AB Akola Group Expands Operations with New Breadcrumb Factory
AB Akola Group Expands Its Breadcrumb Production
AB Kauno Gr?dai, a proud subsidiary of AB Akola Group, is set to ramp up its investment in the production of breadcrumb coatings with the construction of a brand new factory in K?dainiai. The existing factory, located in the Kaunas region, has been supplying quality breadcrumb coatings, but this new venture promises to take production to the next level. Once operational, the new facility will double production capacity, enabling the company to produce over 21 thousand tons of breadcrumbs annually.
Investment Details and Financial Insights
The groundwork for this investment was envisioned as far back as 2022, but the scale has significantly increased, projecting a total investment amounting to EUR 6.7 million. This investment strategy blends both self-financed resources and substantial borrowing. Recently, SEB Bank provided a substantial loan of EUR 5 million, primarily earmarked for the construction and equipping of the new factory.
According to Mažvydas Šileika, the CFO of AB Akola Group, this factory is projected to achieve payback within 6.7 years. The expected EBITDA from the breadcrumb coatings business is slated to grow from EUR 1.5 million to an impressive EUR 3.3 million each year.
New Factory Construction and Operational Plans
The site in K?dainiai, selected for the new factory, currently has a dilapidated structure that will be renovated to fit the factory’s needs. This expansive plot, covering over one hectare, will host all production facilities, storage areas, administration offices, and essential infrastructure. The factory’s anticipated launch is set for the end of March or early April in 2025.
Current Production Capacity
At present, Kauno Gr?dai's facility in Linksmakalnis operates with a monthly output of around 800 tons of breadcrumbs. However, the forthcoming factory aims to boost this production significantly with a capacity of 1,000 tons monthly, adding nearly 12 thousand tons annually to the Group's total output. Once the new construction is completed, the total breadcrumb production capacity will soar to approximately 22 thousand tons each year, creating 24 new jobs in the process.
Market Demand and Export Opportunities
Andrius Pranckevi?ius, the CEO of AB Kauno Gr?dai, expressed confidence in their sales prowess, indicating that the existing production line in Kaunas is operating at full capacity, running 24 hours a day. The demand for their products continues to surge, leading to an ever-expanding order list the company is eager to fulfill. Customers are eagerly requesting more offerings, and thus the new factory aims to operate 360 days a year to cater to both existing and prospective clients.
Breadcrumbs, a niche market product, are primarily produced for export. Last year, it was reported that 87% of the breadcrumbs produced were sold outside the Baltic States, demonstrating a strong export strategy. Major buyers included countries like the United Kingdom, Poland, and Hungary.
Commitment to Sustainable Development
The investment in K?dainiai reflects AB Akola Group's steadfast commitment to sustainable practices while seeking to broaden its food product range for international markets, spanning the UK, Scandinavia, and regions in Southern and Western Europe. Tadas Jonušauskas, Head of Corporate Banking Division at SEB Lithuania, remarked that this venture not only adds value to the company but significantly contributes to the Lithuanian economy by leveraging local raw materials.
As part of its activities, AB Kauno Gr?dai produced approximately 9.8 thousand tons of breadcrumb coatings in the most recent financial year, catering to a variety of applications including breaded meat, fish, vegetables, and dairy products.
Overview of AB Akola Group
AB Akola Group stands out as the largest agricultural and food production conglomerate in the Baltics, employing a workforce of around 4.9 thousand. The group’s operational model spans the entire food production chain, from farming to marketing, ensuring that quality agricultural and food products reach consumers effectively. In the recent financial year, the group reported an unaudited revenue of EUR 1.5 billion. Looking ahead, the Group is also preparing to launch two new factories for instant noodles and breadcrumbs in 2025, further solidifying its presence in the market.
Frequently Asked Questions
What is the purpose of the new breadcrumb factory?
The new breadcrumb factory aims to significantly increase production capacity and meet rising customer demand.
How much has AB Akola Group invested in the new factory?
The total investment for the new factory is projected at EUR 6.7 million, which includes both borrowed and own funds.
When is the new factory expected to be operational?
The new factory is anticipated to start operations by the end of March or early April in 2025.
What are the expected annual earnings from the new factory?
The EBITDA from the breadcrumb coatings business is expected to increase by EUR 1.5 million to EUR 3.3 million annually.
Who are the main buyers of the produced breadcrumbs?
The main buyers were from the United Kingdom, Poland, and Hungary, with a significant portion of the production aimed at export.
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