2015
Sustainable Development of Obolon Corporation
Official Report
All Sections
Economics
Corporation
Sustainable development is a key element of the Obolon Corporation’s strategy. It allows the company to implement its corporate ambitions and fully develop each of its CSR areas: employee development, environment protection, promotion of sports, and support of the local communities.
Production
Producing beverages with a high level of quality and safety is the basis for the long-term development of the Obolon Corporation. Stability of production processes and guaranteed quality and safety of its beverages ensure that the company achieves its goals on the way to sustainability.
Environment
Climate change, resource depletion, and energy dependence are the challenges of the 21st century for individuals as well as for large manufacturers. Reduction of environmental impact and conservation of nature are priorities for Obolon as the largest Ukrainian beverage producer.
Economics
Obolon makes both a direct and an indirect impact on the economy of the country as a whole and specific regions where its facilities are located through job creation, paying taxes to the local and state budgets, development of related industries, and support of the social culture.
Society
Adhering to the principles of sustainable development, Obolon views the participation in the social life of the regions where its facilities are located as an important component of developing Ukrainian society as well as its own business.
For Trade Partners
For Financial Institutions
For Non-Government Organizations
For Government Agencies
For Shareholders and Employees
Customers

Risks

Risks can arise both due to forecasted and unforecasted situations. They all endanger the reputation and sustainable development of the corporation. During the reporting period Obolon faced a range of economic and social risks which impacted the staff and other stakeholders of the corporation.

Forecasted risks



Fiscal policy

  1. Increased rates of excise duty

    Increase of excise rate for beer by 100% – from UAH 1.24 to UAH 2.48 in 2015

  2. Excise rate for beer sales

    Excise rate of 5% for beer sales in retail networks

Impact
  • In 2015, the beer market in Ukraine decreased by 18%
  • Annual average of production capacities in the industry amounted to 50%
  • Lack of transparency in distribution of tax revenue

Unforeseeable risks


Financial crisis

  1. Depreciation of hryvnia

    At the end of 2015 the hryvnia exchange rate to the US dollar rose to UAH 23.9 to $ 1, compared with the rate of UAH 8 to $ 1 at the beginning of 2014.

Impact
  • Increase of raw material, energy resources and logistics services cost
Currency depreciation against USD, %

Falling of consumer demand

  1. Buying capacity decrease

    Consumer confidence index (CCI) is a trend indicator of changes of consumer demand among the population.

Impact

Beer is not an essential product. A drop in income of the population = a drop in beer consumption.

CCI in 2014

Start of anti-terrorist operation (ATO)

  1. Hostilities in the east

    On 14 April 2014 the anti-terrorist operation (ATO) was started. Decree of the President of Ukraine No. 405/2014.

Impact
  • Loss of 7% sales territories in the occupied Donetsk and Luhansk regions
  • Warehouses robbed in Donetsk and Luhansk
  • Loss of jobs of the company's sales teams in the zone of the ATO
  • More than 100 company employees were mobilized
Year of the ATO. Results
  • Ьore than 9 thousand people have died
  • 21 thousand people were injured
  • 1,9 million people became internally displaced
  • Over 12 thousand properties were destroyed

Facts

Investments into equipment upgrade at Zibert’s Brewery, Fastiv
40
million euro
UAH 1 billion in taxes
UAH 1.01 billion paid by Obolon in taxes in 2013
Export to 45 countries
Obolon exports its beverages to 45 countries of the world
UAH 195 million in net profit
UAH 195 million was the net profit of Obolon Corporation in 2013