A combination of rising Russian export and import volumes and relative underinvestment in Russian port and related ground transportation infrastructure has led to increasing congestion through Russian ports. We believe this development presents a growth opportunity for Russian port operators that can efficiently increase their capacity and operational efficiency. We intend to take advantage of this opportunity by investing in new and existing facilities, optimising our mix of cargo specialisations and services, and participating in initiatives to alleviate congestion in the ground transportation infrastructure leading into the Port by pursuing the following initiatives.

 
• Make capital investments to increase capacity and efficiency of our facilities: We aim to increase our cargo shipment volumes whilst increasing revenue and profitability and we have begun implementing an approximately US$700.0 million investment programme to increase our cargo shipment capacity by modernising and expanding existing facilities and building additional facilities to handle both new and existing kinds of cargoes.

  
• Increase capacities, volumes and efficiency in ways that do not require significant capital expenditures: We intend to continue monitoring our operations to identify opportunities and implement measures to increase the capacity and operating efficiency of our facilities, and hence our cargo volumes and revenues, in ways which do not require significant capital expenditures.

 
• Optimise cargo and services mix: We intend to continue optimising our mix of cargo handling capabilities and the other services we offer based on competitive advantages arising from the nature of our facilities and our pricing power.

 
• Participate in development of Novorossiysk transport hub: We intend to capitalise on our selection to conduct the feasibility study for development of the Novorossiysk transport hub, and participate in improving the transport infrastructure leading into the Port, which we expect to alleviate congestion in the delivery of cargoes to and from our facilities.

 
• Reap further benefits from 2006 restructuring: We will seek to reap further benefits flowing from our 2006 restructuring, including increased costs savings, elimination of duplicative services, improved efficiency of operating assets and greater specialisation of services we offer.

  
• Capitalise on opportunities arising from external events: We will seek to capitalise, if possible, and if we determine it to be beneficial to our operations, on opportunities arising from external events which may affect our business, such as increased cargo shipments to the area due to the upcoming 2014 Winter Olympics in Sochi, and the potential construction of the Bourgas-Alexandroupolis pipeline.