Germany: BayWa overcomes Russian ban, excess supply
German agriculture and renewable energy company BayWa AG (DE: BYW) has been able to find opportunities despite the challenges presented by Russian embargo, even though its European fruit business has been predominantly focused on one of the industry's worst hit crops - apples.
In a statement given to www.freshfruitportal.com, a company spokesperson said BayWa's share of exports to Russia ranged in the single-digit level before the ban.
"Therefore the German business of BayWa Group was indirectly affected by the ban due to the bumper crop in the EU and – as a result of this – by the lower price level," the spokesperson said.
"In the expiring season, BayWa achieved to market its volumes formerly sent to Russia to existing and new markets outside of the EU. Even so the effect of the embargo underscores BayWa's strategy addressing the need of diversification in sales and the further development of new markets possibilities.
"Regarding the lower harvest forecast for Germany in 2015 and the current price level, BayWa expects a positive situation for upcoming season on the domestic market."
In its first half financial results announcement yesterday, the company said the group benefited from a positive Southern Hemisphere apple harvest and the activities of New Zealand subsidiary T&G Global Limited, which strengthened its overall position by acquiring Apollo Apples.
"There were major rises in the sales of fruit. In Germany, the record-breaking 2014 harvest was sold off in full against the backdrop of more solid prices in recent times," the company said.
"Fruit trading revenues rose in the first half of the year to €295.9 million (H1/2014: €268.2 million). EBIT climbed to around €16.0 million (H1/2014: €12.7 million)."