The company’s revenue was 2.7 billion UAH compared to 2.6 billion UAH in 2015. Also in 2016, UMG’s clay production business transferred approximately 347 billion UAH of tax deductions to budgets at different levels.
The top buyers of Vesco’s clay in 2016 were ceramic tile producers in Spain and Italy, accounting for 20% and 25% of total sales respectively. Overall and according to last year’s results, approximately 91% of UMG’s clay was exported to markets in 26 countries around the world.
Key factors that caused the decrease in sales were changes to logistics costs and the revaluation of customers’ stock in their own warehouses.
“In 2015, due to the country’s unstable economic situation, some of our customers purchased clay for future use. As a result, they began 2016 with a significant amount of stock. All this time, we were ready to provide steady deliveries”, says Vesco’s CEO Evgeniy Tsymarman. “There was as increase in railway tariffs for the transport of products, and a suitable supply of raw materials allowed some customers to wait in order to assess the economic impact of this price increase. We see that in 2017 the situation is stabilising. At present, we have already received pre-orders from our key customers. We hope that the recovery of the market at the end of 12 months will allow us to increase sales by approximately 10% year-over-year.”
Vesco is one of the largest producers of white ball clay in the world. It comprises the Vesco, Druzhkovka Ore Mining and Ogneupornerud companies. The company’s portfolio includes more than 60 types of clay and its main customers are manufacturers of ceramic and porcelain tiles.
UMG INVESTMENTS is an investment company focusing on the business development and processing of raw materials. It was founded in 2006 by the SCM Group. The company comprises five businesses involved in the extraction of clay, limestone and dolomite, the reprocessing and sale of TPP by-products, rare and technical gases, and trading. The total value of UMG’s portfolio of companies is estimated at 400 billion USD.