Ekosem-Agrar boosts growth in Russia

By Jim Cornall contact

- Last updated on GMT

Ekosem-Agrar is growing with acquisitions as well as adding more staff. Pic: Ekosem-Agrar
Ekosem-Agrar is growing with acquisitions as well as adding more staff. Pic: Ekosem-Agrar

Related tags: Milk

Ekosem-Agrar GmbH, the German holding company of Russian milk producer Ekoniva Group, continued its growth in 2017, the company said.

In the 2017 financial year, the dairy cow herd increased to roughly 39,400 animals (+44%) with a daily milk output of over 900 tons (+50 %). The milk price currently stands at approximately €0.44 ($0.33), 25% above the previous year's average price.

The Russian government's subsidies and Russian banks' increased interest in the domestic agricultural sector also make for a good investment and financing environment, the company said.

It aaded it took advantage of the favorable conditions to make further investments in the construction of dairy cow facilities.

Growing staff numbers

For the full year, Ekosem-Agrar plans to complete three dairy cow facilities for a total of approximately 8,800 dairy cows with a daily milk output of 240 tons in the Kaluga, Voronezh and Novosibirsk regions.

Another four plants with a total capacity of approximately 14,400 dairy cows (about 400 tons of milk per day) are already under construction in these regions and will be completed in 2018. The company's dairy cow herd is expected to grow to roughly 60,000 animals by the end of 2018.

The expansion includes staff, which has grown by 22% to roughly 5,000 employees since the beginning of the year.

Takeovers

Ekosem-Agrar said it has already taken over some existing farms this year and is in talks about further takeovers: The Group has been able to increase its agricultural land by a total of 48,000 hectares to approximately 248,000 hectares (+24%) this year. Further takeovers are currently under discussion.

In October, the group acquired a dairy including some 12,000 hectares of agricultural land and a dairy cow facility with roughly 3,000 cows in the Kaluga region. The takeover of another dairy in the Voronezh region is under way.

Having its own milk processing resources for butter, milk powder and long-life milk allows Ekosem-Agrar to respond flexibly to fluctuations in the raw milk market and to play an even more active role to strengthen its position in negotiations with food retailers, the company said.

The takeovers will increase the company's proceeding capacity from 40 tons to 390 tons per day.

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