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2019-05-31

KG GROUP 2018 results: stable growth of income and investments

In 2018 consolidated sales income of KG Group companies reached 523.7 mln. EUR. Compared to 2017, there was a 10.8% increase in income. A slightly higher increase –12.3% – was observed in investments: last year the group of companies invested 17.1 mln. EUR in development of production and renovation of units and equipment.

“Although last year was full of challenges, we managed to keep our sales at a stable level. We increased our production capacity and developed export sales of products, focusing on the European countries and the Middle East. We also achieved new markets. Growth of sales in the local market was recorded as well. Nevertheless, increasing costs of grain and growing import of Polish and Ukrainian production have a great impact on profitability,” Tautvydas Barštys, Chairman of the Management Board of KG Group summarises the annual results of the group of companies. As he notes, a unique structure of business helps to maintain stability. KG Group activities are divided into 12 autonomous businesses, which complement each other and guarantee the balance of results of the group of companies as well as the highest quality of production.

Kauno grūdai portfolio faced the highest growth of the business of instant products. Compared to 2017, income in this business increased by 46%. “The highest growth of the business of instant products is observed in export. Increase in the Western European market was the greatest, the growth also resulted from the emergence of new markets – United states of America and Qatar. Taking into consideration the rapid growth of business, last year we initiated construction of a new factory of instant products. One of our factories has been operating in Kėdainiai since 2011 and we are planning that the new one, located in Alytus, shall fully start its activities in June, ” tells T.Barštys, Chairman of the Management Board of KG Group.

The highest income in poultry business was generated by the sales of fresh meat. Growth was recorded in the sales of semi-finished meat products and nuggets. “We built one of the most modern European plants of meat nuggets and semi-finished products in Rudamina, Vilnius district in 2016. The factory, counting its third year of operation, is continuously increasing its production capacity which result from the growing demand of such products. The greatest increase of sales volumes was achieved in export markets – in the Northern, Western and Central European countries,” says T. Barštys.

As the Head of KG Group notes, it is becoming increasingly difficult to compete with the imported poultry in the local market. “Poultry imports from Poland are increasing. Competition for Poland is facilitated by the tax advantages which are absent in Lithuania. Also, production from the Third countries is imported to Lithuania. There is import from Ukraine, where they have quality requirements distinct from those applicable to the European Union states. Thus, we face unfair competition in the local market,” reveals T. Barštys.

In 2018, investments of KG Group reached 17.1 mln. EUR, this is 12.3% more than in 2017. “We are a business which has been operating for more than 120 years, with both, old and new production units. In general, we have been going towards transformation over the recent years – we set up new factories, renovate old units, introduce modern technologies. We purposefully focused on modernisation and development in order to be able to offer our customers a from field to table natural and high-quality product, which corresponds to their needs. This involves the largest investments as well as work of almost 3,900 of employees, working for our group of companies,” says T.Barštys, Chairman of the Management Board of KG Group.

As T. Barštys notes, the largest part of investments in Kauno grūdai portfolio is allocated to the construction of a new factory of instant products in Alytus. Another investment is renovation of liquid fertiliser storage and transmission system, located in Telšiai. In poultry business investments were focused on the renovation of poultry houses – 18 KG Group's poultry houses operating in Kaišiadorys district were renovated last year. Head of KG Group reveals that the group is planning similar investments in 2019.  The major part of investments is allocated to new factory of instant products in Alytus and modernisation of grain elevator in Radviliškis. Modernisation of poultry houses shall continue in poultry business, and there also intentions to purchase new packing machinery, which would ensure environmentally friendly packaging production.

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