A B Linas Agro Group plans to consolidate activities of goods and services for farmers and cereals supply In a company – A B Linas Agro. It is provided that AB Linas Agro will take over the activities of VSrop DKauno Division grudai and its obligations towards partners and customers from the second half of 2022.
Part of AB Kauno Grūdai’s team and assets will be transferred to AB Linas Agro in exchange for shares of AB Linas Agro in Kauno Grūdai. Most of these changes are expected to be implemented by July, when both companies begin the new fiscal year.
In mid-July last year, AB Linas Agro Group acquired majority stakes in AB Kauno Grūdai, AB Kaišiadorių Paukštynas, AB Vilniaus Paukštynas and related companies. After several months of performance analysis, a transformation plan was launched to strengthen each activity.
“When we acquired AB Kauno Grūdai, we anticipated that there would be transformations needed in the future as the two teams compete to supply goods to farmers. We do not take advantage of intra-company competition. For customers, the merging of product baskets promised a better product offer; thus, in the fall, the two companies began to cooperate to form a consolidated assortment. We are continuing on this path: separating the commodity business for farmers from Kauno Grūdai and transferring it with all assets and teams to AB Linas Agro. We hope to keep all the employees, because the two merged teams are strong. The future combined Farmer Goods and Services team is expected to provide leadership in the agricultural sector in the coming fiscal year. Instead, we want to make Kauno Grūdai a flagship in food production, developing new nutritious food products,” says Mažvydas Šileika, CFO of Linas Agro Group.
After transferring the farmer goods business from AB Kauno Grūdai to AB Linas Agro, Kauno Grūdai will become a shareholder of AB Linas Agro. Subsequently, it is planned to sell the assets of grain elevator owner UAB Kauno Grūdai ir Partneriai to AB Linas Agro after valuation.
“The transfer operation is not a simple act. Kauno Grūdai is a public company, so we can’t just withdraw an activity and transfer it to another company, we have to take into account the interests of its minority shareholders. We plan to carry out commercial assessments of several companies – AB Linas Agro, the crop-related business of AB Kauno Grūdai, and UAB Kauno Grūdai ir Partneriai, which owns grain elevators. With the assessments, which we entrust to the renowned audit company, we will be able to plan further actions, which must first be approved by the board of directors of AB Kauno Grūdai,” says Mr. Šileika.
To optimize its corporate structure, AB Linas Agro Group is also carrying out more subsidiary mergers: it is currently merging four companies that operate grain elevators and two land companies. Further transformations are planned in the future to simplify the structure of Linas Agro Group.
About AB Linas Agro Group
AB Linas Agro Group is the largest agricultural and food production group in the Baltic countries, comprising 75 subsidiaries and three associates operating in 8 countries and employing 5,398 people. The group operates across the entire food production chain “from field to table”: the company’s subsidiaries produce, process and market agricultural and food products, and also supply goods and services to farmers.
The group’s financial year begins on July 1. The consolidated turnover of AB Linas Agro Group for the financial year 2020/2021 amounted to 942 million euros and the net profit to 14.2 million euros.
In mid-July last year, AB Linas Agro Group acquired majority stakes in AB Kauno Grūdai, AB Kaišiadorių Paukštynas, AB Vilniaus Paukštynas and related companies. Following the acquisition, the consolidated turnover of AB Linas Agro Group for the three months of the financial year 2021/2022 increased by 84% to 440 million euros, the net profit increased by 199% to 12 million euros. In January this year, AB Linas Agro Group acquired UAB Agro Logistic Service, a trading company for raw materials and feed additives.
Additional information will be provided by:
Mažvydas Šileika, CFO of AB Linas Agro Group
Crowd. +370 619 19 403
Email [email protected]