0.0 Raw alcohol Raw alcohol Raw alcohol Lviv
10 Vuzlove PA 2.70 305 783.0 823.5 823.5 823.5 Lviv
11 Storonybaby PA 2.37 305 720.3 722.9 722.9 722.9 Lviv
12 Strutyn PA 2.20 305 596.6 671.0 671.0 671.0 Lviv
13 Kobylovoloky PA 2.50 305 661.4 762.5 762.5 762.5 Ternopil
14 Kozliv PA 4.20 305 1,221.7 1,281.0 1,281.0 1,281.0 Ternopil
15 Marylivka PA 7.45 305 2,170.0 2,272.3 Bioethanol Bioethanol Ternopil
16 Novosilka PA 3.58 305 927.2 1,091.9 1,091.9 1,091.9 Ternopil
17 Lypnyky PA 2.30 305 0.0 701.5 701.5 701.5 Zhytomyr
18 Artemivka PA 2.94 305 0.0 0.0 896.7 896.7 Kharkiv
19 Karavany PA 4.40 305 15.5 1,342.0 1,342.0 1,342.0 Kharkiv
Total 62.26 5,795 13,907.0 15,158.0 13,782.4 11,220.4

25
Factory
Daily
Capacity in
2014,
thousand
decalitres
Days/year
Region
2015 2016 2017 2018
1 Khorostkiv PA 20 300 1,740 6,000 6,000 6,000 Ternopil
2 Luzhany PA 3 300 0 900 900 900 Chernivtsi
3 Kosari PA 12 300 0 3,600 3,600 3,600 Cerkasy
4 Chervona Sloboda PA 12 300 3,600 3,600 3,600 Kyiv
5 Marylivka PA 12 300 3,600 3,600 Ternopil
6 Nemyriv PA 12 300 3,600 Vinnytsya
7 Zarubyntsi AF 6 300 1,800 1,800 1,800 Ternopil
8 Gaysyn AF 15 300 4,500 4,500 4,500 Vinnytsya
9 Naumivka AF 4 300 1,200 1,200 1,200 Sumy
10 Ivashky FA 6 300 1,800 1,800 1,800 Kharkiv
11 Chervone FFP 3 300 900 900 900 Житомирська
12 Popivka EF 6 300 1,800 1,800 Sumy
13 Bar FA 6 300 1,800 Vinnytsya
14 Zhovtneve FA 10 300 3,000 3,000 Poltava
15 Kamyanka FA 12 300 3,600 3,600 3,600 Cherkasy
16 Trostyanets FA 12 300 3,600 3,600 Vinnytsya
17 Lokhvytsya FA 4.5 300 1,350 Poltava
Total 155.5 5,100 1,740 27,900 39,900 46,650
FACTORIES WHICH PRODUCE BIOETHANOL(BLENDING AGENT)

FACTORIES WHICH PRODUCE TECHNICAL FLUIDS
26
Factory
Daily
Capacity in
2014,
thousand
decalitres
Days/year
Region
2015 2016 2017 2018
1 Thorivka PA 2.1 300 174 642.0 642.0 642.0 Kyiv
3 Voyutychi PA 1.5 305 0 448.4 448.4 448.4 Lviv
Total 3.6 605 174 1,090.4 1,090.4 1,090.4

FACTORIES WHICH PRODUCE INDUSTRIAL ALCOHOL
27
Factory
Daily
Capacity in
2014,
thousand
decalitres
Days/year
Region
2015 2016 2017 2018
1 Dovzhok PA 3.7 300 1,073 1,110 1,110 1,110 Khmelnytskyi
2 Uladivka AF 3.8 300 0 1,140 1,140 1,140 Vinnytsya
3 Myshkovytsi PA 2.4 300 720 720 720 720 Ternopil
4 Ivankiv PA 2.0 305 0 0 610 610 Cherkasy
5 Borshiv PA 2.8 305 812 854 854 854 Ternopil
6 Yurkivtsi AF 1.6 300 480 480 480 480 Vinnytsya
7 Andrushchivka AF 4.8 300 1,425 1,425 1,425 1,425 Zhytomyr
Total 21.1 2,110 4,030 5,729 6,339 6,339

FACTORIES WHICH PRODUCE RAW ALCOHOL
28
Factory
Daily
Capacity in
2014,
thousand
decalitres
Days/year
Region
2015 2016 2017 2018
1 Kovalivka PA 2.20 300 191.4 660 660 660 Ternopil
2 Zalozhtsi PA 2.95 300 256.7 885 885 885 Ternopil
3 Myshkovytsi PA 2.40 300 208.8 720 720 720 Ternopil
4 Ovechache PA 1.60 300 480 480 480 Vinnytsya
5 Velykoliublin PA 2.00 300 600 600 600 Lviv
6 Martynivka PA 2.60 300 780 780 780 Vinnytsya
7 Chechelnytskyi FA 2.00 300 600 600 600 Vinnytsya
8 Zirnenskyi FA 2.25 300 675 675 675 Rivne
9 Shpanivskyi FA 2.40 300 720 720 720 Rivne
10 SE “Sumyspyrt” 1.69 300 507 507 507 Sumy
11 Vashkivskyi FA 1.50 300 450 450 450 Chernivtsi
12 Kholmynskyi FA 1.12 300 335 335 335 Chernivtsi
Total 24.71 656.9 7,412 7,412 7,412

FACTORIES, PROPOSED TO ELIMINATE
29
1 SE “Brailiv Juice Factory”
2 Kalynivka Experimental Plant on fractionation of oil and fat
3 SE “Vinnytsya ” ДП "Вінницький liqueur and spirits factory"
4 SE “Trylissya Alcohol Factory”
5 SE “Ukrspyrtpostach”
6 SE “Trade House “Sivershchyna”
7 SE “Novosukhanivka Alcohol Factory”
8 SE “Malovyskivka Alcohol Facory”
9 Chernivtsi State Regional Association of alcohol and liqueur industry
10 Gnizdychiv state alcohol factory
11 SE “Buchach maltose factory”
12 SE “Gannopil alcohol factory”
13 SE “Uman liqueur and spirits factory”
14 SE “Karpachiv alcohol factory”
15 SE “Ichnya alcohol factory”
16 SE “Kryskivskyi alcohol factory”
17 SE “Shabalynivka alcohol factory”

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