Product profitability of Russian salt manufacturing companies

Information agency Credinform offers to get acquainted with the ranking of Russian salt manufacturers. The companies with the highest volume of revenue involved in this activity were selected by the experts according to the data from the Statistical Register for the latest available period (for the year 2013). Then, these enterprises were ranked by decrease in product profitability.

Product profitability is calculated as the ratio of sales profit to amount of expenses from ordinary activities. From economic point of view, it shows economic efficiency. Now therefore, product profitability allows to understand whether output of one or another products is reasonable. There are no specified values prescribed for indicators of this group, because they vary strongly depending on the activity field.

Product profitability and solvency index of Russian salt manufacturers
Name, INNRegionTurnover for 2013, in 000's RUBProduct profitability, %Solvency index GLOBAS-
1 NarimanSolProm LLC
INN 3008009201
Astrakhan region 1625 1231,97 240 (high)
2 Nauchno-proizvodstvennaya organizatsiya Sol LLC
INN 7805133581
Saint-Petersburg 78 81,4 323 (satisfactory)
3 RusSol LLC
INN 5611055980
Orenburg region 4 379 675 45,1 216 (high)
4 Solyanoy karer Dus-Dag OJSC
INN 1701024820
Republic of Tuva 172 32,31 362 (satisfactory)
5 TyretskySolerudnikOJSC
INN 3814011769
Irkutsk region 988 826 26,22 183 (the highest)
6 Promtorg LLC
INN 3019002840
Astrakhan region 450 15,68 371 (satisfactory)
7 Grandaim LLC
INN 3015095635
Astrakhan region 250 8,7 344 (satisfactory)
8 Proizvodstvenno-nauchnoe predpriyatie Metall LLC
INN 7449002870
Chelyabinsk region 14 349 3,69 232 (high)
9 Sibirskie tekhnologii Vas LLC
INN 5406559945
Novosibirsk region 990 1,75 328 (satisfactory)
10 Delta LLC
INN 3008007719
Astrakhan region 2434 -0,69 305 (satisfactory)
INN 1911004403
Republic of Khakassia 100 -5,66 340 (satisfactory)
12 Kempendyaiskaya Solevaya Kompaniya LLC
INN 1435138736
Republic of Sakha (Yakutia) 26 689 -9,99 345 (satisfactory)
13 Altaiskaya Soledobyvayushchaya Kompaniya LLC
INN 2224154875
Altai territory 25 944 -10,92 316 (satisfactory)
14 SolSib LLC
INN 3819014530
Irkutsk region 840 -48,28 288 (high)
15 Proizvodstvenno-kommercheskaya firma Amfibiya LLC
INN 3015053843
Astrakhan region 1250 -57,09 306 (satisfactory)
16 Maloyaroslavetskii Solepromysel LLC
INN 4011026368
Kaluga region 0 -100 387 (satisfactory)
17 TotemskySolerudnikLLC
INN 3518007603
Vologda region 0  - 338 (satisfactory)
18 Ob’edinenie Sol-Iletsk LLC
INN 4025044737
Kaluga region 0  - 500 (unsatisfactory)

According to the Minister of Agriculture Nikolai Fedorov, the manufacture of edible salt in Russia can increase by 100 000 tons in 2014 and make 1 mln tons. The increase in production will be caused by reconstruction of enterprises of Orenburg and Astrakhan regions carried out in 2013. Import ratio of edible salt makes 40%, it is app. 600 000 tons per annum. The main importer is Ukraine, which supplies 500 000 tons of production to the Russian market or 80% from total import volume.

Along with that, on the 26th of January 2015 the Federal Service on Customers' Rights Protection and Human Well-Being Surveillance (Rospotrebnadzor) has suspended deliveries of edible salt produced by the State enterprise Artemsol (Ukraine) to Russia. As far back as in November of the previous year it was enhanced the monitoring of products of this enterprise in checkpoints across the state border and in retail chain in view of disclosed non-compliance of edible salt to Russian requirements. The results of investigations confirmed the non-compliance with the requirements of active Russian legislation by Ukrainian manufacturer. Therefore the import of salt was suspended.

Potential of recovery of the Russian salt market is high. As a reminder, Russia produced 1,8 mln tons of edible salt in 2007. The doctrine of food security prescribes that by 2020 Russia must provide itself with salt by 85%. 

The leader of the ranking has become the company NarimanSolProm LLC with the product profitability value 1231,97%, that is an extremely high result and testifies to low production costs. The company has got a high solvency index GLOBAS-i®, that points to company’s ability to pay off its debts in time and fully. 

About 80% of total volume of Russian salt market is accounted for by the company RusSol LLC and it takes the 3rd place in the ranking. The enterprise has shown the product profitability value at the level 45,1%. It is a good result and testifies to a rational approach to company’s cost management. The enterprise has got also a high solvency index GLOBAS-i®, that characterizes it as financially stable. 

The most of companies of the branch cannot boast of high rates of product profitability. By that the value of this indicator by 7 enterprises in the presented ranking is negative, that can be connected with obsolete manufacturing technologies. Along with that, considering the combination of financial and non-financial indicators, the company SolSib LLC has got a high solvency index GLOBAS-i®. 

Worth mentioning that it’s not possible to calculate the product profitability for the companies Totemsky Solerudnik LLC and Ob’edinenie Sol-Iletsk LLC because of the lack of necessary balance sheet figures.


See also: Product profitability of meat products manufacturers

Russia traditionally suffers from the land shortage

The Ministry of Economic Development of the Russian Federation presentend amendments to the article 396 of the Tax Code of the RF. It is suggested to increase the land tax fivefold if the proprietor didn’t build a house within 10 years of the date of land provision for private housing construction (PHC). The authorities explain that there is a big amount of undeveloped sites. It leads to inefficient use of localities’ lands and reduction of property tax levy. 

The position of the state is clear – to get an additional income, to involve the land into the turnover, to activate construction and investment activity. In some cases the land is acquired as a mean of long-term deposit and there is often a barren land  between the existing buildings as the land proprietors are not going to build anything there. 

At the same time, the question is whether it is legal to prejudice the rights of the people that use the land they possess in the way the State doesn’t expect them to.

The initiative of the regional authorities to give 1 ha of land for free to those who want to move to or to live in the Russian Far East, endorsed by the President V.V. Putin this week, will again depend on not only investment component, but also on the taxation. Whereas the underdevelopment infrastructure, the low quality of agroclimatic resources and expensive credit resources will essentially complicate the introduction of the lands into the turnover even if they have owners.