The Company’s business originated in 1998 with an initial focus on the acquisition and development of food production assets in Far Eastern Russia. In 1999, the Company formally established itself with the incorporation of JSC Synergy Vostok ("Synergy Vostok"), which currently manages the Company’s assets in Far Eastern Russia. Over time, Synergy gradually shifted its core business to the production and distribution of distilled spirits products.
The Company began to shift its business strategy from food processing to distilled spirits in early 2002 to take advantage of the substantial growth and expansion opportunities in the gradually consolidating distilled spirits market. The key milestones in the development of the Synergy's distilled spirits business included the following:
• In 2002: the Company acquired a large distilled spirits producer Ussuriysky Balsam (the "Ussuriysky Balm plant"), one of the leading distilleries in the Primorsky region, according to Rosstat.
• In 2003: the Company acquired Permsky Vino-Vodochny Zavod "URALALKO" - (the "URALALKO plant"), one of the leading distillery spirits producers in the Permsky region according to Rosstat. Since that time the Company has focused on the development of its distilled spirits business, this being the company ’s main expansion priority.
• In 2004: the Company acquired ALVIZ (the "ALVIZ" plant"), a distillery located in the city of Arkhangelsk, which is responsible for more than one third of distilled spirits products sales in the local distillery spirits market.
• In 2005: the Company acquired Likero-Vodochny Zavod Khabarovsky (the "Khabarovsky plant"), the largest distillery in the Khabarovsky region.
• In 2005: the Company acquired the Russky Lyod brand positioned in the low premium price segment and put into operation a twenty-four-hour spirits retail chain in the Khabarovky and Primorsky regions under the Vinnie Lavki Savvi Vodochnikova brand (the "Savva Vodochnikov brand").
• In 2006: the Company acquired a number of distilleries, including Mariinsky Likero-Vodochny Zavod (the "Mariinsky plant"), one of the leading distilled spirits producers in the Kemerovo region, ROOM (the "ROOM plant"), the leading distilled spirits producer in the Nizhniy Novgorod region and Spirtzavod Chugunovsky (the "Chugunovsky plant"), a large ethanol producer located in the Nizhniy Novgorod region.
• In 2006: the Company also launched three national vodka brands: Gosudarev Zakaz, Sily Prirody and Russky Lyod.
• In 2007: the Company acquired the high-margin Beluga vodka brand, a leader in the super-premium and ultra-premium price segments and the Beloe Ozero brand, which is a standard price segment national vodka brand.
• In 2007: the Company acquired other two national vodka brands: the Az and Belenkaya brands, which are positioned in the premium and mainstream price segments, respectively.
• In 2007: the Company acquired Traditsii Kachestva (the "Traditsii Kachestva plant"), a Moscow-region distillery ranked among the top ten private Russian distilleries.