Hochwald closes a difficult year and misses a strategic goal

On the one hand, the cooperative celebrated the happy fact that a large new factory in Mechernich was put into operation, but had to take the factory in Erftstadt out of production for weeks due to the flooding of the Erft and Ahr in the spring of 2021. That caused a lot of damage. In addition, the cooperative has to cope with a series of rapidly changing circumstances, such as sharply increasing costs, for example for packaging, logistics, additives, auxiliary materials and energy. The latter does not have to put pressure on the turnover so much as on the results.

Joint venture with Pinlive
What may have put pressure on reported sales, however, is the fact that the Kaiserslautern plant passed into the hands of a joint venture with a Chinese company. This company, Pinlive, part of the Pinwo group, and registered in Singapore, is also Hochwald's largest Chinese customer. Pinlive is reported to have invested €21,5 million in the joint venture with Hochwald.

Be that as it may, the Hochwald Group's turnover fell from €1651 million in 2020 to €1591 million in 2021. The milk price paid out did increase, because the milk prices as a whole rose, but Hochwald was unable to keep up with its fellow companies in the industry.

Sour apple
At €36,2 cents per kilo, the milk price paid out last year was exactly 0,1 cents below the national average in Germany. That is a sour apple for the members of Hochwald, because their cooperative usually pays well above the national average. 

Hochwald's management expects better results this year. Hope is also drawn from the increasing export to China in particular. CEO Detlev Latka: "By collaborating with our largest Chinese customer, we are strengthening our international orientation and maintaining our strong position in the growing Chinese market. We are consistently continuing our journey to become an international, sales-oriented milk specialist."   The total export percentage last year was 48%. 

Build Now
There is also a lot of optimism for the rest: "With the start of the dairy in Mechernich and the investments in our other factories, a whole series of construction measures as part of our strategy comes to an end. Now it is important that we build on the successes of the recent years and systematically further developing the strategy for Hochwald," said Latka. An above-average milk price is foreseen again for 2022. A group result before tax is also expected to be slightly above the long-term average.