Restructuring, equipment modernization and diversification of markets contribute to strengthening PAVA’s financial performance.
December 5, 2008 (PRESSbooth.ORG) -- Supporting the good results PAVA demonstrated in the third quarter of 2008, a plan of preventive measures has been developed to counter the tightening grip of the world financial crisis.
The early steps started from optimizing the structure of the group. Considering the ongoing strategy – creation of a vertically integrated holding which will incorporate agricultural production and processing units – three divisions were formed. These include ‘Agricultural Business’ for crop cultivation and processing, ‘Investment’ and ‘Services’. Restructuring aims to strengthen the company’s performance through improved management decision-taking, financial and marketing policies.
Diversifying sales is among the key issues of the plan. The International Business Department alongside the recently set up Market Development Department are constantly seeking new partners and opportunities for successful collaboration. Consequently, the group is secure from possible declines in sales; moreover, this is in line with the current strategy.
A major part was cost-cutting and it touched on the significant number of expenditure items. Collaboration with banks was developed in several ways. The company began to fully use the benefits of the federal programme - for refund of 2/3 interest rate in grain purchasing loans. It also placed free cash on short-term deposits to generate additional income.
Acting ahead of the crisis, about a year ago PAVA began a modernization programme. It partly re-equipped its flour mills and improved productivity: due to considerable capital investment the company managed to achieve a 10% reduction in the cost of processing raw materials.
These steps are taken to maintain the internal efficiency, while PAVA continues to keep up positive dynamics of the financial performance in the crisis environment.
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