June 21, 2013

Ekosem claims title as Russia's largest milk producer

 

 

 

As it plans to lift its dairy herd to20,000 cows, and build on profits growth which is 42% last year, Ekosem-Agrar laid claim to the title of Russia's largest milk producer.

 

German-based Ekosem-Agrar- and which at the start of the year claimed third rank in Russian milk output - said that it had already lifted its herd to 16,830 cows from 15,500 at the close of last year.

 

Milk production had risen even faster, by 29% to 346 tonnes a day as of the end of last month, although output on northern hemisphere dairy farms tends to show a seasonal increase during the spring.

 

And the group, saying it was now "the largest milk producer in the country", added that it was to lift its herd to 20,000 animals by the end of 2013, growth supported by reaching a size at which it can rely on its own operations for new stock.

 

"Our cattle herd has reached a size which enables us to grow organically, such as without importing young animals," Wolfgang Bläsi, the Ekosem-Agrar managing director and chief financial officer, said.

 

The expansion at Ekosem, which operates in Russia as the Ekoniva Group, contrasts with a decline expected in Russia's overall herd, and milk production, this year, undermined by high feed prices lifted by last year's disappointing domestic harvest, besides the knock-on effects of US drought too.

 

Russian numbers of cows in milk will fall by 85,000 to 8.52 million head this year, USDA staff in Moscow believes. Indeed, Russia's dairy imports soared 25% in the first four months of the year, according to the US Dairy Export Council, which added that "Russia milk production is lagging year-ago levels - an indication that imports will continue".

 

However, Ekosem, besides its dairy herd, also owns substantial farming operations, with it arable holdings rising 10,000 hectares so far this year to 186,000 hectares last month, of which 101,000 hectares are owned by the group.

 

Meanwhile, the quest for supplies has been reflected in milk prices, which Ekosem pegged at €0.415/litre (US$0.55), up from a 2012 average of €0.398/litre (US$0.53).

 

Ekosem's comments came as it unveiled a 42% rise to €17.2 million (US$23 million) in operating profits for 2012, on revenues up 47% at €72.3 million (US$96 million).

 

Stefan Dürr, the group's founder and managing director, who remains majority shareholder, said: "Over the past years, we have made significant investments in the expansion of our dairy cattle herd, modern sheds, milking technology and farmland. The sharp rise in earnings in 2012 shows that we are on the right track."