Concern ”Kalina” has become an exclusive representative of the “Cosmetic und Rasierwahren Solingen” company (Germany) at the territory of Russian Federation and CIS countries. The final agreement between the parties was signed on the 10^th June 2004. The company “Cosmetic und Rasierwahren Solingen” is located in the legendary town of craftsmen Solingen (Germany) and produces original male’s grooming under “Wissen und Solingen” brand for more than 400 years already. The representatives of two companies got acquainted at the exhibition in Duesseldorf and agreed to arrange trial sales of the “Cosmetic und Rasierwahren” products in Russia. The trial consignment of the German high quality cosmetics was sold out in three months. Currently Concern “Kalina” together with specialists of the German company are planning to launch a wide-ranging campaign for conquering male’s grooming market in Russia. “Wissen und Solingen” cosmetics is created in the town that has always been famous for the products made of steel. Knives, blades and razor blades were produced in this very place and were famous in whole Europe. The brand comprises 14 classic males’ grooming products including cream, foam, lotions and balsams. All the products are produced according to solicitously kept recipes and are valued for excellently balanced compounding and high quality. Now Russian consumers have got an opportunity to get acquainted to German quality too.

Details of the transaction are not disclosed.

JSC Concern “Kalina” is one of the leaders in the Russian perfumery and cosmetics market. Its leading brands are “Black Pearl”, “Clean Line” and “MIA” in skin care, “32” and “Forest Balsam” in oral care, and “Anzhelika Varoom” in perfumery.

The Company has its head office and plant in Ekaterinburg, a plant in Omsk, and a number of subsidiaries –“Torzhok”, “Pallada-Ukraine” (Ukraine), “Novoplast” (Ekaterinburg), and “Kalina Overseas Holding B.V.” (Netherlands).

For additional information please contact Sergei Kazantsev, Press Secretary, at + (7 3432) 658 306; e-mail: pressa@kalina.org.

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of JSC Concern “Kalina” (the “Company”), as defined in the safe harbour provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify forward looking statements by terms such as “expect”, “believe”, “anticipate”, “estimate”, “intend”, “will”, “could”, “may” or “might” the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statements to reflect events and circumstances occurring after the date of this press release and to reflect the occurrence of unanticipated events. We refer you to the documents the Company files from time to time with the Federal Service for the Financial Markets, including the Company’s Prospectus filed October 21, 2003. These document contain and identify important factors, including those contained in the section captioned “Risk Factors” in the Prospectus, that could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, our competitive environment, dependence on new product development, rapid market change, acquisition strategy, risks associated with operating in Russia, volatility of stock price, financial risk management, and future growth subject to risks.