Danish Agro says growth strategy paying off
Pre-tax profit for the year was €82m, while turnover reached €4.2bn, both were in line with earnings in 2016.
The group, which operates a number of agro-industrial companies in Denmark and abroad, and is now the sixth biggest agribusiness group in Europe, said a late harvest and trends in commodity prices meant a fall in agribusiness turnover, but that loss was compensated by increased activity within the machinery sales division.
It said its overall focus in 2017 was on consolidation, particularly on how it could exploit efficiency and synergies between countries and companies.
The group reported a strengthening of its international position in 2017. In April, it acquired Finnish retail company, Eepee, a move aimed at bolstering the group as a partner for Finnish farmers in western Finland. In October 2017, its subsidiary in Sweden, Sweidsh Agro, purchased agribusiness, VärmLant AB, with the goal of gaining greater access to Swedish farmers, while its specialist feed divison, Vilomix, expanded its activities in Poland in January last year, taking a majority stake in premix and vitamin specialists there, Blattin Polska.
Group CEO, Henning Haahr, said the long-term goal of the group is to make its premix and vitamin sales into a global business.
He said that the remainder of 2018 will be about consolidation, and that no major acquisitions are anticipated.
Latvian deal
Last month, we reported on how the Danish Agro subsidiary, Baltic Agro Latvia, had acquired 60% of the shares in agribusiness and specialist feed company, Tukuma Straume, located near Riga in Latvia. The deal includes an agreement to acquire the full company – the remaining 40% of shares - at a later stage.
Tukuma Straume has 85 employees and is active within traditional agribusiness, feed production and grain intake.
Both the extended grain storage and compound feed capacity of that Latvian company appealed, Haahr told us then.
While Baltic Agro has significant, well established production facilities in Latvia, its existing compound feed infrastructure is at full capacity so the acquisition will alleviate pressure in that regard, he added.
Danish Agro has had a presence in the Baltics since 2006. “We are the market leader there. We have total sales of over €700m if we consider the agribusiness and the machinery business combined.”
In terms of further asset building in that region, the CEO said: “We have a strategy around the Baltic Sea area countries meaning Denmark, Norway, Sweden, Finland, Estonia, Latvia, Lithuania, Poland and the north part of Germany. We follow closely what is going on there, to see if there is any acquisitions of interest.
"At the moment though, we are mainly focused on consolidation and utilizing synergies across the existing activities in the group."
Danish Agro businesses include feedstuff mixes, ingredients and vitamin mixes, fertilizer, crop protection, seed and energy, plus the purchase of crops from farmers. The group is also a distributor of a number of farm machinery brands, and runs a chain of hobby and leisure retail outlets. Owned by 10,500 Danish farmers, the cooperative has 4,500 employees.
The group produces about 3m tons of feed each year.
