Valio improves at home and abroad
strong gains from cheese and ice cream. But profits were reduced as
a result of exceptional items related to the sale of a US unit and
the planned closure of a production facility.
Valio, the Finnish dairy products group, has reported a 5 per cent increase in turnover for 2002 to €1.6 billion, with both its cheese and ice cream divisions reporting solid gains.
There was also steady growth from both the domestic and international businesses, with Finnish sales reaching €1.07 billion, up 6 per cent, and sales from exports and foreign subsidiaries totalling €530 million.
In Finland, turnover increased in all product groups except for baby foods, with the company's market shares in cheese and ice cream rising. Valio's share of the liquid milk market remained at the level of the previous year, but it saw its dairy fats market share decline.
Net turnover from international operations rose by 5 per cent, with the strongest growth in exports of cheese and butter. Net turnover for foreign subsidiaries increased by 31 per cent, with the most significant growth coming from the Belgian, Swedish and Russian subsidiaries.
Valio has already stressed the importance of its Russian unit to its future growth plans, and that was reflected in the excellent performance of the Valio St. Petersburg division, which increased sales from €10 million to €89 million during the year.
The sales increase was generated by a restructuring of the division at the start of the year, the company said, with responsibility for sales to Russian wholesale operators transferred from Finland to Russia.
Valio's Russian sales also grew by volume. Valio sells mainly butter and matured or processed cheeses in Russia, with the eponymous butter brand and its Oltermanni cheese accounting for 30 per cent and 13 per cent of the Moscow market respectively. Valio's Viola brand of processed cheese has a 32 per cent share of the Russian market as a whole.
Valio expects demand for dairy products in Russia to quickly outpace the production capacity of local producers, and is planning target both well-known and new segments of the dairy market, including the health market.
Turnover from Valio's subsidiaries in the US - Finlandia Cheese, which primarily sells cheese manufactured in Finland, and McCadam Cheese, a US cheese processor sold by Valio in January 2003 - was lower than in the previous year, mainly due to the weak exchange rate with the dollar.
Profits were of €4.2 million impacted by a number of extraordinary items, including a write-down for the Sotkamo production plant to be closed in spring 2003 and a capital loss from the sale of McCadam. The company also paid €9 million more for raw milk than in the previous year, which again impacted profits but which also reflected Valio's continued support for its milk suppliers, the company said.
In total, profits were some €10 million lower than in the previous year.