Information Agency Credinform presents a review of activity trends of Russian largest producers and suppliers of coffee, tea, cocoa and spices.

The producers and wholesale suppliers of coffee, tea, cocoa and spices with the highest volume of annual revenue (TOP-10 and TOP-1000) have been selected for the ranking, according to the data from the Statistical Register for the latest available accounting periods (2014 — 2016). The analysis was based on the data from the Information and Analytical system Globas.

Net assets is an indicator of fair value of corporate assets that is calculated annually as assets on balance less company’s liabilities. Net assets value is negative (insufficiency of property) if liabilities are larger than the property value.

Table 1. Producers and suppliers of coffee, tea, cocoa and spices with the largest and the smallest net assets in 2016

No. in TOP-1000	Name, INN, region, key type of activity	Net assets, million RUB			Solvency index Globas
		2014	2015	2016
1.	UNILEVER RUS LLC INN 7705183476 Moscow Production of tea and coffee	14 093	8 188	11 388	260 Medium
2.	ORIMI TRADE LLC INN 7804069580 Leningrad region Wholesale of coffee, tea, cocoa and spices	5 282	10 207	7 810	217 Strong
3.	ORIMI LLC INN 4703044256 Leningrad region Production of tea and coffee	3 733	4 896	6 349	180 High
4.	NESTLE KUBAN LLC INN 2353018969 Krasnodar territory Production of tea and coffee	-783	2 237	3 937	244 Strong
5.	COMPANY PROXIMA NJSC INN 5405143630 Novosibirsk region Production of spices	2 873	3 540	3 907	168 Superior
996.	BM-GROUP LLC INN 5047155440 Moscow region Wholesale of coffee, tea, cocoa and spices	-6	-70	-203	364 Adequate
997.	SANTI LLC INN 7702371288 Moscow Production of tea and coffee	154	-95	-459	336 Adequate
998.	RYAZAN TEA FACTORY LLC INN 6228050257 Ryazan region Production of tea and coffee Process of being wound up, 23.09.2016	39	-47	-615	600 Insufficient
999.	BETA GIDA LLC INN 5053023219 Moscow region Production of tea and coffee	-119	-1 039	-744	279 Medium
1000.	TEA CENTURY LLC INN 7722159219 Moscow region Wholesale of coffee, tea, cocoa and spices In process of reorganization by spin-off simultaneously with the accession, 29.05.2018	-474	-793	-948	321 Adequate

— growth compared to prior period, — decline compared to prior period.

Average industry values of net assets tend to increase within the decade (Picture 1).

Picture 1. Change in average net asset value of producers and suppliers of coffee, tea, cocoa and spices in 2007 — 2016

Sales revenue

In 2016 sales revenue of 10 industry leaders amounted to 58% of total revenue of TOP-1000 companies. This is an indicator of a high level of business concentration (Picture 2).

Picture 2. TOP-10 companies by their share in 2016 total revenue of TOP-1000 companies

In general, revenue tends to increase (Picture 3).

Picture 3. Change in average revenue of producers and suppliers of coffee, tea, cocoa and spices in 2007— 2016

Profit and loss

In 2016 profit of 10 industry leaders amounted to 67% of total profit of TOP-1000 companies (Picture 4).

Picture 4. TOP-10 companies by their share in 2016 total profit of TOP-1000 companies

Average net profit values of companies of the sector within a decade tend to increase, despite the losses of 2015 (Picture 5).

Picture 5. Change in average net profit of the largest producers and suppliers of coffee, tea, cocoa and spices in 2007 — 2016

Average net profit values of TOP-1000 companies for 3 years tend to increase, and average loss value declines (Picture 6).

Picture 6. Change in average profit and loss of TOP-1000 producers and suppliers of coffee, tea, cocoa and spices in 2014 — 2016

Key financial ratios

Total liquidity ratio (a ratio of current assets to current liabilities) reveals the sufficiency of a company’s funds for meeting its short-term liabilities.

During the last decade industry average values of total liquidity ratio were within the recommended value — from 1,0 to 2,0 (Picture 7). In general, the ratio value tends to increase.

A calculation of practical values of financial ratios, which might be considered as normal for a certain industry, has been developed and implemented in the Information and Analytical system Globas by the experts of the Information Agency Credinform, having taken into account the current situation in the economy as a whole and in the industries.

Average practical value of total liquidity ratio of producers and suppliers of coffee, tea, cocoa and spices amounted from 0,78 to 2,31.

Picture 7. Change in average values of total liquidity ratio of producers and suppliers of coffee, tea, cocoa and spices in 2007 — 2016

The return on investment ratio is a ratio of net profit to total equity and noncurrent liabilities, and it demonstrates benefit from equity engaged in business activity and long-term raised funds of the company.

The return on investment ratio (Picture 8) tended to decrease during the decade.

Picture 8. Change in industry average values of return on investment ratio of producers and suppliers of coffee, tea, cocoa and spices in 2007 — 2016

Assets turnover ratio is a ratio of sales revenue to average total assets for the period, and it measures resource efficiency regardless of the sources. The ratio indicates the number of profit-bearing complete production and distribution cycles per annum.

During the decade, this activity ratio tended to decrease (Picture 9).

Picture 9. Change in industry average values of assets turnover ratio of producers and suppliers of coffee, tea, cocoa and spices in 2007 — 2016

Structure of production and supplies

Wholesalers of coffee, tea, cocoa and spices have the largest share in total revenue of TOP-1000 companies (Picture 10).

Picture 10. Types of activity by their share in total revenue of TOP-1000 companies, %

91% companies of TOP-1000 are included in the register of small and medium-sized businesses of the Federal Tax Service of the Russian Federation (Picture 11).

Picture 11. Shares of small and medium-sized enterprises in TOP-1000 companies of the sector, %

Key regions of activity

TOP-1000 companies are unevenly located throughout Russian territory, and are registered in 67 regions (Picture 12).

Picture 12. TOP-1000 companies by Russian regions

Financial position score

Assessment of financial state of TOP-1000 companies indicates that most of the companies have a stable and above average financial standing (Picture 13).

Picture 13. TOP-1000 companies by their financial position score

Solvency index Globas

Most of TOP-1000 companies have got a superior, high, strong and medium Solvency index Globas, that indicates their capability to meet liabilities timely and in full (Picture 14).

Picture 14. TOP-1000 companies by Solvency index Globas

Conclusion

A comprehensive assessment of the largest producers and suppliers of coffee, tea, cocoa and spices during the last decade, that considers key indexes, financial figures and ratios, is indicative of predominance of positive trends within the sector. Decrease of return on investment ratio and business activity ratio is an alarming factor.

The Federal Law № 87-FZ dated 23.04.2018 prescribes a package of measures for prevention of bankruptcies of insurance companies, similar to the procedure for financial recovery of banks.

Thus, the law prescribes the creation of the Insurance Sector Consolidation Fund — financed by the Central Bank of the RF and being not a legal entity.

The grounds for the financial recovery of insurance organizations by the Central Bank of the RF will be identified signs of an unstable financial position, threatening the stability of the insurance market as a whole, the interests of policy holders, beneficiaries or other interested persons, or the state.

In such cases, the Central Bank of the RF is entitled to suspend the licenses of insurance companies and appoint temporary administrations, implement measures to prevent bankruptcy, restrict the implementation of transactions aimed at the alienation of property.

The temporary administrations of insurance companies appointed by the Central Bank of the RF may impose moratorium on the satisfaction of creditor’s claims for up to three months from the approval date of the plan of the Central Bank on carrying out measures to prevent bankruptcies.

Insurance companies may be provided with financial assistance to restore their capital to a regulatory ratio of their own funds and liabilities.

In addition, the Central Bank of the RF may acquire shares or stakes in the authorized capital of insurance companies in the volume of more than 75% of shares or 3/4 of stakes in the authorized capital. Such operations are possible only after an increase in the authorized capital to a real value or up to one ruble, by a negative value of capital.

Insurance companies may be sold by the Central Bank of the RF to a new owner upon completion of the procedures of capital increase.

The Federal Law has come into force on June 8, 2018 with the exception of certain provisions, for which other dates of entry into force are specified.

For reference:
The Information and Analytical system Globas contains information on more than 30 000 insurance organizations in Russia. To get acquainted with their activity is possible by subscribing to provide access to the system.

The number of valid licenses for the activities of insurance organizations tends to increase (Picture 1).

Picture 1. The number of valid licenses for the activities of insurance organizations in 2013 — 2017. Source — the Central Bank of the RF as of 16.01.2018.