Uelzena Turnover Impacted by Low Market Prices For Dairy Products, But Sales Volume up by 21%

06 Jul 2016 --- Dairy giant, Uelzena Group have announced a growth in all strategic areas of business, as well as increased milk processing, increased number of employees continued environmental improvements. However, low global prices for dairy has impacted business turnover, dropping 6% YOY.

Due to the dairy market situations, the Uelzena Group was not able to maintain last year’s sales level, with revenue falling by six percent to €526m. However, the sales volume for the main product groups rose by more than 21 percent.

The largest product segment with a 32 percent share of sales was milk powder, followed by butter and butterfat with 21 percent. The expanded sales volume for milk powder is the result of strategic cooperation of the four cooperatives that joined forces in the milk powder plant MTW Norddeutschland GmbH, Neumünster.

Anja Brand, Product Manager at Uelzena told FoodIngredientsFirst: "In our observation there are regular cycles of price fluctuations for dairy products and dairy ingredients (each 4 or 5 years). Actually the prices are very low but we expect them to consolidate and increase in the next months. And the volatility of prices is generally bigger since a few years. The actual low market prices will influence the milk producers and farmers because of the lower payment for the raw material milk and we expect them to decrease their milk production."

Non-dairy specialty products, which includes instant beverages, health foods and contract manufacturing, generated a six percent growth, with these segments now contributing to 21 percent to the overall group sales. Actions taken to the focus the business on these industrial customers are thought to have lead to the overall increase in sales.

The cheese, sweetened condensed milk and dairy products for the delicatessen industry products were cut back slightly because of market prices. Milk price payments had to be reduced by 8.4 ct/kg to 29.19 ct/kg due to the poor market situation in 2015.

Other successes were also reported. Milk processing increased, with 528m kg of milk processed and the delivery of milk raw materials rose by almost 4 percent to a new record high of approximately 528m kg. The number of employees also rose, increasing from 655 to 663.

In terms of environmental factors and sustainability, the Uelzena Group also reported success. Compared with the reference year of 2012, the wastewater volume was reduced by 14 percent, the wastewater load by 26 percent and CO2 emissions by 49 percent.

The company emphasized that these environmental improvements were highly important, stating, “an integrated business strategy aimed at sustainability does not only secure the broad acceptance of milk production but is also required for success in the industrial customer sector.”

They continued, “An increasing number of brand producers take sustainability criteria into consideration in the selection of their suppliers.”

Brand added: "We see a worldwide significant demand growth for foodstuff and food ingredients. Especially ingredients like milk powder and milk fat “Made in Germany” or “Made in Europe” are known and valued as quality products in foreign countries and the demand is still increasing. We are specialized as a supplier for industrial customers since decades now and therefore we are known as reliable partner for the food industry and a milk specialist. Our aim is to make our customers successful."

by Hannah Gardiner