Agriculture, EU – Baltic States, Financial Services, Foodstuff, Latvia, Markets and Companies

Latvijas Piens changed the closing date of its fiscal year from December 31 to June 30, adjusting to the fiscal year of Latraps agricultural cooperative which in March 2016 acquired a controlling stake in the dairy company. In the first half of 2016, Latvijas Piens raised turnover by 24 % against the respective period in 2015.

The dairy company’s management indicated that during the first six months of 2016 the prices of industrial dairy products – skim milk powder, butter and cheese – continued to decline, dropping to the lowest point in three years. This had an adverse effect on the company’s finances, resulting in additional losses and increasing its debt to Latraps for fresh milk purchases.

In order to process the purchased milk, in January 2016 Latvijas Piens concluded a milk processing agreement with Estonian company Tere and in May 2016 registered as VAT-payer in Estonia.

As reported, Germany’s Fude + Serrahn Milchprodukte has become the strategic investor of Latvijas Piens by acquiring a 75.1% stake in the Latvian dairy company from its majority shareholder Latraps. After the deal, 75.1 % of Latvijas Piens shares belong to Eximo Agro-Marketing, which is a subsidiary of Fude + Serrahn Milchprodukte, 14.5% belong to Latraps, 8.5% to dairy co-operative Dzese and 1.9% to agricultural cooperative VAKS.

Fude + Serrahn Milchprodukte has worked out an investment plan aimed at ensuring the Latvian dairy company’s development. The implementation of the plan will be launched already this year by Eximo Agro-Marketing, the German group’s food wholesaler in the Baltics.

According to information from Firmas.lv, Latvijas Piens saw its turnover fall and losses grow in 2015. The company’s turnover shrank from EUR 28.3 mln in 2014 to EUR 11.8 mln in 2015, and its annual loss expanded from EUR 1.2 mln in 2014 to EUR 2.4 mln in 2015. The company’s financial results for 2016 are not yet available.

Latvijas Piens is a company founded by Latvian agricultural companies in late 2012. Since 2014, the company has been focusing on making cheese.