Submitted by: Submitted by bluejays1102
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Category: Business and Industry
Date Submitted: 05/21/2009 04:44 PM
DEUTSCHE BRAUEREI
B.B.Chakrabarti IIM Calcutta August 2005
The Agenda for the January, 2001 Meeting of BOD
Approval
budget
of the 2001 financial
Declaration Adoption
of the quarterly dividend
of a compensation scheme for Oleg Pinchuk
Deutsche Brauerei (DB)
Entirely
owned by 16 uncles, aunts and cousins in the Schweitzer family Year 2000: Sales=€ 92.1 mn, Profits= € 2.9 mn. Founded in 1737 Produces High Quality Beer
Expansion into Ukraine
Expanded
into Ukraine in 1998 due to surplus capacity Ukrainian currency ‘Hryvna’ depreciated by around 50% against DM within 3 months following Russian debt crisis in 1998. DB overcame the lowering effect by increased volume.
Expansion into Ukraine
By
early 2001 Ukraine accounted for 28% of DB’s sales. DB’s volume growth over the past 3 years was primarily due to Ukrainian sales. DB marketed beer in Germany through a network of independent distributors, who purchased beer from DB and sold to the retail distribution chain. Marketing in Ukraine was different.
Views of Uncle on Oleg Pinchuk
Quite
pleased with Oleg. Oleg organized 5 distributorships, 211 customer accounts and warehousing arrangements in Ukraine in 30 months on a small budget(!). He really produces results(!).
Views of Uncle on Oleg Pinchuk
Current
earnings: € 81,440 (Base salary-€40,000 and incentive of 0.5% on annual sales increase in Ukraine. Proposal is to increase base salary to €48,000 and incentive payment to 0.6% of the annual sales increase in Ukraine.
Views of Uncle on New Investments
If
present growth continues, unused productive capacity will be exhausted by late 2001. 2001 budget - € 7 mn investment in plant and equipment. Proposed investment in 2002 as suggested by Oleg - € 6.8 mn. in warehouse and distribution center in Ukraine.
Views of Uncle on Dividends
Increase
in dividends for this quarter to a total of € 698,000, one-fourth of...