BDS Ukraine Business Development Solutions December 2012

1. BDS UkraineBusiness Development SolutionsDecember 2012 ‘Market Scan’ Report Refrigeration equipment business in Ukraine

2. Agenda I. Conference topics a. Global trends in the industry. b. Energy saving issues and solutions. c. Freon, ammonia or CO2. II. Personal findings

3. I. Conference topics

4. 1. Global trends in the industry Bill Hudson (the President of the Global Cold Chain Alliance) explained the role of his organization, which is: • uniting partners to be leaders in the cold chain • education and networking • help members to maintain an unbroken chain from the point of origin to the point of sale and the consumption

5. 1. Global trends in the industry Partners of the GCCA: • International Association of Refrigerated Warehouses (IARW) • World Food Logistics Organization (WFLO) • International Refrigerated Transportation Association (IRTA) • International Association for Cold Storage Construction

6. 1. Global trends in the industry • Cost reduction: • Labor cost • Energy (including lighting: installation of LED lights) • Freon vs Ammonium trend • Chilled vs Frozen food • Reduction of carbon footprint • Targeted automation, controlling labor costs within facilities (Europe is ahead of North America in this issue) • Warehouse management system implementation ______________________ KPIs and more information on the GCCA activity is in the file attached “1_Hudson_2013 GCCA.pdf”

7. 2. Energy saving issues and solutions Energy efficiency is a very important issue now in all industries as well as ecological issues, with great attention of the Ukrainian government. In some industries energy consumption in Ukraine is higher than in most European countries. Most enterprises work on very old equipment, not really energy saving. Conclusion: energy saving equipment with minimum industrial discharge is much in demand.

8. 2. Energy saving issues and solutions Energy saving issues were covered on the conference by Mr. Inshenkov, professor of National Technical University of Ukraine, consultant of many international projects (TACIS, USAID, UNIDO and others). Institute for Energy Saving and Energy Management (IEE) within the National Technical University of Ukraine "Kiev Polytechnic Institute”, established as a result of a Joint Order by the State Committee for Energy Conservation and the Ukrainian Ministry of Education (No. 137/45, dated 07/05/97) which defines the IEE as a basic energy management training institution in the country. http://www.kpi.ua/kpi_iee 

9. 2. Energy saving issues and solutions The Institute for Energy Saving and Energy Management works in the next directions: • Sustainable Energy Development; Smart City; Smart Building; Renewable Energy Sources and Distributed Generation; • Smart Grid Technology; • Demand Side Management; • Energy Market; • Environmental and Energy Management System; • Climate Change Problem.

10. 2. Energy saving issues and solutions Current Ukrainian Legislation on Energy Saving. • Energy saving law (1994), updated. • Number of standards on Energy Management and Energy audit. International standards: • National standards (USA, Denmark,Ireland, South Korea) • European standard EN16001 • International standard ISO50001

11. 2. Energy saving issues and solutions • Out of foreign suppliers of energy saving refrigerating equipmentare known the following: Johnson Controls, with its cascade systems withcarbon dioxideand aggregates ChillPAC with minimum charge of ammonia; GEA Grasso –piston compressors of V-type; BITZER –with series of commercial compressors of ECOLINE type, and also Danfoss andGuntner.

12. 3. Freon, ammonia or CO2 • So far as Ukraine now isaiming now to enter ITO, it attaches big importance to observance of standards of ecological safety in the country. • However the speech of the representative of Energy Saving Engineering company (ESE) proved that the choice of cold supply concept (Freon, ammonia or CO2) depends on each project feasibility study. Each of the coolant is used now in the country, each of them has its benefits and disadvantages that should be counted and weighed before usage.

13. II. Personal findings

14. II. Personal findings • According to Eugeniy Golub, the Ukrainian Cold Chain Association (UCCA) Chairman of the Board, the market of refrigeration equipment in Ukraine is pretty crowded, key international players are represented here. However there is always a place for new participants. • The tendency is that end users (food factories and supermarkets) buy the equipment and its service from companies-dealers of the manufacturers of the equipment. • The dealers work with several brands of refrigeration equipment in most cases. Some of them both produce the facilities locally and import from foreign manufacturers. In further slides I give descriptions of several companies that install and service the refrigeration equipment at their clients.

15. II. Personal findings BALTIC MASTER (Lithuanian company, acting in all CIS countries, rep. office in Kyiv). The company gives services onprojecting, supply installation and technical service in the following directions: • Refrigerating equipment for hypermarkets, restaurants, hotels, warehouses, medical institutions and otherfacilities of different purposes, squares and configurations. • Climatic and ventilation equipment for warehouses, trade, office and sport centers, industrial properties of different purposes and configurations. • Equipment for industrial cold. • Equipment foragricultural raw materials processing and production of grocery products. http://www.balticmaster.ua

16. II. Personal findings ASTRA Group (Ukrainian company placed in Dnepropetrovsk region, suppliers of Auchan, Silpo, Fourchet supermarkets and other big trade and production companies ). The company givesdesigned solutions for complexrefrigeration security of all parts of the cold chain – from producer to the consumer: • Consulting in cold supply; • Engineering – designed and engineering developmentsfor each task solution; • Manufacturing of refrigeration systems; • Trade and refrigeration equipment and components’ supply; • Installationl • Remote monitoring and managing the refrigeration equipment; • Modernization of facilities; • After-sales service http://www.astraproject.com.ua

17. II. Personal findings ESE (Energy Saving Engineering (Ukrainian company, situated in Kievsuburb). The company gives services onprojecting, supply installation and technical service in the following directions: • Cold supply systems, including centralized andcirculation pump; • Heat supply systems; • Systems of technical conditioning ,ventilation and heating; • Systems of monitoring and dispatching ESE equipped big number of enterprises in the such industries: Food (meet, cheese, milk and other processing) Pharmacy Warehouses that need certain climatic conditions Industrial properties in chemical, oil, metal and machine building Production of construction materials. http://www.es-e.com.ua

18. II. Personal findings TERMOLIFE (The Ukrainian manufacturer and supplier of refrigeration equipment, situated in Donetsk). Clients: Metro C&C, Roshen, Savservice, leading meet processing and packing factories “Globino”, “Jatran’”, “Gerkules” and others, Milkiland, Lactalis and many others. In construction of their products they use materials and components of famous foreign producers: compressor – Sunden (Japan),TRV, eyeglass, filter, electromagnetic valve – Honeywell (USA), Danfoss (Danmark), ventilator – Spal (Italy), Freon conductor – Goodyear (USA), Condenser and evaporator – Gran (Russia), Karyer (Turkey), controllers – Eliwell, Evco (Italy), frame UF – firm plastic of production – Ticinoplast s.r.l. (Italy). http://termolife-donetsk.ua

19. II. Personal findings • There going to be a professional exhibition in Kyiv on February 29th-March 1st, which could also be useful for you to visit. • More information on the exhibition, including the results of the previous one you can get on the web site http://promholod.euroindex.ua/index_e.php

20. for the next steps… Please contact: Oksana Samoylenko BDS Ukraine Executive Director E-mail: oksamo@gmail.com Mob: (+38 067) 4567 455