Raisioagro is a modern agritrader and a familiar, reliable partner of livestock producers and contract farmers. Raisioagro's service concept covers the farmers' needs from feeds, fertilisers and seeds up to other farming supplies and fuel oils. Raisioagro is an innovative Finnish producer of effective, safe and environmentally friendly feeds for fish and livestock. The company provides its customers with professional feeding expertise and farming guidance services.
Main events in 2013
- Benemilk feeds have some 10% of the dairy cattle feed market in Finland.
- Benemilk product line was expanded to cover the most common feeding concepts used on Finnish dairy farms.
- Patent protection of the Benemilk feeds was complemented with new patent applications. Patent applications are pending.
- Competitors' building and introduction of additional capacity intensified the competition in all animal groups. With the investments, overcapacity in the feed production is increasing in Finland.
- Raisioagro developed a fish feed concept, Hercules LP Opti, which is already widely used in Finland. In feeds for rainbow trout, the fish oil from wild fish can now be replaced by ecological and more affordable rapeseed oil in such a way that the amount of healthy fatty acids of the fish remains in line with the intake recommendations.
- Sales in our partners' farming supplies and fuel oils increased in all sales channels.
- Visits in Raisioagro's online store rose considerably due to the product line extension. Online store provides grain and livestock farms with a comprehensive range of products conveniently and cost-effectively from one place.
- Shortage of Finnish oil plant seed resulted in cooperation negotiations in the oil milling industry. Measures taken in early 2013 to prevent the negotiations proved inadequate in the new situation. Raisio continues vegetable oil crushing but has laid off the factory personnel until further notice.
Raisioagro has a strong market position
Raisioagro's feed range includes cattle, pig and poultry feeds as well as feeds for laying hens and for salmon and whitefish farming. Cattle feeds account for more than 50% of Raisioagro's total feed volume. Raisioagro is the largest Finnish-owned feed producer.
Benemilk - Raisio's top innovation
Finland is Raisioagro's largest market area. In feeds for cattle and laying hens, Raisioagro's market share is just under 40%, in fish feeds above 50%. Benemilk feeds, Raisio's own top innovation, increase both yields and contents of milk. In 2013, Benemilk feeds had a market share of about 10% in dairy cattle feeds sold in Finland.
Our market share in feeds for pigs and poultry is about 25% of Finland's total market. Raisioagro has not joined the aggressive price competition brought about by the new production capacity built in Finland. Instead, the company has focused on maintaining high-quality of its feeds and top-class feeding expertise.
Raisioagro's main export market is Northwest Russia, where we mainly export fish and farm feeds. Our main export product is a fish feed called Hercules LP, which helps reduce phosphorous emissions of fish farming.
Our feed plants are located in Raisio, Kouvola and Ylivieska. Cattle feed production is centralised in Ylivieska and Kouvola. At Raisio factory, we produce feeds for pigs, poultry and fish. Sales season of fish feeds starts in spring and ends in late autumn. Our feed sites are located in key regions of the Finnish livestock production to ensure reasonable transport distances of raw materials and products.
Cattle feeds produced at Ylivieska feed factory. The factory, located in the largest milk production region in Finland, is one of the most effective production sites in Europe.
Changing business environment
Global factors increasingly affect Raisioagro's activities. We think it is important to develop new feeds and feeding solutions that help further improve the efficiency of livestock production. Efficiency improvement also improves the profitability of the whole chain and help protect the environment. Demand for animal protein is growing globally due to population growth and higher living standards.
However, growing demand cannot be met with current methods over the coming years. Some of the agricultural inventions have already helped to improve the efficiency of livestock production, but there is still potential for much more.
Livestock production efficiency possible to increase
Global factors also have an impact on the prices of grain, Raisioagro's key raw material. In industrial feeds, the share of grain has typically been high, two-thirds on average. We expect the grain price volatility to continue. Volatility in grain raw material prices has a direct impact on Raisioagro's net sales because it also affects the prices of end products.
New feed capacity intensifying competition
New feed production capacity built in Finland considerably intensified the price competition in all animal groups. Profitability of both milk and poultry production remained at good levels in Finland. Profitability problems in pork production continued and egg production turned into overproduction.
Last spring, major Finnish feed operators launched GMO soy containing pig and poultry feeds to complement their non-GMO feeds in order to meet customer needs. Some of the smaller feed producers have already for years used GMO soy in their feeds. Raisioagro also launched its alternative pig and poultry feeds containing GMO soy. With this change, our customers can choose the feeds they want to use. Part of the Finnish meat processing industry has used feeds containing non-GMO soy for competitive advantage.
As structural development in the Finnish agriculture proceeds, the number of farms continues to decline and the average farm size to increase. From Raisioagro, this requires an even deeper understanding of customer needs and environmental aspects as well as products that meet the farmers' needs.
Key figures for Raisioagro Division
|EBIT, excluding one-off items||M€||-0.3||2.6||1.3||-0.6||3.1||-0.3|
|EBIT, excluding one-off items||%||-0.5||3.4||1.9||-1.1||1.2||-0.1|