AB Akola Group subsidiary increases investment in breadcrumb factory and borrows EUR 5 million
AB Kauno Grūdai, a subsidiary of AB Akola Group, has increased its investment in the breadcrumb factory, which it plans to build in Kėdainiai. The company, which has one breadcrumb coatings factory in the Kaunas region, will build a second and more giant factory. Once built, the production capacity will more than double to over 21 thousand tons per year.
"The investment was planned as early as 2022 and has since grown 1.5 times; the planned capacity of the factory has also increased. The total investment will amount to EUR 6.7 million; we will use our own and borrowed funds. SEB Bank has granted a EUR 5 million loan to Kauno Grūdai, most of which will be used to build and equip the new factory. The planned payback period of the factory is 6.7 years, and the EBITDA (earnings before interest, taxes, depreciation and amortization) of the breadcrumb coatings business is expected to increase by EUR 1.5 million to EUR 3.3 million annually," says Mažvydas Šileika, CFO of AB Akola Group.
A plot of land in Kėdainiai with a derelict building has been purchased for the construction of a new factory, which will be renovated and adapted to the needs of the new factory. The more than one hectare site will be used for production facilities, warehouses, and administration, as well as for all the necessary infrastructure. The factory should be operational by the end of March or early April 2025.
Currently, the production capacity of the Kauno Grūdai breadcrumbs factory in Linksmakalnis, Kaunas district, is around 800 tons per month. The new factory will have a breadcrumb production capacity of 1,000 tons per month, or almost 12 thousand tons per year. Once the factory is built, the Group's breadcrumb production capacity will total nearly 22 thousand tons per year. 24 jobs will be created.
"We have probably done a good job in sales, because we are one of the largest manufacturers in the region, and the production line in Kaunas is fully loaded - it works 24 hours a day. Customers are asking for more products; the order list is growing, and we have nothing to offer. The new factory will be operating 360 days a year to meet the demand of existing and potential customers. Breadcrumbs are a niche product, and practically everything we produce is exported. The Baltic countries are our home market, and last year, 87% of our production was exported outside the Baltic States," says Andrius Pranckevičius, CEO of AB Kauno Grūdai.
The main buyers of breadcrumb coatings from Kauno Grūdai last year were the United Kingdom, Poland, and Hungary.
“The Lithuanian food and beverage sector is one of the country's largest manufacturing industries and plays a key role in the national economy. This investment in Kėdainiai demonstrates the company's ongoing commitment to sustainable development, aimed at expanding its food product range to appeal to export markets in the UK, Scandinavia, and Southern and Western Europe. By financing an export-oriented food industry that utilizes local raw materials, we are adding value not only to the company but also to the country. We are pleased to contribute to the growth of this sector, the expansion of AB Akola Group's operations, and the development of the future breadcrumb factory," says Tadas Jonušauskas, Head of Corporate Banking Division at SEB Lithuania.
During the financial year ended 30 June, Kauno Grūdai produced 9.8 thousand tons of breadcrumb coatings, which are used to produce breaded meat, fish, vegetables and dairy products. It sold 8 thousand tons, and the Group's poultry companies consumed the rest.
About AB Akola Group
AB Akola Group operates the largest agricultural and food production group in the Baltics, with 4.9 thousand employees. The group operates along the entire food production chain from farm to fork, producing, preparing and marketing agricultural and food products, as well as supplying goods and services to farmers. The group's financial year starts in July and its unaudited revenue for the last financial year was EUR 1.5 billion. In addition to the seed factory in Latvia, the Group plans to launch two new factories for instant noodles and breadcrumbs in 2025.
More information:
Mažvydas Šileika, CFO of AB Akola group
Mob.
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