KTG Agrar remains to profit from boom in organic foods
Margins for 5,000 tonnes of organic grain at the level of the record year 2008
Hamburg, March 4, 2009 – People want to eat healthy food also in a time of economic difficulties. This is the result of “BioFach 2009”, the world’s leading exhibition of the organic sector, which took place in Nuremberg between 17 and 20 February. This trend clearly benefits KTG Agrar AG, which produces organic crops on approx. 10,000 hectares. At the trade show, the agricultural company, which is headquartered in Hamburg, won contracts from renowned organic food producers for a total of 5,000 tonnes of organic grain from the 2009/2010 harvest. The contracts are worth approx. EUR 2 million.
The organic market in Germany has been growing dynamically for many years. In 2008, the market volume rose by roughly 10 percent to EUR 5.8 billion. Growth could have been even higher but was hampered by a shortage of commodities. As a result, record prices were achieved for organic agricultural commodities in 2008. “While prices have declined slightly in the meantime, our costs have, too,” says CFO Wolfgang Bläsi. “Our margins therefore stay at the level of the previous year.”
KTG Agrar has farmed organic produce since the mid-1990s. Demand from processors and food companies for large quantities of consistently high quality is huge. Thanks to its large land areas, specialisation on crops and standardised cultivation KTG Agrar can easily deliver this kind of quality requirements. “When we began to cultivate crops to strictly organic standards almost 15 years ago, people laughed at us. They thought organic products were only for traditional health food stores,” CEO Siegfried Hofreiter recalls. “But we stuck it out. Today, there is hardly a supermarket that doesn’t sell organic products.”
KTG Agrar expects the market for organic food crops to continue to grow. “Not all product groups have been tapped yet,” Siegfried Hofreiter explains. Organic meat and dairy products, for instance, are not available everywhere. The origin of the products also plays an important role. In the past years, demand in Germany has grown at a faster rate than the land available for cultivation, which has led to an increase in imports. “It is not always possible to guarantee the desired quality of imported products, especially when they come from non-EU countries. Our customers therefore appreciate our local production and our consistent quality management efforts,” says Siegfried Hofreiter. However, it is not only Germany but also other EU countries that offer excellent growth opportunities for KTG Agrar.