Livestock Farming

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November, 2013 LIVESTOCK FARMING

9.7% of total employment in the economy are occupied in the agriculture of The share of agricultural products in Belarus' GDP in 2013 was 7.9%. Belarus, and its share in GDP, in contrast to EU agriculture (3%) is 7.9%. Livestock production in the Republic of Belarus has always occupied a leading position in agricultural production, which accounts for 50 percent of all agriculture.

A positive trend of major agricultural products is projected in 2013. The country has produced 1,172 thsd tons of livestock and poultry, which is 7% more than in 2012, milk- 6651 thsd tons (2%) and eggs - 3961000000 pcs. (5%). Belarus currently ranks А positive trend in production of first on food production per capita among the CIS countries and is in the top list of major agricultural products is world leaders in the production of milk. For example, in per capita production projected in 2013. Belarus is ahead of the Russian Federation on meat - 2 times, and milk - 3 times.

The share of state support of agriculture in 2013 was 14%, but in the framework of the integration of the Customs Union, the share of state should be reduced to 10% in There is a tendency to the 2015. The vast number of agricultural organizations are public. Over the 2010-2013 "holdingization" of agricultural period the number of private investors in agriculture increased slightly, there is a organizations. tendency to create holdings. For example, an example of efficient holdings are JSC "Servolux", that use a completion production cycle - from raw materials to finished

products trade - poultry, and dairy holding company "Danone-Unimilk", in which the investment project aimed at production of dairy products is realised.

Currently, there is a growth of concentration of agricultural enterprises and increase One of the major trends in the of the share of the state through the purchase of shares from individuals, connection industry - gain of concentration of of the state-controlled small and unprofitable enterprises to larger and more companies. efficient , the transfer of shares owned by the collectives to the state. About 1,500 organizations are engaged in the production of agricultural products in Belarus. The largest producers of crop production are Agrokombinat "Dzerzhinsky", About 1,500 organizations are JSC Agrokombinat "Skidelsky", Agrokombinat "Servolux", JSC "Belovezhskoe", JSC engaged in the production of "Vitebsk broiler poultry" and others. agricultural products in Belarus. Belarus is active in foreign trade in products of animal origin. Of livestock products Belarus exports beef, pork, poultry, milk and dairy products, eggs totaling 3.469 bln Russian Federation is the main USD Russian Federation is the main trade partner for organizations of agriculture. trade partner is. Total for 2013 in Russia was supplied with animal products on 2.9 bln USD (4.4% more than in 2012).

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LIVESTOCK FARMING

Production Influence of animal and plant products in the growth of rate of agricultural Indexes of agricultural production production in all categories of farms (in % to the previous year, at comparable prices) 6 5.3 110 110 106.6 106.6 106.6 106.6 3.8 4 2.8 105 102.5 105 2 1.3 100 96 0 100 96 2011 2012 -0.2 2013 95 -2 95 90 -4 -3.8 101 109 107.2 96.5 -6 90 85 Livestock 2010 2011 2012 2013 Crop production Agricultural organizations Farms of all categories Agricultural production in% to the previous year Source - Belstat Agriculture is a priority sector for the Republic of Belarus and one of the most regulated sectors of economic. 9.7% of total employment in the economy are Source: Belstat occupied in agriculture of Belarus, and its share in GDP, in contrast to EU agriculture (3%) is 7.9%. In 2013 there was a decline of agricultural production by 4% compared with 2012, due to the deep recession in the crop (due to the low yield). Financial results for 2013 indicate an increase in revenue by 12% Return on sales, % compared with 2012. However, net profit fell almost half - 54.7%. Despite the significant drop in return on sales (3 times) she kept a positive value, while the 15 12.4 corresponding figure calculated without state became negative in 2013. The 9.4 negative result of the profitability of sales in December 2013 is not an economic 10 7.8 6.9 6.3 7.1 law, but a specialty of the provision of annual reports. 6 6 5.6 5 3.4 3.4

Main financial results of companies in Agriculture 0 I II III IV V VI VII VII IX X XI XII -5 Indicator 2012 2013 2013 in % to 2012 Sales, bln rubles 61 204.10 68 542.80 112 -10 Net cost, bln rubles 46 226.20 58 327.40 126.2 Net income/loss (-) bln rubles 9 239.50 4 188.80 45.3 -15 Proceeds from sales per worker, mln rubles 174.6 203 116.3 -20 Return on production, % 18.9 5.3 х -19.8 Return on sales, % 14.3 4.5 х -25 Return on sales by the final financial result, % 15.1 6.1 х Source: Belstat Return on sales by the final Financial result (without state), % 8.8 -1.9 х

Source: Belstat

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Production

The number of cattle in farms of all Livestock production in the Republic of Belarus has always occupied a categories, thsd heads leading position in agricultural production, which accounts for 50 percent of agriculture and is the main source of funds for the Number of cows Number of cattle development of industrial and social framework in the agricultural 7000 4367 sector of the country. In the Republic of considerable work on 4007 4131 4151 4151 4247 specialization and concentration of poultry, pig, breeding and fattening 6000 of young cattle was done. 5000 4000

3000 Production of livestock and poultry, 1459 1452 1445 1478 1477 1521 kg per capita, 2013 2000 1000 200.0 176.4 0 150.0 96.0 2008 2009 2010 2011 2012 2013 83.7 78.3 100.0 59.3 Source - Belstat 44.4 50.0 The share of regions in livestock production farms 0.0 of all categories at the beginning of 2014 Belarus Kazakhstan Russia Ukraine Kyrgyzstan Moldova

Source - Belstat Meat cattle breeding Vitebsk Cattle breeding is an important livestock industry sector of the republic, 12.1 which accounts for more than half of the total livestock production. The Minsk main part of the cattle population is concentrated in the agricultural 25.2 organizations - 96% and 85% of cows. On 1 January 2014 the number of Grodno Mogilev cattle in the agricultural organizations amounted to 4321 thsd heads 18.2 15.4 that as compared with the previous year is less on 1%, including cows - 1,525 thsd heads (0.1% increase). More than 98% of milk and beef farm Brest Gomel 19.4 12.5 organizations receive from breeding of black-montley cattle. Development of this industry has a number of advantages of an economic nature. These include the low cost of energy and labor on the Source - Belstat keeping of the livestock, the possibility of functioning of the industry Production of livestock and poultry at farms of without building capital facilities, as well as the use of feed resources all categories, mln pieces that are not available for other species. Beef production volumes are 33 CAGR=5.7% kg per capita. For comparison, in Russia - 13.3 kg. However, considering 1400 109% 110% 1172 110% 1200 1092 the significant volume of export of domestic beef to Russia its deficit in 109% 971 1020 Belarus is estimated at 80-90 thsd tons per year. 921 109% 1000 842 107% 108% 800 107% 108% 600 107% 107% 400 105% 106% 105% 106% 200 105% 0 105% 2008 2009 2010 2011 2012 2013 Source - Belstat

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Production

DAIRY CATTLE BREEDING Milk production at the farms of all categories, thsd tons CAGR=2% 6651 6800 6577 6624 108% In milk production per capita the Republic occupies the 1st place among 6500 the CIS countries and 4th in the world (after New Zealand, Denmark and 6600 106% 6400 6225 Lithuania). The volume of raw milk production in 2013 amounted to 6.6 106% 104% 6200 105% 102% mln tons. Currently, the genetic potential of animals Belarus black- 6000 5904 102% motley breed of 8.0-8.5 thsd kilograms of milk per lactation, and 5800 100% 101% average daily gain of young animals for fattening up 1200- 1300 grams. 5600 98% Belarusian scientists created an interbreed type of Holstein cattle 5400 98% 96% "BelGolshtin" with the genetic potential of more than 10,000 pounds of 2008 2009 2010 2011 2012 2013 milk per cow per year. Actively used by "large-scale" selection for the Milk production per capita kg, 2013 Source - Belstat improvement of the mass of the entire population of dairy cattle. 800.0 However, due to the imbalance of diet on protein and micronutrients 711.5 703.1 genetic potential of livestock Belarusian realized only by 50-60 percent. 700.0 603.6 In order to increase the productivity of dairy cattle in 2014 is planned to 600.0 structure adjustment acreage of forage crops (increase in the proportion of legumes: alfalfa, clover, etc..) To ensure the growth of the protein. 500.0 The structure of dairy production in Belarus is quite diverse. 51% of the 400.0 284.4 country's dairy products accounted for whole milk, in second place - 300.0 yogurt and cheese (12% each). 200.0 148.1 108.7 78.8 100.0 EQUINE 0.0

Breeding foundation of the republic are 16 agricultural organizations of Source - Belstat different rock areas that provide the rest of the organization of breeding stock. The most numerous Russian heavy draft horse, the Trakehner, The number of horses in all categories of Byelorussian Drafter, Russian trotters. Equine develops in four areas: farms, thsd heads breeding, sport, Draught horses and productive (meat). Draught horses 160 mainly grown for use in the agricultural organizations of the republic, a 137 significant number of them purchased by private owners. 140 125 120 113 100 100 92 82 80 60 40 20 0 2008 2009 2010 2011 2012 2013

Source - Belstat

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Production

POULTRY Production of eggs in all categories of farms, mln pieces Poultry farming - is one of the most rapidly developing industries in the CAGR=3% country. Per capita produces 40 kilograms of poultry meat and 421 eggs. 4200 105% 105% In 2013, experts saw the decline in production of poultry for slaughter. 3961 105% 4000 There are the following reasons for the decline: the fall in consumer 3778 105% demand, rising prices for feed grain and increase of competition. In 3800 3656 104% beginning of of 2014 in the country in agricultural organizations had 3600 3536 104% 3430 33.6 mln heads of poultry. The main producer of poultry products is the 104% 3400 3312 Republican Association "Belptitseprom" (98 and 93% of produced by 104% 104% agricultural enterprises meat and eggs). A significant number of poultry 3200 103% 103% 104% 103% (33%) is kept by the population of the country. By type of poultry 3000 103% productivity there is poultry for egg and for meat . Production of eggs in 103% Belarus is at the level of developed countries - 421 pcs. eggs per person 2800 103% 2008 2009 2010 2011 2012 2013 per year. This is equivalent to 25 kg of egg mass. Consumption of poultry meat in Belarus is low in per capita average of about 7-10 kg per year, Source - Belstat while in Russia 20-22 kg per year. Production of eggs per capita, pieces

Pig-breeding 500 455 421 Pig breeding - a traditional and the second most important livestock 400 industry of Belarus. Pig industry is the third largest agricultural 283 enterprises undertaken by the material and monetary costs in animal 300 226 husbandry. For its development is spent about 20% of all consumed in 204 173 livestock facilities and almost 35% of forage. The number of pigs is 200 149 mainly concentrated in the agricultural organizations of the republic - 74 more than 80 percent and the rest - in households and farmers. Belarus 100 42 has a wide range of breeds and of world-class quality. The country has bred animals breeds Yorkshire, Landrace, Belarusian meat, Belarusian 0 large white, black-and-white Belarusian, Duroc. An efficient system of Source - Belstat pure breeding and improvement of species and hybridization is The number of pigs in farms of all categories, implemented to obtain rock-linear hybrids delivered on the meat- thsd heads packing plants. On January 1, 2014 in the agricultural organizations of the republic, there were 3300 thsd of pigs, which is 15% less than last 4500 3989 3704 3782 3887 year. The fall of the number of pigs in 2013 due to an epidemic of 4000 3598 3300 African swine, causing mortality of livestock species. Belarus has 3500 established and operates about 110 large pig farms. Deterrent to 3000 efficient production of pork in the country, is an old technological base 2500 of the industry, the need for immediate reconstruction or overhaul. 2000 1500 1000

500 0 2008 2009 2010 2011 2012 2013 Source - Belstat

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November, 2013 LIVESTOCK FARMING

Production

FISH FARMING Fishing activities in the Republic of Belarus is represented by two main directions: the breeding and rearing of fish in artificial conditions and fishing in the fishing grounds. The total area of pond stock under the jurisdiction of the various organizations involved in fish farming is 29.96 thsd hectares. The main type of cultivation is carp, but its share has been reduced from 90 to 75% due to the build-up of breeding grass carp, European catfish, pike. FUR FARMING Fur farming in the country is represented in the form of breeding carnivorous animals (mink, fox, fox) and herbivores (rabbit, nutria, chinchilla). Currently in cell breeding of carnivorous animals are involved 20 organizations, including two fur farms and 5 agricultural departments Belcoopsoyuz, 10 agricultural cooperatives and 3 organization of private ownership. The main type of cell production of furs are mink fur. Their share in the total production is 99.1%. The share of fox pelts - 0.6%, foxes - 0.3%. Fur organizations of Belcoopsoyuz annually produce about 90% of the skins of fur-bearing animals of the total produced in the country - from 70 to 165 thsd pelts. Herbivores: rabbits, nutria, muskrat, chinchilla bred mainly in personal subsidiary and peasant farms. Annual production of rabbit meat (live weight) is about 1100 - 1200 tons. BEEKEEPING Beekeeping is an important branch of agriculture in most countries of the world community. Through the activities of honeybees crop yields increased by an average of 40%. Germination of seed obtained from pollination increases in rape by 20%, buckwheat - by 15%. For 2001- 2011gg. the number of bee colonies in Belarus increased by 31.3 thsd (16.3%), including personal farmsteads households - 36.8 thsd. (24.8%), in farms - 0.6 thsd ha (31.6%). While the organizations involved in beekeeping, it decreased by 4.3 thsd. (10%). Currently in beekeeping of Belarus the individual small-scale production dominates .

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Foreign trade

Exports of goods of animal origin, mln USD Exports of agricultural and food products in Belarus involves about 320 organizations, of which more than 40 - big exporters, shipping abroad of 4000.0 more than 20 bln USD. For the realization of agricultural and food 3469.0 3500.0 products export enterprises develop their own distribution network. 2971.8 266.2 Currently there are already about 130 such structures and 3000.0 2638.2 therethrough abroad supplied more than 20% of export. About 4% of 2264.2 35.9 2500.0 food products sold through the stock exchange. 46.9 2000.0 1516.2 1517.4 43.7 Over 95% of total exports - is livestock and poultry. Belarus sells abroad 2900.1 1500.0 2777.8 butter, cheese and cottage cheese, skimmed milk powder, whole milk 2440.6 26.7 61.2 2112.7 powder, pork, beef, sausages and canned meat. 1000.0 1418.3 1333.8 500.0 302.7 0.0 71.2 122.5 107.8 150.7 158.1 2008 2009 2010 2011 2012 2013 Shares of countries importing products of animal origin Belarus Non-CIS countries Russia

CIS countries, except CIS countries, excl. of Russia Total Russia 3% Russia 20% Imports of goods of animal origin, mln USD 857.1 900 748.8 800 Out of CIS 77% 700 615 600 530.6 488.1 658.2 500 404.8 660.20 400 The Russian Federation is the main trade partner of organizations of 534.7 434 agriculture. Total for 2013 in Russia was put animal products for 2 bln. 300 404.3 328.9 900 mln USD (4.4% more than in 2012). 200

Exports to the CIS countries, except Russia in 2013 amounted to 302.7 100 72.5 173.5 mln USD, an increase compared to 2012 by 91%. In the CIS countries the 90.5 71.5 74.5 144.4 0 6.2 4.4 11.4 5.8 9 25.4 organization of the Ministry of Agriculture in 2013 exported products to 2008 2009 2010 2011 2012 2013 266.2 mln USD (6.5 times more than in 2012). Non-CIS countries Russia

According to the Food and Agriculture Organization (FAO) UNO, Belarus CIS countries, excl. of Russia Total is one of 10 export items, the top 20 exporting countries. Belarusian imports of agri-food products is more diversified, it comes from the different countries of the CIS and non-CIS countries, the bulk of the meat products (frozen beef, pork and poultry) comes from outside the CIS

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Foreign trade

Meat cattle breeding Exports of beef from Belarus in 2013 Foreign trade of beef meat, mln USD Kazakhstan 5%

700.0 622.8

600.0 516.3 493.9 464.5 500.0

369.9 400.0

638.8 300.0 225.7 501.3 524.8 466.0 Russia 200.0 371.4 95%

100.0 232.5 6.8 1.5 1.6 7.4 8.4 16.0 0.0 2008 2009 2010 2011 2012 2013 Imports of beef in Belarus in 2013 Export Import Balance Russia Per capita in the country is produced 33 kilograms of beef. For 11% comparison, in Russia about 13 kg. However, given the large volume of export deliveries of Belarusian beef to Russia, the lack of beef in Belarus is estimated at 80-90 thsd tons per year. October 31, 2013 entered into force on the Eurasian Economic Commission decision on quotas on meat Argentina imports to the countries of the Customs Union in 2014. Application to 13% Belarus for beef was reduced to zero.

Beef exported only into two countries: Russia and Kazakhstan. In this Ukraine case, the dominant position occupied by Russia, which is equal to the 50% volume of supplies 605.4 mln USD, Kazakhstan buys beef in the amount of 33.4 mln USD. Lithuania 26% Geography of Belarusian import is much wider. So, the main suppliers of beef are: Ukraine - 8 mln USD (50%), Lithuania - 4.1 mln USD (29%), Argentina - 2 mln USD (13%) and Russia - 1.7 mln USD (11%).

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Foreign trade

Pig-breeding Imports of pork meat in Belarus in 2013 Belarus annually produces about 445 thsd tons of pork, with an inner need - no more than 80 percent. Surplus is exported, earning it to $ 200 Belgium mln USD per year. And at the same time, Belarus does not waive the 6% Other import of pork. A significant amount of finished goods from the Republic 9% goes to market of the Customs Union. Netherland Eurasian Economic Commission reduced the quota for the import of s Poland pork in Belarus in 2014 tripled to 20 thsd tons. This is stated in the 11% 38% decision of the Board of ECE.

At the same time, the document states that the quota for the supply of Denmark pork in Belarus can be doubled to 40 thsd tons provided that the volume 12% of imports of this product in the first half of 2014 to reach at least 70% of the planned amount. Customs duty on "quota" pork is 15%, with the Germany usual import - 70%. 24% In the import quota for Belarus Russia is interested in the first place, who feared an influx via Belarus to its market of Polish meat. Russian pork producers and meat processors have repeatedly expressed concern that the through Customs Union the Polish import may be on the territory of Russia. Foreign trade in pork, mln USD In August 2013 the main importer of Belarusian food-Russia - refused 400.0 from pork production "in connection with trouble Belarus for African 353.1 swine fever", despite the fact that the centers of ASF in Belarus eliminated in June 2013. And in September 2013, another importer - 300.0 Ukraine - also refused Belarusian pork for the same reason. These 251.9 250.1 218.2 changes had a negative impact on the volume of exports of Belarusian 200.0 184.1 meat in the second half of 2013. Overall in 2013, there was a decrease 149.3 in the export of pork. 138.3 130.2 104.7 119.1 Pork imports is carried out in order to obtain economic benefits. When 100.0 61.6 importing pork savings of $ 0.8-1 for one kilogram. 47.5

The main importers of Belarusian products are Russia, buying pork at 0.0 126.9 mln USD, And Kazakhstan, with the volume of imports of 3.1 mln 2008 2009 2010 2011 2012 2013 -14.1 USD. -33.6 -30.2 -100.0 The main countries exporting their products to Belarus are Poland - 95.2 -67.8 mln USD (38%), Germany - 61 mln USD (24%) and Denmark - 29.6 mln -134.9 -119.9 USD (12%). -200.0

Export Import Balance

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Foreign trade

Dairy cattle Exports of milk and dairy products from Belarus in 2012 Ukraine Foreign trade in milk and milk products, mln USD Venezuela 2% 2000.0 2% 1748.8 Kazakhstan Other 1669.7 1800.0 1589.1 4% 1% 1600.0 1430.8 1400.0 1046.3 1200.0 969.8 1000.0 1789.2 800.0 1620.0 1716.9 1476.2 600.0 1090.1 1006.4 400.0 200.0 43.8 36.5 45.4 30.9 40.5 47.2 0.0 2008 2009 2010 2011 2012 2013 Russia Export Import Balance 91% Export of milk and dairy products from Belarus is 38% of the exports of agricultural products and foodstuffs. Source: UN Comtrade Belarus produces 1.4% of total world milk. Domestically consumed only Imports of milk and dairy products in 46% of manufactured dairy products. Belarus in 2012 Poland Lithuania 2% Geography markets include the markets of Azerbaijan, Armenia, Other 2% Kazakhstan, Moldova, Turkmenistan, Ukraine, and Venezuela. Germany 2% 3% The main market for Belarusian milk and dairy products is Russia. This is due to the transport shoulder and consumer preferences. In the short term the situation will continue. However, further expansion of exports is limited by economic and environmental factors. Processing of milk products with a long shelf life depends on the market situation, which is determined by the major exporting countries. Import of dairy products in the territory of the Customs Union Commission to address the CU is only possible with permits issued by the competent authorities of the countries of the Customs Union. All permits Russia in Belarus and Russia are in a single electronic system "Argus" and are 91% easily traced by the competent authorities of the parties. This system allows you to track the number of already imported goods, as well as its country of origin. Source: UN Comtrade

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Foreign trade

POULTRY Imports of poultry meat in Belarus in 2013 Foreign trade in poultry meat, mln USD

300.0 219.4 250.0 201.6 Other Belgium 20% 200.0 Poland 143.3 2% 31% 150.0 245.6 100.0 69.7 219.2 Hungary 3.0 33.2 158.7 6% 26.2 50.0 10.2 15.5 17.5 13.2 42.6 9.4 77.4 7.6 0.0 Lithuania 2008 2009 2010 2011 2012 2013 6% France 10% Ukraine 25% Export Import Balance

In foreign trade of poultry the surplus is observed . Leader in the import of meat from Belarus is Russia. She bought in 2013 for poultry 216.6 mln Imports of eggs and egg products in USD, Representing 98% of total shipments. Poultry is imported by Belarus in 2013 Poland (31%), Ukraine (25%), France (10%), and others. Belarus continues to export eggs to the CIS countries. Over 2013 Russian bought in Belarus 832 mln pcs. for 62.2 mln USD, or 98% of total exports. In Kazakhstan supplied 11 mln pcs. Belarusian eggs with total cost 840 thsd Russia USD. A minor part of the goods went to Moldova. Despite the fact that 22% 75% of the total egg production remains in Belarus, and domestic consumers prefer to buy Belarusian eggs, the state continues to import this product. The volume of its import is limited: for the reporting period from Poland eggs received in the amount of 11.5 mln Pieces worth 3.7 mln USD from Russia - 1 mln Pcs. 141.1 per thsd. USD. The total volume Poland of import of eggs was 12.6 mln Pieces, and the cost - 3.9 mln USD. 78%

Source: UN Comtrade Foreign trade in eggs, mln USD

80.0 61.1 60.0 35.1 33.8 38.0 40.0 25.4 29.2 65.9 20.0 35.3 33.1 37.8 42.1 0.3 29.0 3.5 3.9 4.0 4.1 4.8 0.0 2008 2009 2010 2011 2012 2013

Export Import Balance

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Consumption Share of imports in the consumption of meat and meat products, thsd tons

The main consumers of livestock products are dairy factories and meat- 1000 821.4 858.4 850.6 packing plants. 756.2 771.2

Today in Belarus there are more than 100 companies that perform 500 116.7 157.4 processing of meat. Among the top in terms of meat and finished goods 75.9 41.8 87.9 sales for 2013 can distinguish meat-packing plants located in Minsk, 0 Grodno, Beryoza and Vawkavysk (32% of total sales in the industry). It 2008 2009 2010 2011 2012 should also be noted enterprise Vitebsk, Brest, Sloutsk, Mogilev with a Domestic consumption Import share of more than 5%. In addition to production for the needs of the state, almost all enterprises of the meat industry supply Belarus Consumption of eggs and egg products, manufactured products for export. mln pcs. Processing of freshwater fish in the country are engaged in 7 specialized 3 400 3 180 companies: OJSC "Experimental Fishery" Selec", OJSC "Fish Factory 3 200 3 068 2 990 "Luban", OJSC "Rybhoz" Dneprobugsky", OJSC "Rybhoz "Krasnaya 2 916 Sloboda", OJSC "Rybhoz" Volma", OJSC "Rybhoz "Polesie" and OJSC 3 000 2 845 "Experimental Fishery" White“. Most of the products are supplied to the 2 800 domestic market. 2 600 2008 2009 2010 2011 2012 The largest enterprises of the dairy industry are of "Rogachevskiy Milk Plant" PUE "Mozyr diary products", JSC "Dairy Products" (Gomel), JSC Domestic consumption "Savushkin product", JSC "Bereza cheese-making plant" SEC "Agrokombinat Dreams", of "Grandma's Jug", "Bellakt" .In whole milk Consumption of milk and dairy products, products processed 27 percent of the resources, in the cheese - 30 thsd tons percent, oil - 33 percent, whole milk powder and condensed milk - 10 per cent - so is the structure of processing. On the domestic market of 3 800 3 655 the country consumes about 50% of the dairy products, the remaining 3 600 3 469 3 322 50% is exported. The main trade partners of organizations of the 3 400 3 073 Ministry of Agriculture exporters are the Russian Federation and 3 200 3 061 Kazakhstan. They account for about 93% of total exports of our 3 000 2 800 businesses. 2 600 2008 2009 2010 2011 2012 Consumption of basic foods per capita, kg Domestic consumption

2007 2008 2009 2010 2011 2012 Share of imports in the consumption of Meat and meat fish and fish products, thsd tons products 71 76 78 84 88 88 Milk and dairy 200 165.6 157 160.2 132.6 137.1 products 253 237 228 247 252 281 150 Eggs and egg products, 155.7 100 144.4 139.6 141.9 pcs. 280 283 289 292 310 310 124.6 50 Fish and fish products 17.8 16.1 15.4 15.7 12.6 13.1 0 2008 2009 2010 2011 2012

Domestic consumption Import

Source - Belstat

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Consumption

Consumption of milk per capita, kg In recent years in Belarus the residential consumption of certain foods 400 375.4 has changed . So, according to the year 2012, the consumption of meat 350 and meat products (in terms of meat) compared to 2008 increased by 300 17 kg to 88 kg (rational norm - 70 kg), eggs - by 30 units to 310 (rational 250 norm - 257 pieces) . Leader in meat consumption in Europe is 189.1 182.6 175.6 200 160 Luxembourg (107.9 kg), and Belarus is ahead of its neighboring 144.3 121.3 countries with consumption of 78.4 kg. person. And the consumption of 150 eggs Belarus shares the second place with Ukraine, consuming 15.6 lbs. 100 eggs person per year. 50 0 Consumption of milk and milk products (in milk equivalent), compared with 2008 increased by 28 kg to 281 kg (rational norm - 354.5 kg) of milk. The most active consumer advocates Finland (375.4 kg) And Belarus gives way to Poland, Latvia, Russia and Ukraine, with a per capita consumption of 144.3 kg. Consumption of meat per capita, kg.

120 107.9 Basic level of self-sufficiency 100 With agricultural products 78.4 76.9 80 62.9 61.5 250 60 214 48.5 203.4 199.4 195.1 40 200 177.9 26.8 20 150 128.4 119.4 119.2 120.9 0 111.3 116.4 117.6 118.3 118.3 118.8 100

Consumption of eggs per capita, kg 50 12.6 14.6 14.5 19.3 18.7 16.8 18 15.6 15.6 16 14.6 0 13.4 14 2008 2009 2010 2011 2012 11.3 12 9.5 10 Meat and meat products Milk and dairy products 8 Eggs and egg products, pcs. Fish and fish products 6 4 2 0

Source:ФАО

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Key players

At the beginning of 2014 in the republic there are: 1570 agricultural Sales revenue for the Q3 2013, mln USD organizations, 2337 (peasant) farms. The largest organization of agriculture, in its organizational - legal form are JSC, and of the total volume of agricultural organizations are 489 organizations, i.e. 42%, has the legal form of open joint stock companies. 184.2

According to the results of operations for the 3rd quarter of 2013 came in the 149.3 highest revenue of Agrokombinat "Skidelsky" and amounted to 184.2 mln USD, The second position at JSC "Brest Meat" - 149.3 mln USD, Third at JSC "Grodno 132.4 myasokobinat"- 132.4 mln USD. In the top 5 are also included JSC "Berezovsky 122.2 meat-packing plant« (122.2 mln USD) and JSC "Sloutsky Meat Processing Plant” (115.5 mln USD). 115.5

In terms of revenue per 1 employee leads JSC "Grodno meat-packing plant" - - 100.0 200.0 93.5 thsd USD on 1 employee. Overall revenues by 1 employee for more than 90 Source: Ministry of thsd USD have another 4 companies: JSC "Berezovsky meat-packing plant" - 91.8 Finance thsd. USD. And of "Brest Meat" (90 thsd USD) Revenue from 1 employee in Q3 2013, thsd USD On the results of three quarters of 2013, the highest net profit of Agrokombinat observed in "Dzerzhinsky" - 16.3 mln USD. Net profit of JSC "Smolevichy broiler" amounted to 11.8 mln USD. Should be noted that the third in the results of the 3 93.5 quarters of 2013 was the "Poultry Friendship" with a score of 7.1 mln USD.

91.8

90.0

67.5 Share of proceeds of largest agricultural enterprises in the revenue of all agricultural 64.6

- 50.0 100.0 JSC "Brest Meat" 5% Source: Ministry of Finance Grodno meat- Net profit for the Q3 2013, mln USD packing JSC 5% Other 18.0 16.3 Berezovsky 75% 16.0 meat-packing 14.0 11.8 plant JSC 12.0 4% 10.0 7.1 Slutsky meat- Agrokombinat 8.0 5.5 packing plant JSC "Skidelsky 6.0 2.5 4% 7% 4.0 2.0 Source: UNITER -

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Key players

Reforming the unprofitable agricultural organizations operating in the The number of unprofitable enterprises, units country on the basis of two presidential decrees Belarus - №138 March 200 181 19, 2004 "On some measures for financial recovery of the agricultural 180 157 149 organizations and investment in agricultural production" and №280 160 138 June 14, 2004 "On the Procedure and Conditions selling legal entities 140 enterprises as property complexes unprofitable agricultural 120 125 93 76 organizations. "As a result of the execution of decrees of several 100 98 hundred unprofitable farms were reorganized by merging with other 80 entities. Reorganization of agricultural enterprises by their adherence to 60 the cost-effective organization to reduce the number of loss-making 40 73 64 56 companies, but did not lead to an increase in profitability in the 20 40 industry. As of January 1, 2013 at a loss in Belarus there are 56 0 agricultural organizations and 125 private (peasant) farms. As part of the 2009 2010 2011 2012 rehabilitation of the AIC proposed deferral of payment of debt related farms to investment activities and the introduction of new lines of credit, taking into account the particular organizations AIC (pronounced agricultural organizations seasonal nature of production), with a lower interest burden. agriculture Today the country has 46 holdings. Among the largest agricultural Product profitability, holdings RB can distinguish "Servolux", "Machulishchy", "Tarasava", sold agricultural organizations "Inco-Food", "Slavic Veles", "PUKHOVICHY Agroproduct" and "Gallery of 30 26.7 taste." These holdings implement completion of the production cycle - 23 from raw materials to finished products trade. 19.4 20 18.2 14 13.8 12.2 10.5 10.5 10

0 eggs cattle meat poultry pork milk

-10

-20

-22.6 -30

2005 2012

Source - Belstat

CJSC “Investment company “Uniter”© 15 November, 2013 LIVESTOCK FARMING

Key players

Agrokombinat "Dzerzhinsky" Revenue from the sale of farm "Dzerzhinsky", mln USD 160.0 140.4 140.0

120.0 106.4 101.8 102.8 Open Joint Stock Company "Agrokombinat" Dzerzhinsky“ - a large 98.1 100.0 88.9 integrated industrial holding. JSC "Agrokombinat" Dzerzhinsky "was established as a result of accession agricultural enterprises SEC" 80.0 Pyatigorye", JSC" Fisheries "Hotovo", JSC "Fanipolagrotrans" to JSC "Dzerzhinsk broiler poultry factory" production activities of which began 60.0 January 21, 1979. 40.0 In 2012, poultry meat was produced 40 thsd tons, in 2013 it is planned - 45 thsd tons of poultry meat. 20.0

Every day the to market goes more than 60 types of products, which is - sold in 57 retail stores. Products are in demand by consumers and has 2008 2009 2010 2011 2012 33 кв. Q repeatedly been awarded at international competitions highest awards. 2013

Net income of farm "Dzerzhinsky", mln USD 30.0 Agrokombinat "Servolux" 26.1 24.6 25.0 23.2 23.3

19.2 20.0 16.3 15.0

Group of companies "Servolux" is the largest manufacturer and operator 10.0 of the agricultural sector of the Republic of Belarus and includes: JSC "Smolevichskaya broiler poultry factory" branch "Servolux Agro" 5.0 (production and processing of broiler meat), СJSC "Agrolink" (breeding - poultry) JSC "Ecomol" (fodder production), СJSC "Servolux" (distribution 2008 2009 2010 2011 2012 33 кв.Q of agricultural equipment), a network of grocery stores "Quarter taste." 2013 "Servolux" combines all the technological stages: agricultural production in Smolevichy, Pukhovichi areas, feed production in Orsha district, factory breeder in Bykhaw two broiler poultry farm near Mogilev and Minsk and proprietary distribution network, which covers almost all regions of Belarus.

CJSC “Investment company “Uniter”© 16 November, 2013 LIVESTOCK FARMING

Key players

Agrokombinat "Skidelsky" Revenue from the sale of farm "Skidelsky", mln USD In 1967, in Skidel was commissioned 250.0 221.7 manufactory. In 1996 the 184.2 200.0 "Grodnokhleboproduct." was created. In 158.6 150.9 150.0 2010 he was registered holding 100.0 "Agrikombinat" Skidelsky, "which consisted 50.0 of: - on rights of management company - JSC 2010 2011 2012 33 кв. Q 20132013 "Grodnokhleboproduct", which was renamed to JSC "Holding management company" farm "Skidelsky" - and on the rights of subsidiaries - seven unitary enterprises, geographically located in Net income of farm "Skidelsky", mln USD 18.4 Grodno, Volkovisskij, Zel'venskii, Masty, Slonim and Shchuchyn 20.0 16.9 areas. All made of flour, cereal and meat products are sold under the brand name "Panskі gatunak." In the structure there are 4 pig 15.0 complex with a capacity 24-31 thsd head of growing pigs per year 10.0 8.1 each, two of which has slaughter and processing works. Another 5.0 direction - a set of fattening cattle on the 5000 goals. Two poultry farms production capacity of 37.8 thsd tons of poultry meat in live - weight per year. 5 farms with a total area of farmland more than 2010 2011 2012 -5.0 -3.1 36 thsd hectares. In the retail network has 19 sites. Revenue from the sale of "Belovezhskiy", mln USD

80.0 59.4 60.0 43.7 46.7 37.9 40.9 42.4 40.0 JSC "Belovezhskiy" 20.0 JSC "Belovezhskiy" specializes in growing - and fattening pigs on commercial basis. 2008 2009 2010 2011 2012 33 кв. Q 2013 The company consists of: pig-breeding Net profit of JSC "Belovezhskiy", mln USD complex, feed mill, vehicle fleet, meat 10.0 8.8 cattle farms cattle, as well as the 7.4 8.0 6.7 7.1 network of shops. 5.9 6.0 The company produces a commodity 4.0 pork; cooked sausages, frankfurters, 1.9 sausage, half-smoked sausage, smoked 2.0 sausage, meat pork. Products are sold in - all regions of Belarus under the brand 2008 2009 2010 2011 2012 33 кв. Q name "Bel-Maurice." 2013

CJSC “Investment company “Uniter”© 17 Ноябрь,2013 г. LIVESTOCK FARMING

Foreign capital

In 2014, Belarus plans to attract direct investment agriculture of large TNCs. The list of strategic investors also includes agricultural holdings in Russia, Ukraine, Baltic States, Eastern and Western Europe. Attraction of investors is planned due to the privatization of inefficient state-owned enterprises and state-owned shares of economic entities with the transfer of agricultural land in the long-term lease. For I quarter of 2013 year to agriculture, hunting, forestry and fishery received 44,400.7 thsd USD. Foreign Investment (24,394.3 thsd USD Revenues in 2012). The most significant are the following projects: 1. Investment project for the creation of the sheep-breeding complex for 10 thsd heads near d.Mihalkovichi Lahoisk district on an area of 20 hectares. Investor is IOOO "Eastern Ship." Investor from Iran plans to invest in a $ 20 mln, In 2012, was already invested about $ 5 mln, In 2013 - the rest. Currently constructed approximately 70% of the sheep-breeding complex. Meat products investors will implement in Iran. 2. Investment project to build a complex for processing of turkey meat. Undertook to implement the idea the group of Lithuanian agricultural enterprises Arvi ir Ko. The complex is to be built in the Grodno region. It is expected that the capacity will be five thsd tons of turkey meat and 40 tons of forage. Approximately 23 5 mln euros - is the total cost of investment in new production. 3. Investment project for the creation of agricultural enterprises for the production of pork bacon. The project of building an agricultural enterprise JV "Danprod" for the production of pork bacon with capacity of 11 thsd tons of meat in live weight per year is realized with the participation of Cyprus and the Danish capital. Investment is more than Br400 bln, including Br15 bln already mastered. Building of the enterprise started in May 2012. Pig farm is designed for 3.5 thsd sows of reproductive age, to be supplied to the slaughter of 100 thsd pigs a year, live weight at 110-115 kg.

CJSC “Investment company “Uniter”© 18 November, 2013 LIVESTOCK FARMING

Recent changes

Foreign trade of beef meat, mln USD Dynamics of production of agricultural products in all categories of farms 800.0 638.8 524.8 150000 109718 600.0

100000 400.0 2012 45373 105329 200.0 50000 8.4 16.0 13784 18503 2013 14129 18633 43332 0.0 0 I II III IV 2012 2013 In 2013, in 1 and 2 quarters there was a slight increase in production (by Foreign trade of meat pork, mln USD 2.5% and 0.7%, respectively). And according to the results of 3rd quarter and the year as a whole we can see the decline in production by an 400.0 353.1 average of 5%. 300.0 250.1 In 2013, there was an increase of exports of livestock products by 16.9% 218.2 compared to 2012. But imports grew slightly, adding only 5.4% over the 200.0 130.2 period. Thus, the export of beef increased by 21.7% and imports by 89.7%, indicating the deficit of beef for consumers. At the same time, 100.0 imports of fresh or chilled beef decreased by 14% and imports of frozen 0.0 beef decreased by 126% due to the increase in imports from the CIS countries. Both exports and imports of pork in 2013 decreased almost 2012 2013 proportionately, by 40.3% and 29.2%, respectively. Foreign trade of milk and dairy products, mln USD In foreign trade, milk and dairy products have a general tendency to increase of supply. On average, exports of dairy products increased by 2000.0 1716.9 1357.4 26.5% compared with 2012. The growth in exports of milk and cream 1500.0 made up 17.4% of non-condensed, condensed milk and cream and dry - 50.4%, buttermilk, yogurt and kefir - 65.1% -18.4% of butter, cheese and 1000.0 500.0 cottage cheese - 5 6%. Export whey in value terms decreased by 16.3%, 27.6 47.2 while in quantitative terms has increased by 70.1%. This fact indicates a 0.0 significant decrease in the price of this type of dairy products compared with 2013 year. Imports of milk and milk products has changed more 2012 2013 significantly than exports: 71.2%. The largest contribution to the Foreign trade eggs and egg products, mln increase in imports contributed non-condensed milk and cream - USD 106.2%, whey - 470%, cheese and cottage cheese - 114.1%. 80.0 Exports of eggs and egg products in value terms increased by 50.8%, and 65.9 60.0 in quantitative terms by only 25.9%, i.e. export prices have increased 42.1 over the period under review. But imports of eggs and egg products 40.0 decreased by 4.9%, imports of birds eggs, not in shell and egg yolks of 20.0 52.6%. In foreign trade, chicken meat exports decreased by 10.8% 4.1 4.8 compared with 2012, while imports - by 33.2%. And in monetary terms 0.0 and in terms of quantity changes are proportionate, which means price stability for this type of agricultural products. 2012 2013

Recent changes

Production of milk in agricultural The domestic slaughter was banned for Farmers of the Customs Union organizations (as% of corresponding month of previous On May 1, in the Customs Union comes into force a new technical year) regulation "On the safety of meat and meat products." Experts of the 101.2 101.3 101 Customs Union are confident that the entry into force of the new 102 regulation will strengthen the control over the quality of meat and meat 100 98.6 98.4 98.6 98.8 products. In particular, one of the measures established by the 98 regulations would be a ban on door-slaughter, the meat of which is for 96 95.9 sale. It is noted that the conduct of the ban to avoid violations of the 94 technology of slaughter and infection products, and thus to protect 92 1Q 2Q 3Q 4Q consumers from defective products. Regional Ministry of Agriculture and Economic Development stated that they are willing to support Milk production Number of cows farmers who decide to build a killer platform, and to compensate them for 50% of the cost of the equipment. But farmers say that even with state support to build such enterprises is almost impossible - building a killer platform with all the equipment, experts estimate 272-329 thsd USD. THE RESULTS PERFORMANCE AUDITS OF AGRICULTURAL PROGRAMS ARE DISAPPOINTING The board of the SCC in 2013 discussed the implementation of the national program for purebred breeding in animal husbandry, and the legality of the use of allocated funds. Audit found numerous violations of accounting of animals, veterinary and sanitary standards of their content, the implementation of low-yielding cattle of unknown origin in the guise of a tribal. As it turned out, almost 45 bln rubles went for misuse. the Two materials were transferred In the police to give a legal assessment. Growth of purchasing prices for milk in 2013 By Ministry of Agriculture decision prices for milk in Belarus 27 November 2013 increased by 10 percent. This is the second increase in 2013. Now the cost of a ton of milk varieties "Extra" set at 3.891 mln rubles, the highest grade - 3.352 mln, the first – 3.091 mln rubles (before it was 3.537, 3.047 and 2.810 mln rubles, respectively). With 22.6 thsd rubles per ton increased to 24.9 thsd discount on milk with a temperature above 10 degrees. So the difference in the revenue the farmer can be substantial: a kilogram of milk varieties "extra" costs about 4000 rubles - 800 rubles more expensive than the first.

Legal Environment

Belarusian agriculture is under the control of the State, in particular, Production capacity in 2015. Program of there is a regulation of sale and purchase prices. development of the dairy industry of the Republic of Belarus Prices of agricultural products are regulated by the Government of Belarus: prices are set individually for livestock products (milk, pork). It 2012 2015* should be noted that the price restrictions are only present on a number Processing of milk, mln tons 7.3 9.2 of products, mainly in the products without any additives. Due to the regulation of prices for agricultural products, the bulk of the profits of Issue of dairy products in milk 1.66 2 agriculture is concentrated in the processing enterprises of raw equivalent, mln tons materials Issue of cheeses, thsd tons 156.7 203 Access to raw materials for processing of agricultural products is also regulated at the state level. Every major company has the raw material Issue of butter, thsd tons 132 180 zone secured for him consisting of agricultural organizations Production of dry milk products (fat 57.5 300 surrounding areas. Raw material zones are assigned to the organization and non-fat dry milk, dry whey), thsd of the relevant decisions of regional executive committees. Processors tons work with suppliers on a prepaid basis, thereby acting as a support to agricultural enterprises. Source: Council of Ministers Resolution on 12 November 2010 №1678 Concerning agriculture were developed and implemented the Production capacity in 2015. Program of following programs: development of potato, vegetable and fruit Republican program of reconstruction, technical re-equipment and growing the Republic of Belarus construction of facilities for growing pigs in 2011-2015. Republican program with modern equipment and facilities organizations of agriculture, construction, repair, modernization of production 2012 2015* facilities of these organizations for 2011-2015. Total production of eggs 2495.1 2743.4

The program for development of the dairy industry in 2010-2015. Volume of production of poultry in live weight, thsd tons 407.5 587.5 State Program on development of fisheries activities for 2011-2015. Poultry farming development program in the Republic of Belarus in Source: Council of Ministers Resolution of 28 September 2010 № 1395 2011-2015. Republican target program to improve conditions and safety for 2011- 2015.

Statistical Annex

Number of agricultural organizations and peasant farms 2006 2007 2008 2009 2010 2011 2012 Agricultural organizations 1903 1853 1881 1817 1644 1613 1570 Peasant farms 2222 2188 1949 1867 2001 2118 2337

Source - Belstat

The structure of agricultural production by types of farms in the Republic of Belarus (in current prices as a percentage of total)

2005 2006 2007 2008 2009 2010 2011 2012 2013 Farms of all types 100 100 100 100 100 100 100 100 100 including:

Agricultural organizations 61.3 61.5 64 67 68.7 63.3 70.9 74.8 76.1 private households 38 37.8 35.2 32.2 30.4 35.7 27.8 24.1 22.6

Peasant farms 0.7 0.7 0.8 0.8 0.9 1 1.3 1.1 1.3

Source - Belstat

Place of the Republic of Belarus in the world in the production of certain agricultural products (cost of goods)

2006 2007 2008 2009 2010 2011 beef 37 34 35 34 34 35 pork 31 30 28 27 27 28 Cow milk, whole, fresh 27 28 26 24 24 26 Eggs, in shell 37 36 38 37 35 36

Source - Belstat

Production of major livestock products (all farms) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Sales of livestock and

poultry, thsd tons: live weight 854 898 883 878 930 1024 1121 1176 1209 1335 1400 1464 1557 1669 slaughter weight 598 627 617 605 629 697 767 816 842 921 971 1020 1092 1172 Milk, thsd tons 4490 4834 4773 4683 5149 5676 5896 5904 6225 6577 6624 6500 6767 6651 Eggs, mln pcs. 3288 3144 2923 2824 2950 3103 3337 3228 3312 3430 3536 3656 3846 3961

Source - Belstat

Statistical Annex

Production of main agricultural products per capita (kilograms) 2007 2008 2009 2010 2011 2012 Meat and meat products 71 76 78 84 88 88 Milk and dairy products 253 237 228 247 252 281 Eggs and egg products, pcs. 280 283 289 292 310 310 Fish and fish products 17.8 16.1 15.4 15.7 12.6 13.1

Source - Belstat

Production of basic livestock products in 2013 Livestock and poultry for slaughter (live Milk Eggs weight) thsd tons In % to 2012 Reference: thsd tons In % to Reference: thsd tons In % to Reference: 2012 in % to 2012 2012 in % to 2012 2012 in % to 2011 2011 2011 Farms of all types Belarus 1669 107.2 106.3 6651 98.3 104.1 3961 104.9 103.3 Kazakhstan 1649 100.7 98.8 4888 101.5 92.6 3884 106.3 98.8 Ukraine 3376 108.2 102.9 11501 101.1 102.6 19591 102.5 102.3 Russia 12202 105 106 30661 96.3 100.6 41278 98.2 102.2

Source - Belstat

Food exports of the Republic of Belarus of all, thsd of tons

Name / Years 2000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 frozen beef 6 43.5 46.6 58.4 41.8 34.5 60.4 55.8 27.1 32.1 52.5 pork 14.4 14.7 23.4 36.8 14.9 31.3 17.1 38.8 51.7 60.4 42.6 poultry 6.8 13.2 10.5 9 7.9 6.2 20.9 38.4 75.0 105.6 106.2 Milk and cream, 49.9 94.3 119 153 161 167.9 185.2 195.3 186.1 210.1 291.5 concentrated butter 17 46.8 51.3 53.6 49.5 61.5 85.5 62.7 64.9 85.2 69.2 Cheese and curd 16.9 53.5 65.1 82.6 99 102 121.4 128.7 132.2 143.3 141.0 Eggs mln pcs 908.4 531 441.8 515.9 437.9 463.5 522.8 551.1 608.6 674.6 850

Source - Belstat

Statistical Annex

Foreign trade of the most important types of agri-food products the Republic of Belarus, mln USD

types of products Years

2008 2009 2010 2011 2012 2013 Dairy products and eggs export 1142 1038 1565 1728.7 1894.3 1782.8 import 46.8 41.8 52.4 37 48 52.0 balance 1095.2 996.2 1512.6 1691.7 1846.3 1730.7 Meat and meat products export 479 565 790 850.2 1005.3 988.2 import 171.2 80.2 169 291.4 420.7 283.7 balance 307.8 484.8 621 558.8 584.6 704.5 Fish export 17.1 24.4 41.8 24.4 41.7 100.5 import 277.5 256.1 239.6 253.7 307.5 420.4 balance -260.4 -231.7 -197.8 -229.3 -265.8 319.9

Source - Belstat

LIVESTOCK FARMING

CONTACT INFORMATION

Roman Osipov Maxim Kochov Director Deputy Director [email protected] [email protected] +375 29 6 57 83 26 +375 29 6 29 14 65

Dmitriy Kirilenko Daria Konoplitskaya CJSC "Investment Company "UNITER" Head of Research and Analyst Belarus, Minsk, Nezavisimosti square, 117a, 12th Studies [email protected] [email protected] floor, +375 17 385 24 65 BC "Alexandrov Passage" Tel. : (+375 17) 385 24 +375 29 1 84 40 41 63 Fax : (+375 17) 385 24 64

email : [email protected]

Disclaimer:

This report is prepared for informational purposes only, and is not an offer on the implementation of a strategic transaction. Opinions, projections and estimates in this report reflect our judgment on the date of publication and are subject to change without notice. Although the information in this report comes from sources which we believe to be reliable, and although we have provided their accuracy as of the date of publication, we make no warranties, expressed or implied, of usefulness of the report with respect to the prediction of future events, or assessment of the current or future value of the securities. Any investment decision based on this report should be made based solely on the discretion of the investor, and not under any circumstances UNITER or any UNITER employees or third parties shall not be liable in any way for any action of any party, made on the basis of this report. Neither UNITER nor any UNITER employees nor third parties are liable for damages that result from such action.