Dear Clients and Partners,

Effective from November 24th this year our plant is switching its operations to three shift 24 hours production due to increasing interests in special quality Birch wood material Worldwide. This decision has been undertaken at AVA-Company Board of Directors meeting held on November 17th.

To this action we have prepared for a long period based on the analyzes of current market situation:

1. Only a few birch producers were available in market for the past two-three years offering either yellow birch or white birch, which was a very much common material. The material offered by AVA under the trademark of RussianBirch proved to be primary material used mainly for furniture, flooring and other in-house purposes. It’s unique coloring, low defects availability and higher density provided very strong marketing positions for the RussianBirch. High technology and modern machinery of the plant provided an out-of-competition high quality material and components always in line with the clients demands, thus providing our clients lower price and money saving abilities as certain additional operation (additional costs) could be ceased to perform.

2. Russian Federation has announced to postpone the third level of new tax duties to be imposed on timber and lumber, approving its positions as one of the main wood exporters. We expect growing interests in Russian K/D and qualified sawn lumber, as well as timber.

3. Current economical situation Worldwide and recession in some countries resulted in almost simultaneous closing dawn of many sawmills and manufacturing plants in Russia, US, Canada and Europe. At the same time continuing interests in wood, although it has slowed down, may not be able to find necessary material in even the current volumes. Therefore, many of manufacturers that still operate are looking for replacing materials and lower material prices. We are sure that RussianBirch will be a perfect choice for most of the manufacturers, and growing production volumes will allow to offer to our clients and customers lower prices.

4. Our latest investments in the purchase of finished flooring line and thermowood processing, as well as technological changes to reduce own harvesting costs, have brought us to retail market with unexpectedly law initial price, which have made interesting to cooperate with us also for major trading houses in Russia and outside. These steps also demanded production growth.

We are certain that our decision will help to exercise the slogan of “best material for lowest possible price”, which is at the right time and in the right place.

Whish all of you good year and stability in your growth. With all our best wishes of Happy Holidays and coming New Year,

Your truly,

AVA-Company Sales and Marketing division