“Declining sales and difficult markets in 2020” for Uelzena while sales slump in instant beverages

02 Jul 2021 --- Consolidated sales of €670 million (US$792 million) generated in 2020 were lower than expected and could not build on the good turnover of the previous year, says German ingredients supplier, the Uelzena Group.

A 5 percent growth in the raw milk delivered in the reporting year meant an additional raw material volume of 39 million kilograms. Raw milk accounted for a proportion of 687 million kilograms. 

A further increase over the previous year means that the processing volume is once again the highest in the company’s history. At €31.57 (US$37.34) cents/kg, Uelzena’s milk payout in 2020 fell short of the targets set by the company group. 

The payout value was also €2.22 (US$2.63) cents/kg below that of the previous year. 

Combined with the increased operating costs for the milk-producing companies, this is a negative trend that Uelzena says is doing “all it can to actively counteract in the current business year.”

Uelzena’s expansion & modernization
All sites received further investments as part of Uelzena’s modernization and expansion program, which resulted in a further increase in the fixed assets, notes the company.

A total of €144 million (US$170 million) was reported, which equates to an increase over the previous year of about €30 million (US$35.5 million). The good equity ratio achieved 38.5 percent maintained the previous year’s level. 

Necessary modernization and investment measures were implemented at all sites. Construction of the spray drying plant, the subject of detailed plans in the past few years, has started with the cornerstone ceremony taking place in the spring. 

Completion is scheduled for summer 2022. Despite the difficult economic situation of the site in Ratzeburg, the agglomeration plant was also completed and will be commissioned in 2021, says the Group. 

At the time the company expanded its spray-drying capacities, Anja Brand, brand manager, told FoodIngredientsFirst: “We will use the new spray tower for various contract drying projects of our customers. We will decide which of our spray towers is most suitable depending on the specific starting raw material and necessary drying processes. Our contract drying portfolio includes vitamins and minerals, plant extracts, flavors and ingredients for food.”

Sales slump instant beverages market
In the reporting year, sales were influenced by the effects of the COVID-19 pandemic, and the company’s five main product groups experienced difficult market conditions. 

The Instant Beverages division, in particular, was severely affected by the lockdown across Europe. Sales in the main product groups dropped by about 17,000 metric tons, with only milk powder recording an increase in sales of nearly 1,700 metric tons.

Edited by Gaynor Selby