Improved sales for organic BMI in Germany

German dairy Bayerische Milchindustrie has (BMI) reported an increase in sales of 9.2% or €55 million to €653 million in 2019. Thomas Obersojer, CEO of BMI notes, “In our three divisions, ingredients, fresh products and cheese, we were able to provide to the market, using our organic competence.”

The most important growth driver in the past financial year was the ingredients division with an increase of 24.7%, mainly driven by the sale of organic lactose and whey derivatives, especially to manufacturers of baby food (organic products and derivatives increased in sales by 21.4% to 23,800 tons (organic lactose even increased by 58%) and a flourishing international business. The division’s export quota is now 67.2%.

The whey powder business was dampened in the second half of the year by the slump in demand from China due to swine fever.
With an increase in sales of 3%, the fresh produce area developed satisfactorily overall. Due to the drop in prices, especially for butter, cream and low-fat curd cheese, sales in this division were 2.7% below the previous year.

The completion of the new 35,000 tons hard cheese production dairy in Jessen and other construction measures on site proved to be challenges. Among other things, the delayed commissioning of the hard cheese factory and the high-bay warehouse had caused considerable additional costs, which had a negative impact on the 2019 result.

Efficiency increases and financing at the expense of liquidity cushioned the additional costs in Jessen to such an extent that they did not have an impact on the balance sheet.

The target output of 100 tons/day in Jessen has been reliably achieved since April, so that the location now has an annual throughput of 500 million kg.

As a dairy with a strong share of sales and exports in out-of-home consumption, BMI’s business suffers from the coronavirus pandemic: for a time, a large part of sales of fresh products and cheese came to a complete standstill; prices plummeted and several plants hardly had any orders left. This situation could only be partially compensated for by the significantly increased demand in the food retail sector.

The two freshness and cheese divisions have been recovering rapidly since mid-May. Despite all the uncertainties, the BMI anticipates an increase in sales of around €700 million for the full year.

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