KTG Agrar increased its farmland by almost 40 percent to 25,000 hectares in 2008
“Agriculture remains a growth market”
Hamburg, 19 January 2009 – In 2008, KTG Agrar AG successfully continued its farmland expansion programme and consolidated its position as a leading producer of agricultural commodities. Having exceeded its 2008 full-year expansion target already at the end of September, the company acquired an additional 250 hectares during the fourth quarter, including 150 hectares in Lithuania and 100 hectares in eastern Germany. This brought the total volume of KTG Agrar’s 2008 farmland purchases and first-time leases to some 7,000 hectares. Six farming operations were taken over in eastern Germany. The company now has more than 25,000 hectares of farmland available for the 2009 season. This is equivalent to 250 square kilometres, up by almost 40 percent compared to the prior year.
KTG Agrar is a leading European producer of organic and conventional food crops such as grain, maize and rape. Siegfried Hofreiter, the company’s CEO, commented: “The year 2008 saw our total farmland grow by the equivalent of 11,000 football pitches. In the fourth quarter we focused on the integration of the new farmland and the acquired farming operations.” During the final months of the year the company renewed leases for some 3,000 hectares of farmland until 2020 and, in some cases, until 2025. “These renewals underline our sustainable approach,” underlines Siegfried Hofreiter. The average duration of the farmland leases is more than ten years. “This gives us a high level of planning certainty.”
The listed company is well prepared for 2009. “We have a solid equity capital ratio and are looking at continued growth,” says Wolfgang Bläsi, the company’s CFO. “We are facing strong support by our bank partners.” KTG Agrar aims at farming more than 30,000 hectares already in 2010, with the percentage of company-owned land rising from today’s 18 percent to 20 percent or more. To maximise the benefits of large-scale farming, the company intends to focus its growth on the regions where it already has a meaningful presence, i.e. in eastern Germany and Lithuania. Even so, KTG Agrar may also venture into new countries. “There are interesting areas for agriculture particularly in northeast of Europe. However, we will expand our operations only very selectively after careful analysis of the geographical conditions and legal frameworks,” says Siegfried Hofreiter. Key criteria include rainfall figures, soil quality and legal certainty. The company also plans to expand its biogas production activities which deliver stable revenues and attractive margins. KTG Agrar currently operates eleven biogas plants with a rated electrical output totalling 7.5 megawatts. “Agriculture remains a growth market and apart from our financial muscle we can also draw on more than 15 years of experience in large-scale farming. This is why we view the current crisis as an opportunity,” says Siegfried Hofreiter.