1. Elaboration of Hungerit’s strategy on
new products development and
expansion to neighboring markets
SUSPICIOUS MINDS
Baida Anna
Tatianina Iuliia
Begerska Kristina
Iakovleva Kateryna
Budayev Artem

2. Structure of presentation
Corporate
SWOT-analysis
Product
Conclusions portfolio
diversification
Evaluation of
Identification the new value-
of new market added facility
outlets financing

3. SWOT-analysis
Hungerit
Strengthens Weaknesses
• Vertically integrated business
• Economy of scale • Low share of high value-added products
• Broad business portfolio (bird raising, hatchery, • No direct relationships with international retailers
three processing and packaging plants, R&D • Lack of own fodder production facilities
department) • Low Hungerits’ product availability in the Russian
• Access to EU programs, aimed at support of market
agricultural producers + free trade regime • Low margin for fresh products that generate
• Direct relationships with local retailers majority of sales
• Diversified product portfolio • Low feed conversion rates
• 6 factory shops
Opportunities Threats
• Tough competition and high probability of
• Introduction of closed-production cycle
international companies, entering Hungarian
• Launch of fodder output
market
• Dung procession for biogas output to reduce
• Forint exchange rate fluctuations
dependence on gas supply
• Aggressive promotion of private labels by top-
• Entering the international markets
European retailers
• Diversification of product portfolio
• High saturation of European markets with own
• Development of “private labels”
products
• Introduction of non-waste production (including,
• Low-cost foreign poultry import
selling of geese down and tendons for
• Growing share of bird production in corporate
pharmaceutical industries)
business portfolio

4. Product portfolio diversification
(elaboration of new high value-ended products)
Women with children,
Target Children and teenagers up adults with an average
“earliers”*
audience to 16 years old family income of EUR
7000
Set of chicken bits au gratin
Cool chicken or geese
with vegetables. Ready Chicken bits au gratin in the
Product fillet, packed in natural
meal for preheating in shape of animals
package (craft paper)
microwave
- Time saving - Natural
Emotional component “joy”
Key benefits - No efforts for cooking - Healthy
and “happiness”
- Ease of use - Sense of value
Sales: Western Europe,
Sales: domestic market + Sales: domestic market +
through organic products
neighboring markets, neighboring markets,
Features shops, product boutiques,
through existing distribution through existing distribution
and premium
channels channels
supermarkets
* - customers’ segment including consumers older 16 years old to the age they have
own children, based on the segmentation methodology by Paul Garrison
“Exponential Marketing”.

5. Integrated marketing communications
• Sponsoring TV Program
• Culinary shows for amateurs
POS materials • Sampling
Sponsorship
marketing
Hidden marketing
• Creation of discussion
on culinary forums and Promo actions
web-sites with making Hungerit
with an emphasis on TM communications
Hungerit • Culinary recipes
competition
Sales promotion
Advertisement
• Happy hours in Factory stores
(fresh and environmental friendly
• Product placement in
products sale with 15% discount
local soap operas
after 20.00 everyday.)
• Print advertising in female
• Discount coupons in retail stores
magazines
catalogs

6. Charity and Sponsorships
as a way to make a world a better place for everyone
A year of free poultry for Sponsorship for a children football
orphanages club
• Randomly chosen orphanages • Children’s sport development
will get a fully paid all year must be invested in as a part of
delivery of fresh poultry for their the promotion of new
needs. environmentally friendly products
Sponsorship of the new children’s
center
Every 50 cents of each product to • New centers create a positive
be sold will be given to Hungarian attitude and awareness of the
orphanages brand.

7. Evaluation of the new value-added facility
Goal of receiving additional funding in the amount of 3,5 mln. €: to built up a plant
in Russia and modernize national equipment
Letter of credit with
Financial alternatives / post-import financing
EBRD crediting Shares issuing
terms of financing (instrument to buy new
equipment from
Germany)
long- and medium-term long-term financing (up
Type of financing long-term
(7 years) to 7 years)
depends on the price
Euribor +4% = 8,4% Euribor +3% = 7,4%
Cost of financing share of company on
the stock market
Repayment schedule once a year none twice a year
easier procedure than
no additional expenses publicly registered
other alternatives of
Advantages except credit company can cost
getting financing;
percentage rate more than it is worth
minimizing risks
complicated
time-consuming and
procedure of receiving
expensive process; almost the same credit
funding; heavy
Disadvantages reduction in company’s procedure as receiving
financial burden
control by present bank’s credits
because of repayments
shareholders
once a year

8. Hungerit forecast financials
EUR ths
2008 2009 2010 2011 2012 2013 2014 2015
Total
141,2 151,7 162,9 174,9 187,9 201,8 216,7 232,8
revenue
Ebitda 9,3 10,0 10,8 13,1 14,1 15,1 17,3 18,6
Interest
0,3 0,3 0,2 0,2 0,1 0,1 0,0
Expences
EBITDA-To-
Interest
Coverage 34,0 42,7 62,5 83,9 120,1 206,4 443,4
Ratio
Interest coverage ratio greater than 1 indicates that the company has more
than enough interest coverage to pay off its interest expenses.
Hungerit’s management should choose to receive funding by getting EBRD
crediting to build up a plant in Russia in order to retain influence over the
company; and to use instrument of financing as import letter of credit with
post-import financing in order to minimize risks of international trade and get
second financing to buy new modernized equipment from Germany (the best
producer of equipment).

9. Identification of new market outlets
Medium-term strategy Long-term strategy
The Russian Federation
(Hungerit builds a plant using a
Poland, Romania, Serbia, borrowed resources in a little
Target market outlets
and Moldova town of Smolensk region), and
related markets (Belarus,
Latvia, Lithuania, Estonia)
Market entry period 2-3 years 7 years
- low entry costs and
barriers - low labor costs
- poor foodstuffs’ quality - closeness to state border
Advantages
of national competitors - low costs of production,
- untapped potential transportation, and logistics
- low market saturation

10. CONCLUSIONS
1. Following world-wide trends for time saving and upsurge in consumption
of organic products, Hungerit’s corporate product portfolio should be
diversified with the following high-value added products: set of chicken
pits au gratin with vegetables (TM Hungerit Box), small chicken pits au
gratin in shape of animals (TM Little Hungerit), and cool chicken or geese
fillet, packed in craft paper (TM Valdor).
2. We recommend Hungerit’s management to receive additional funding
by getting EBRD crediting to build up a plant in Russia in order to retain
influence over the company; and to use instrument of financing as
import letter of credit with post-import financing in order to minimize risks
of international trade and get second financing to buy new modernized
equipment from Germany (the best producer of equipment).
3. Aiming at expansion of its business activities and export sales, we have
identified two potential regions for expansion:
• Medium term: Central and Eastern Europe (Poland, Romania, Serbia,
and Moldova)
• Long term: the CIS region (the Russian Federation and related markets
(Belarus, Latvia, Lithuania, Estonia).
Thank you for your attention!