Hochwald 2019 statements show investment in facilities

By Jim Cornall

- Last updated on GMT

Condensed milk production. Pic: Hochwald
Condensed milk production. Pic: Hochwald

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In announcing its financial statements for 2019, German dairy cooperative Hochwald said it continued to implement its Hochwald 2020 Strategy.

Its strategic objective of paying an above-average milk price of €0.342/kg ($0.385) was achieved. At €1.53bn, sales revenue fell slightly. The export ratio was 45.9% (prior year: 45.5%).

Hochwald said dairy markets were calmer than in recent years, which were characterized by significant fluctuations in fat and protein utilization, and resulting market volatility. There was a worldwide slowdown in milk production, and a rise in global trade. Hochwald used this stable environment to focus on implementing its Hochwald 2020 strategy and closed the fiscal year with stable sales figures. Higher export figures were particularly due to increased sales in South-East Asia and Arabic countries.

Investments were made at the sites in Thalfang and Hünfeld during 2019. A fourth condensed milk line was installed in Thalfang. Further investments were made to expand capacity at the Hünfeld cheese plant. The construction of a new dairy in Mechernich is the biggest investment project in the cooperative’s history and is still on time and on budget, despite the coronavirus pandemic. The total investment amounted to €100.2m.

The Group’s equity increased from €190.7m in the previous year to €218.9m. Profit sharing certificates were issued again in 2019, with their volume rising by €19.1m. The equity ratio rose from 33.4% to 34.2%.

In 2020, the company said the coronavirus crisis has resulted in major challenges for the global economy, the dairy industry and Hochwald. In particular, restrictions on global transport, border closures and the catering industry shutting down have meant large quantities of milk could not be adequately processed and utilized.

Hochwald Group’s business model is mainly focused on worldwide trade, with only small volumes going to the large-scale consumer segment, which includes hotels, restaurants and staff canteens. Hochwald very quickly implemented the mandatory protective measures in both production and administration. There was relatively little disruption in supplying production plants with raw materials, consumables and supplies and delivering finished products.

Detlef Latka, CEO, said, “Our balanced marketing structure – with domestic and international trade on the one side and industrial products on the other – plus our broad range of dairy products means that, as far as we know at present, the Hochwald Group will continue pretty much on an even keel despite the crisis caused by the pandemic.”

Hochwald also acquired the Almil Group during the year under review. It said this investment will expand Hochwald’s trading capacities and ensure greater flexibility in its raw material flows.

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