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Demand for Investment of Top 100 Consumer Related Companies May Reach About $1.5-2 Billion in 2003-2004

April 1, 2003

Moscow — The demand for investment in the top 100 emerging companies of the Russian consumer market might reach 1.5-2 billion dollars in 2003-2004. Greg Thain, the chairman of the Interactive Research Group (IRG) Board of Directors, an independent research group, Greg Thain, said this today at a press conference commenting on the results of the study the "Top 100 Emerging Companies of the Russian Consumer Market." According to Greg Thain, the IRG research group conducted analysis on the RF consumer market, sponsored by the Deloitte & Touche auditing compay, the Bank Societe Generale banking group from Europe, the Altium Capital international finance group, The Moscow Times newspaper and The PBN Company consulting agency. The purpose of the study was to define and describe the 100 main companies of the Russian consumer market as a guide for potential western investors.

IRG analysts didn't include in their study the widely known companies, whose shares are quoted on the stock market, for example, OAO Wimm-Bill-Dann Food Products or OAO Baltika Beer Company, or other companies who have a significant portion of shares in the hands of western corporations. Forty-two producers of fast-moving consumer goods, 15 consumer service providers, 8 agricultural and food producers, 12 retailers and 7 wholesale firms were of the 100 chosen based on their turnovers and profits (also considered were their business reputations, credit histories, effective management and other factors). The analysts forecast the aggregate sales growth of the chosen companies in 2003 to be 20-25 percent.

In IRG's estimates, 43 of the 100 companies plan to attract resources during 2003-2004 at the account of corporate bond placements (30 will appear on the Russian stock market) and 15 companies announced their plans to publicly issue stocks on Russian or foreign stock markets. Besides this, 54 companies intend to attract loans from foreign banks, and 64 from Russian banks. Four companies plan to receive government loans. Over one-third of the companies are considering plans to attract foreign investors, and 21 companies — Russian investors.

IRG analysis estimates the size of the Russian consumer market in 2002 to be 260-275 billion dollars, which is 15 percent higher than the level in 2001. The population's earning in 2002 increased 8.8 percent compared to the previous year according to Goskomstat.

Interactive Research Group (IRG), an independent research group, conducts research on various market segments in Russia and the CIS. The IRG trademark was registered in 2000. Among the clients of IRG are the European Bank of Reconstruction and Development (EBRD), the SUN Interbrew Ltd. beer company, Motorola, the Renaissance Insurance Group, the German commercial bank West LB and others.