KTG Agrar breaks through the 20,000 hectare mark
Farmland increased by 50 percent within a single year
Hamburg, 17 July 2008 – KTG Agrar AG has announced that its total farmland now exceeds 20,000 hectares for the first time. Between March and June of this year the company increased its total cultivable land by some 1,600 hectares. Meaning, as of 30 June, some 21,500 hectares are available to KTG Agrar and will be used for sowing in autumn 2008. This is equivalent to a 50 percent increase since June 2007. Siegfried Hofreiter, Chairman of the Managing Board of KTG Agrar, said: “This expansion shows that we have clearly strengthened our market position as a leading producer of agricultural commodities.”
The growth in total farmland has also entailed a higher percentage of company-owned farmland. The company has acquired 400 hectares in Lithuania. CFO Wolfgang Bläsi explains the rationale: “We will continue to purchase farmland primarily in Lithuania with a view to benefiting from future farmland appreciation”. Farmland prices in this EU member state are clearly lower than in Germany despite the high soil quality and the good rainfall pattern. In Germany the company took over two agricultural enterprises with a total of 1,200 hectares of farmland which breaks down into 1,100 hectares of land under long-term leases and 100 hectares of owned farmland. One of the two farms is located in eastern Brandenburg and the other one in central Saxony-Anhalt. The latter will become the company’s regional maintenance and management centre for the entire “Börde” region where the company meanwhile farms more than 2,000 hectares of land. Going forward, this centre will coordinate the optimum interaction of the surrounding farm operations between sowing and harvesting. In addition, the resident manager will also push ahead growth in the region by identifying and assessing potential farmland for purchase by the company.
KTG Agrar’s German farmland stretches from Leipzig in the south to Anklam in the north. Add to this the more than 4,000 hectares in Lithuania. This regional diversification is important in that it largely shields KTG Agrar against unfavourable weather conditions in specific regions. KTG Agrar intends to expand its farmland through purchases and leases particularly at and around its existing sites so that the benefits of large-scale farming can be exploited. The combination of regional diversification and large contiguous farmland holdings give the company a clear competitive edge which has also become evident during the ongoing grain harvest. Wolfgang Bläsi said: “Having previously announced our intention to grow dynamically in the current year and to boost our EBIT margin, we can now say that the development to date shows us fully on track towards meeting our goals.“