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Strategy

The main principle of the company’s development is turning its business advantages into strategic superiority. Such business advantages include:

 

-           Favorable location of power plants in power deficit regions

-           The optimal structure of the fuel mix (coal/gas) – a significant cost management potential

-           Low cost of products

-           High reliability and security of power and heat supplies

-           Maneuverability of equipment

-           Opportunities for sales growth through introduction of market-based pricing for existing and new generation capacities

-           Well-elaborated development programs and cooperation schemes

-           A team of highly-competent managers and employees

 

The abovementioned prerequisites form the company’s strategic goal for 2006-2010Leadership in sales among wholesale generating companies. To achieve this goal, the management of the company is actively working in the following areas:

·          Increasing competence in the area of effective power sales management;

·          Conducting an active investment policy aimed at better reliability, technical upgrade, reconstruction and construction of new generating facilities;

·          Increasing the effectiveness of fuel supplies.

 

Increasing the Company’s competence in the area of effective power sales management implies the following actions:

·          Centralisation of power sales management;

·          Building effective relations with retail power and heat consumers through participation in the capital of regional retail companies;

·          Implementation of new technologies into the power sales system;

·          Introduction of a professional training system in the area of power sales on the wholesale power (capacity) market;

·          Monitoring of environment and competitors including monitoring of changes on the wholesale power (capacity) market, studying demand markets and consumers’ needs;

·          Better reliability and maneuverability of equipment;

·          Introduction of the ISO 9001-2000 Quality Management System.

 

Conducting an active investment policy aimed at better reliability, technical upgrade, reconstruction and construction of new generating facilities implies the following actions:

·          Conducting the policy of information transparency complying with international requirements for a public company;

·          Implementation of the project management system;

·          Formation of an optimal capital structure for a long-term period;

·          Economically sound reconstruction and upgrade of the existing facilities;

·          Construction of new generation facilities in regions with potential power deficit and implementation of strategically important projects.

 

Increasing the effectiveness of fuel supplies implies the following actions:

·          Setting up mutually profitable long-term partnership schemes and joint projects with gas suppliers;

·          Mutually profitable long-term partnership with coal suppliers;

·          Entry into fuel assets.

 

In order to implement the Development Strategy, OGK-5 develops, implements and introduces:

·          Functional strategies;

·          Strategic management system;

·          Financial model for determining the Company’s value

·          Key performance indicators for the Company.

 

The functional strategies developed by the management of the Company include the following main areas of development:

·          Marketing strategy;

·          Production;

·          Fuel supply;

·          Finance;

·          HR;

·          IR;

·          IT.

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