Akola Group Secures Financing for Seed Factory Expansion
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AB Akola Group Partners with Swedbank for Seed Factory
Recently, SIA Dotnuva Seeds, a company under the AB Akola Group umbrella, has reached an agreement with Swedbank AS to secure financing for a cutting-edge seed preparation factory in Latvia. This exciting venture is backed by a substantial loan of 7 million euros, which will be repaid over ten years. The AB Akola Group has taken a proactive role in this project by guaranteeing the loan.
Expanding Farmer Services in Latvia
As the AB Akola Group progresses into a new phase of development, the focus is on enhancing support for farmers in Latvia. The company has made significant strides, including the recent opening of a modern agricultural trade and service center in Jekabpils. This new facility includes a workshop specifically for servicing agricultural machinery, along with a comprehensive spare parts warehouse. In addition to these advancements, a strategic investment of approximately 9.5 million euros into the seed factory project signals a determined effort to grow operations in Latvia. Alongside the construction of the seed factory, renovations will look to enhance warehouse buildings and site facilities in Iecava. While these developments are being funded through internal resources, having a strong financial partner like Swedbank is crucial to the project's success, according to Mažvydas Šileika, CFO of AB Akola Group.
New Opportunities for Farmers
According to Jevgenijs Ivanovs, the Head of the Corporate Customer Division and a Member of the Board at Swedbank, this investment opens up exciting new possibilities for farmers across Latvia. The new seed factory will significantly improve logistics, allowing for more efficient product delivery to local farmers while reducing operational costs. Such improvements are vital for fostering growth at the company.
Details of the Iecava Seed Factory Project
SIA Dotnuva Seeds officially began construction on the seed factory in Iecava, which is anticipated to start operations next summer. Covering an area of 4,600 square meters, this facility is set to produce around 20,000 tons of seeds annually during its initial phase, mainly catering to farms located in Latvia and Estonia.
Rising Demand for Certified Seeds
There has been a notable increase in the demand for certified seeds within the Baltic States, which reflects a growing awareness among farmers of their benefits. In the previous financial year, SIA Dotnuva Seeds exceeded its production goals by generating 32,000 tons of certified seeds for cereals and other crops, surpassing its official capacity. Even more impressive, the company recorded sales of 35,000 tons, highlighting the thriving market for their products. Establishing a new seed factory in Latvia promises to enhance service speed and minimize logistics costs, effectively benefiting the farmers served by the company, as emphasized by Jonas Bakšys, CEO of Dotnuva Seeds.
The Role of AB Linas Agro
AB Linas Agro plays a pivotal role in the management of SIA Dotnuva Seeds. This company is recognized as the largest revenue-generating entity affiliated with AB Akola Group, marking its significance in the regional agribusiness landscape. With over three decades of experience, Linas Agro has firmly established itself as a key provider of products and services for farmers across the Baltics.
About AB Akola Group
The AB Akola Group stands as the leading agricultural and food production organization in the Baltic region, employing approximately 4,900 individuals. The group's operations encompass the entire food production chain—from farming to the final consumer—producing, preparing, and marketing food products. Their unaudited revenue for the last financial year was around 1.5 billion euros. Looking ahead, the group has plans to expand further with the anticipated launch of factories focusing on instant noodles and breadcrumbs by 2025.
Frequently Asked Questions
What is the purpose of the new seed factory in Latvia?
The seed factory aims to enhance seed production capacity and improve service delivery to local farmers.
How much financing did AB Akola Group secure for the project?
AB Akola Group secured a loan amounting to 7 million euros, guaranteed by the group itself.
What products will the new factory produce?
The factory is expected to produce around 20,000 tons of certified seeds annually, primarily for farms in Latvia and Estonia.
How does this investment benefit farmers?
The investment will enable faster product delivery and reduced logistics costs, directly benefiting farmers in the region.
What future plans does AB Akola Group have?
In addition to the Latvian seed factory, the group is planning to launch factories for instant noodles and breadcrumbs by 2025.
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