Litagra, one of the Baltic region’s leading agribusiness groups, intends to transfer its trading business and grain elevator network in Lithuania and Latvia to Achema Group. The Litagra group, having decided to focus on production activities, will continue to run its primary farming production business – companies in Lithuania that cultivate more than 9,000 hectares of land and the feed manufacturer Joniškio Grūdai.
Litagra, the first company after state-owned Lietuvos Agrochemija to begin trading western agrochemicals 25 years ago, is taking a strategic step, Chairman of the Board and Founder Gintaras Kateiva said.
“We’ve decided to relinquish the trading business with annual turnover of 138 million euros and some 250 employees to a strategic partner who can build the most synergy in the Baltic market. The new arrangement will definitely change the business map and create additional value not just for farmers, but also for suppliers and employees,” Mr Kateiva said.
“In line with the long-term strategy of the concern, we’re expanding operations in one of our core areas – agricultural services business. Integration, after the transaction, of Litagra’s trading operations into the group of companies that the concern owns will strengthen the group company Agrochema which has analogous activities, broaden its activities, and complete the supply chain from the grain elevators to the Klaipeda port,” said Audrius Bendaravičius, the CEO of Achema Group and Chairman of the Board of Agrochema.
Achema Group intends to acquire Litagra group trading business and grain elevators network, i.e. Litagros Prekyba AB, with its Latvian subsidiary Litagra SIA. The previous owners will retain the name “Litagra”, though the acquired companies will be able to use it until 2019.
An agreement to that effect between Achema Group and Litagra shareholders Gintaras Kateiva, Invalda INVL group, and the investment fund Amber Trust II was initialled on 24 February. Completion of the transaction is planned after obtaining the approval of the Competition Council and carrying out other actions foreseen in the agreement, including the reorganization of Litagra.
The final amount of the transaction depends on Litagra’s financial indicators on the accounting date of the transaction and so will only be clear after the transaction is completed.
Litagra’s major shareholders –Gintaras Kateiva, the Invalda INVL group, the investment fund Amber Trust II and others – intend to continue strengthening the feed and primary farming production businesses.
Invalda INVL, one of the leading asset management companies, invested in Litagra in 2011, acquiring a 36.9 per cent equity stake.
“We think the funds we invested and our intellectual contribution have strengthened the company and had a positive impact on the growth of Litagra’s value. We’ve participated actively in preparing for the reorganization of the Litagra group and the mutually beneficial transaction with Achema Group. Litagra will continue to focus on production business where it can benefit from competitive advantages as a participant in the global food supply chain,” said Darius Šulnis, the President of Invalda INVL and a Member of the Board of Litagra.
According to Litagra CEO Aidas Mackevičius, the company is currently actively considering expansion opportunities in the primary farming production and feed businesses, including acquisitions.
“We’ve begun the construction of a 5-million-euro value cattle complex in Kalpokai. The decision on the investment was taken when dairy prices were at a low. We are convinced that modern dairy production at the right scale in Lithuania has good prospects and is globally competitive,” Mr Mackevičius said.
About Koncernas Achemos Grupė UAB
Achema Group is one of Lithuania’s largest business groups, uniting more than 40 companies with operations in Lithuania, Latvia, Estonia, Poland, Germany, France, Belgium, Finland and Sweden. Areas in which the group’s companies work include fertilizer production and agribusiness, cargo handling and logistics, energy, hotels, and manufacturing of confectionaries and packaging, as well as repair, engineering, design, security, insurance, media, and other services.
The group company Agrochema UAB is one of the country’s largest agribusiness firms and is actively expanding its operations in the Baltic countries. It has the subsidiaries Agrochema Latvia SIA in Latvia, Agrochema Eesti OÜ in Estonia, and Žemaitijos Grūdai UAB in Lithuania. The group of companies fo Agrochema has 257 employees.
About the Litagra group
The Litagra group today is one of the leading agribusiness groups in the Baltic countries. Its activities include the distribution of plant protection products, grain purchasing, and the production, cultivation and processing of primary farming products. The group’s companies are active in the local market (Lithuania, Latvia, and Estonia) and export to other markets including Russia, the Middle East, and Central Asia.
In the fiscal year 2015/2016, the Litagra group of companies had audited revenue of 155 million euros, EBITDA of 4.9 million euros, and a profit of 1.3 million euros. Beginning in 2016, for the first time in the group’s 25-year history, Litagra’s fiscal year changed: it now begins on 1 July and ends on 30 June of the following year. Results are published in accord with the new fiscal year basis beginning in 2016.
The group owns Litagros Prekyba AB (with subsidiary Litagra SIA), Joniškio Grūdai UAB, Litagros Žemės Ūkio Centras ŽŪB, and other companies.