KTG Agrar takes over 1,000 hectare farm
Geographic diversification continues with new farm in Thuringia
Hamburg, 26 July 2010 – KTG Agrar AG (ISIN: DE000A0DN1J4) has acquired a farm with an agricultural acreage of roughly 1,000 hectares in Thuringia, which will further expand its position as a leading agricultural company in Europe. Being KTG Agrar’s first farm in Thuringia, it contributes to the company’s geographic diversification. More than 20 locations between Thuringia and Usedom in Germany as well as in Lithuania, the Baltic EU member state, are an important factor that makes the company independent of regional conditions. “This has allowed us to reap a stable harvest even in relatively dry years such as 2006 and to benefit from rising agricultural commodity prices,” says Siegfried Hofreiter, CEO of KTG Agrar AG.
The company is optimistic about the 2010 agricultural season. While the volume will be a bit lower following the record harvests of the past two years, prices are much higher. At the commodity futures exchange, the prices of maize, rapeseed and grain have increased by about 20 percent in the past weeks. Says Ulf Hammerich, Board member in charge of KTG Agrar AG's agricultural activities: “This spring we have contracted a much smaller amount of grain, which means that we will clearly benefit from the latest price increases.” Rising agricultural commodity prices are usually followed by higher fertiliser prices. Accordingly, KTG Agrar has already covered most of its fertiliser requirements for the 2011 season at favourable conditions.
KTG Agrar now plans to continue its growth in Thuringia and to exploit the efficiency advantages of large-scale farming. Going forward, the acquisition and lease of new farmland in the region will be managed by the new farm, which is situated south-west of Erfurt. Like most farms in Thuringia, it has a large green space, which is ideal for the production of biogas, the current growth driver of KTG Agrar. “We have already begun to plan a biogas plant at the new farm,” says Dr. Thomas Berger, KTG Board member in charge of the biogas activities. "The plant will probably have an electrical output of 2 to 3 megawatts.” Construction is scheduled to begin in 2011. The company plans to have biogas plants with a combined output of 20 megawatts connected to the grid by the year 2012 and would thus almost double its current capacity of eleven megawatts.
At the same time, KTG Agrar will continue to expand its farmland. While most of the company’s farmland in Germany is leased under long-term contracts, most of the land in Lithuania is owned by KTG Agrar. Says Siegfried Hofreiter: “Good soil, high precipitation, legal certainty and short waterways to the main output markets mean that Lithuania has ideal conditions for farming. This is why land prices in the country have been rising for several years.” KTG Agrar acquired the first fields in the Baltic country in 2005. Since then, land prices have tripled to more than EUR 3,000 per hectare in spite of the economic crisis. Nevertheless, prices are still much lower than in east Germany (EUR 10,000) and west Germany (EUR 26,000). The added value potential for farmland in Lithuania and the new federal states is still high. KTG Agrar will continue to benefit significantly from the dynamic growth also in future.
About KTG Agrar:
With cultivable land of more than 30,000 hectares, KTG Agrar AG is one of the leading producers of agricultural commodities in Europe. The Hamburg-based company’s core area of expertise is the organic and traditional cultivation of market products such as cereals, maize and rapeseed. For organic market products KTG Agrar is the european market leader. The company mainly produces in Germany but has also operated production in the EU full member state of Lithuania since 2005. The third mainstay the production of bioenergy. At present, KTG Agrar operates biogas plants with a total capacity of around eleven megawatts. In the year 2009, KTG achieved a total output of EUR 59,7 million and EBIT of EUR 9.2 million. Since November 2007 the company is listed on the Frankfurt Stock Exchange and currently mote than 200 employees. Further information can be found at www.ktg.ag.
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Fabian Lorenz
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