The construction of the Akola Group seed factory in Latvia will be financed by Swedbank AS
The Latvian company SIA Dotnuva Seeds, indirectly owned by AB Akola Group, has agreed with Swedbank AS on financing the construction and equipment of a seed preparation factory in Latvia. The loan amounting to 7 million euros was granted for ten years. AB Akola Group itself became the guarantor of the loan.
"We have entered a new stage of the group's development and are expanding our farmer service capacity in neighboring Latvia. In April, we opened a new agricultural trade and service center in Jekabpils, a modern workshop for servicing agricultural machinery, and a spare parts warehouse. A few days ago, we concluded a deal to acquire the Latvian grain trader SIA Elagro Trade. Investing around EUR 9.5 million in the seed factory project is another consistent step in Latvia. In addition to the new seed factory, warehouse buildings and site facilities in Iecava will be renovated. We are using our own funds for all these works, but a good financial partner is one of the most important components of the project," says Mažvydas Šileika, CFO of AB Akola Group.
“This investment marks new opportunities for Latvian farmers. The planned capacity of the plant will allow the company's products to reach Latvian farmers faster and reduce the company's logistics costs, which is important for further growth of the company. We are honored to be the financial partner of SIA Dotnuva Seeds in the next stage of development, which will cover the needs of farmers across the Baltics”, marks Jevgenijs Ivanovs, the Head of the Corporate Customer Division and Member of the Board at Swedbank.
Founded in Latvia in 2023, SIA Dotnuva Seeds laid a capsule in the foundation of the seed factory in Iecava in July this year. The 4,600 square-meter plant, operational next summer, is expected to produce around 20,000 tons of seeds a year in its first stage. These seeds will be intended for farms in Latvia and Estonia.
"The demand for certified seeds in the Baltic States is increasing as farmers realize their benefits. Both our seed production and trade in them are growing; in the financial year that ended in June, we produced 32 thousand tons of certified seeds for cereals, rapeseed, and grass mixtures at the seed factory in Dotnuva - more than our official capacity of 30 thousand tons is. And we sold even more – 35 thousand tons. A seed factory in Latvia will benefit both us and farmers - we will have faster service, lower logistics costs, and localization of plant varieties," says Jonas Bakšys, Member of the Management Board of AB Akola Group and CEO of Dotnuva Seeds.
SIA Dotnuva Seeds is directly managed by AB Linas Agro, the largest company in revenue owned by AB Akola Group and one of the largest agribusiness companies and grain exporters in the Baltic States. Linas Agro, which operates eight companies in the Baltics, has been supplying products and services to farmers for over 32 years.
About AB Akola Group
AB Akola Group operates the largest agricultural and food production group in the Baltics, with 4.9 thousand employees. The group operates along the entire food production chain from farm to fork, producing, preparing and marketing agricultural and food products, as well as supplying goods and services to farmers. The group's financial year starts in July and its unaudited revenue for the last financial year was EUR 1.5 billion. In addition to the seed factory in Latvia, the Group plans to launch two new factories for instant noodles and breadcrumbs in 2025.
More information:
Mažvydas Šileika, CFO of AB Akola group
Mob. +370 619 19 403
E-mail: m.sileika@akolagroup.lt
