The milk processing and ice cream production company “Food Union”, which includes the production centers AS “Rigas piena kombināts” and AS “Valmieras piens”, closed the year 2023 with a consolidated turnover of 150.2 million euros , which is +12% more compared to the previous period (127.8 million euros).
Gross profit increased +49% from 17.7 million euros in 2022 to 26.3 million in 2023. The company’s net profit in 2023 was negative in the amount of 1 million euros.
The increase in turnover in 2023 is related to a new sales strategy, especially in terms of export markets, while the increase in total profit is due to the reduction of costs in terms of key raw materials and resources energy Last year, the company managed to reduce losses from 4.2 million euros in 2022 to 1 million euros.
“Although the economic situation did not improve significantly last year compared to 2022, the costs of some resources remained and, therefore, our operations could change from emergency mode to a more predictable and predictable mode . In 2023, our attention was directed to a review of procurement strategies, further reductions in operating costs, investment projects that would ensure greater automation and energy independence, approach more powerful to conquer export markets, of course, than analytical work in our core business – revised product portfolio and development of new, innovative milk and ice cream products,” comments results 2023 Artūrs Čirjevskis, head of “Food Union” in Europe and Latvia.
In 2023, “Food Union” also started producing four different flavors of “Lakto” sub-brand fermented milk drinks “Lakto Imuno” without lactose, the production volume of “Lakto” brand products increased by 38% in 2023 compared to 2022. .
The summer season 2023 became one of the best in the last six years, with the total ice cream market in Latvia growing by more than +10%, and sales revenue “Food Union” up more than 14% in the summer a year before.
One of the biggest investment projects in 2023 was related to increasing the level of automation in production. By investing more than 2 million euros, “Food Union” purchased automatic packaging systems for ice cream, cottage cheese and cream cheese, which allows to increase the production capacity of these products, simplify manual or mechanical work, replace it with a solution. that meets today’s requirements.
The second largest investment project was the conversion of thermal energy production equipment to the use of other types of fuel in order to reduce the dependence on one type of energy, that is, the installation of equipment to prepare for the use of natural gas and liquefied gas (LPG) in making “Rigas piena kombinata” and “Valmiera pies”.
Responding to the continued interest of teachers and students of general education schools in how different milk products and ice cream are made, in 2023 “Food Union” created an educational and entertaining curriculum “Milk Class”. It is designed for children of elementary and primary school age as an interesting trip that takes place in the building “Rigas piena kombinat”. The concern intends to continue developing the direction of education for children and young people in the future as well.
In 2023, the management of “Food Union” continued to provide donations worth about 173 thousand euros, supporting Ukrainian refugees and Ukrainians in Latvia.
As previously reported, at the beginning of this year changes were made in the ownership structure of “Food Union”. As a result of the transaction that ended in March 2024, the other leading investment company in the world “PAG Private Equity” bought shares of the “Food Union” group of companies in Europe from the company’s founder and shareholders another private. The head of the “Food Union” group in Europe and Latvia, Artūrs Čirjevskis, continues to lead the work and prioritize streamlining the group’s production, review of the product portfolio and development of new products in the competence centers in Riga, strengthening of local brands with a wide range of marketing tools, more active expansion in export markets and existing product portfolio, as well as the creation of a new management team.
2024-08-08 13:23:14
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