Magnit’s In-House Production Manufactures Record-Breaking 310,000 Tonnes of Products

Krasnodar, Russia (February 8, 2021): Magnit PJSC (MOEX and LSE: MGNT; the Company, Magnit), one of Russia’s leading retailers, announces the results of its own production output in 2020. Magnit’s own production facilities have set a record by manufacturing almost 310,000 tonnes of private label products in 2020, 30% more than in 2019.

Magnit is the only Russian retailer that has its own food production facilities. The Company owns 17 facilities in different regions of Russia, which produce around 500 food items.

This significant increase in production output in 2020 is primarily due to the facilities reaching full capacity and new production lines being launched. In particular, the Company commenced operations at its greenhouse complex in Tikhoretsk district, cheese packaging facilities in Penza and Dmitrov (equipped with lines for cutting loaf cheese into fixed-weight portions and slices), as well as the citrus packaging facility in Novorossiysk.

In 2019, Magnit revised its private label portfolio to account for the changing customer preferences and launched new brand ranges covering mainly the low and medium price segments—Moya Tsena [My Price] and Magnit. In 2020, Magnit's own production facilities became one of the key suppliers of goods for the Company’s new private labels.

In 2020, Magnit’s in-house production manufactured a total of 25,400 tonnes of flour-based products (which represents a 20% uplift), around 16,700 tonnes of confections (80% uplift), almost 92,000 tonnes of fresh vegetables and fruits (30% uplift), and about 31,000 tonnes of cheese (80% uplift).

Higher demand for essential goods during the spring of 2020 allowed Magnit to increase the supply of dry foods. To ensure high on-shelf availability, the Company significantly ramped up portioning and packaging of basic groats at its own production sites. As a result, in 2020, the output of buckwheat grew by 70% to 5,500 tonnes, with rice growing by 350% to 4,700 tonnes. In addition, the Company increased the output of its capellini tagliati pasta by 200% (to about 5,000 tonnes), and spaghetti by 40% (to about 19,200 tonnes).

The bulk of Magnit’s production is located within Krasnodar region, the Company's homeland. Its Krasnodar Industrial Park houses two of its key facilities—Kubansky Kombinat Khleboproduktov [Kuban Cereal Products Factory] and Konditer Kubani [Kuban’s Confectioner]. In 2020, they manufactured around 65,300 tonnes of products.

In the past twelve months, Kubansky Kombinat Khleboproduktov has increased its production output by 21,8%. The facility has started producing eight new articles, such as crackers and cookies, as well as a range of premium pasta under the Gusto di Roma brand. Konditer Kubani’s output grew by 13,1% in the previous year, bolstered by the launch of 24 new products (truffle sweets, New Year candy sets, mini fruit jellies, and others).

Besides these, Magnit has several other facilities in Krasnodar region, which are located in the city of Tikhoretsk and in the Novotitarovskaya and Plastunovskaya villages. They produce frozen foods (pelmeni, chebureki, blini, vareniki), nuts, seeds, water, vinegar, syrups, as well as flour-based products, groats, soups, etc. In addition, Magnit has facilities in Tver (production of tea, snacks, breakfast cereals), Ufa (groats, spices, seeds, nuts), Tolyatti (frozen pelmeni, khinkali, blini, vareniki), Saratov (groats, spices, seeds, nuts), and Lipetsk region (agricultural products).

In 2021, Magnit will continue developing its own production facilities, expanding its private label assortment, and introducing new types of products.

Magnit’s in-house production manufactures record-breaking 310,000 tonnes of products