Trading Update

Ukrproduct Group Ltd
27 June 2006



27 June 2006

                            Ukrproduct Group Limited

                        ("Ukrproduct" or the "Company")



                                 Trading Update



At the preliminary results on 25 April 2006, the Company referred to the
unpredictability within the Ukrainian economy as a result of the country's
negotiations with Russia. Although trading in the first quarter was in line with
expectations, the consequences of these changes have impacted the whole
Ukrainian dairy sector, including Ukrproduct.



Exports of hard cheese from Ukraine to Russia have been severely restricted, and
as a consequence, Ukrainian hard cheese manufacturers have both reduced prices
and released excess products on to the Ukrainian market. Some of this excess
supply has been converted into processed cheese thereby affecting pricing within
this market.



In addition, during the first five months of 2006, the Ukrainian economy has
experienced substantial cost inflation in a number of areas in particular the
prices of gas and electricity. In turn, this has led to some major increases in
the costs of freight services, utilities and rents. Given the trading
environment detailed above, Ukrproduct has had to absorb the majority of these
increased costs.



As a consequence of these difficult trading conditions during the first half of
the year, the Company expects to report substantially lower pre-tax profits for
the first six months of 2006, compared to the same period last year. The company
also expects pre-tax profits for the full year 2006 to be lower than in 2005.



On a positive note, the Company's volumes and margins of packaged butter as well
as the production of skimmed milk powder and export sales are in line with
expectations. In addition, the directors believe that there are early signs of a
reduction in the excess stocks of hard cheese.



The directors continue to believe in the strength of Ukrproduct's position in
its domestic market and its brands. The Company will continue to invest in its
core brands whilst exploring future opportunities within the Ukrainian dairy
sector. Accordingly, the directors believe that the Company will emerge
successfully from the current challenging circumstances.




For further information:

Ukrproduct Group                                                [phone]
Iryna Yevets, CEO, and Dmitry Dragun, CFO

Financial Dynamics                                              [phone]
Ben Foster/ Charles Watenphul




                      This information is provided by RNS
            The company news service from the London Stock Exchange