Logistics management 1

Logistics management activities. Modern NIBULON’s logistics and infrastructure allow the company to ensure: As part of the implementation of NIBULON’s investment program to revive the Dnipro and the Southern Bug, re-opening them as transport waterways of Ukraine, the company itself developed a modern logistics network. The project aims to reduce traffic load on highways and technogenic impact on the environment in Ukraine. Water transport . NIBULON’s own cargo fleet is the youngest one in Ukraine, as it was built during 2009-2015. The cargo fleet numbers 28 non-self-propelled vessels with the total deadweight of 131,080 tons, 6 self-built tugs (POSS-115 project), 3 tugs (121 project) built in 2015 and 3 purchased tugs of 11,280 kWt, a modern Watermaster Classic IV dredger made in Finland, plus St. Mykolai self-propelled floating crane. During the navigation season in the 2014-2015 marketing year, the company transported and shipped for export about 1.5 million tons of grain cargoes, thereby reducing inland cargo transportation by road and railway transport (taking into consideration a lack of railcars). Thus, the company is gradually starting to transport grain and oilseeds by water transport which is cheaper, more efficient and environmentally friendly. On completion of the implementation of the investment program, the total cargo carried by river will comprise up to 3 million tons of crops annually, which represents the same volume as would be carried by about 250 railcars or about 600 trucks per day. Truck fleet . One of the key aspects and factors of the successful implementation of NIBULON’s investment project is to improve logistic component in the overland transport system. Therefore, NIBULON’s management decided to modernize and increase its own truck fleet. This ensured NIBULON a number of competitive advantages: - minimal transportation cost; - convenience, ease and flexibility, manoeuvrability, efficiency and an improved quality of cargo delivery; - transportation diversification – transportation not only grain batches but also oversized cargoes. At present NIBULON’s cargo fleet numbers 73 modern trucks. This truck fleet is capable of transporting 2,000 tons of grain from different regions of Ukraine. Truck maintenance is carried out by the manufacturers’ (MAN, DAF, Scania) authorized service shops. In order to reduce the impact of traffic flows on the environment, grain carriers follow routes that are agreed in coordination with the relevant local authorities. Railway transportation. In 2012, in order to solve a problem connected with a lack of railcars, NIBULON’s General Director Oleksiy Vadaturskyy initiated the so called “route shipments”. It was possible due to a vertically integrated business structure of NIBULON, ensured by elevator capacities; the company is capable of planning cargo transportation itself without coordinating it with third party. Due to its efficient operation, NIBULON managed to reduce railcar turnover three times as much, from 8-10 days (on average in Ukraine) to 3 days. NIBULON’s efficient operation to transport cargo by railway enables the company to: - create conditions for stable and predicted development of the Ukrainian grain sector; - follow the principle of free competition on the grain market; - increase competitiveness and efficiency of the Ukrainian grain market operation.