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The milk processing and ice cream production company “Food Union”, which includes the production centers AS “Rigas piena kombināts” and AS “Valmieras piens”, closed the year 2023 with a consolidated turnover of 150.2 million euros , which is +12% more compared to the previous period (127.8 million euros).

Gross profit increased +49% from 17.7 million euros in 2022 to 26.3 million in 2023. The company’s net profit in 2023 was negative in the amount of 1 million euros.

The increase in turnover in 2023 is related to a new sales strategy, especially in terms of export markets, while the increase in gross profit is due to a reduction in costs related to key raw materials and energy resources. Last year, the company managed to reduce losses from 4.2 million euros in 2022 to 1 million euros.

“Although the economic situation did not improve significantly last year compared to 2022, the costs of some resources remained and, therefore, our operations could change from emergency mode to a more predictable and predictable mode . In 2023, our attention was directed to a review of procurement strategies, further reductions in operating costs, investment projects that would ensure greater automation and energy independence, a more powerful to conquer export markets, of course, hard work was in our core business – portfolio revised product and development of new, innovative milk and ice cream products,” comments results 2023 Artūrs Čirjevskis, head of “Food Union ” in Europe and Latvia.

In 2023, “Food Union” also started producing four different flavors of “Lakto” sub-brand fermented milk drinks “Lakto Imuno” without lactose, the production volume of “Lakto” brand products increased by 38% in 2023 compared to 2022. .

The summer season 2023 became one of the best in the last six years, with the total ice cream market in Latvia growing by more than +10%, and sales revenue “Food Union” up more than 14% in the summer a year earlier.

One of the biggest investment projects in 2023 was related to increasing the level of automation in production. By investing more than 2 million euros, “Food Union” purchased automatic packaging systems for ice cream, cottage cheese and cream cheese, which allows to increase the production capacity of these products, simplify manual or mechanical work, replace it with a solution. that meets today’s requirements.

The second largest investment project was the conversion of thermal energy production equipment to use other types of fuel to reduce dependence on one type of energy, namely the installation of equipment to prepare for the use of natural gas and liquefied gas (LPG). in the production of “Rigas piena kombinata” and “Valmiera pies”.

Responding to the continued interest of teachers and students of general education schools in how different milk products and ice cream are made, in 2023 “Food Union” created an educational and entertaining curriculum “Milk Class”. It is designed for children of elementary and primary school age as an interesting trip that takes place in the building “Rigas piena kombinat”. The concern intends to continue developing the path of education for children and youth in the future as well.

In 2023, the management of “Food Union” continued to provide donations worth about 173 thousand euros, supporting Ukrainian refugees and Ukrainians in Latvia.

As previously reported, at the beginning of this year changes were made in the ownership structure of “Food Union”. As a result of the transaction that ended in March 2024, the other leading investment company in the world “PAG Private Equity” bought shares of the “Food Union” group of companies in Europe from the company’s founder and shareholders another private. The head of the group “Food Union” in Europe and Latvia, Artūrs Čirjevskis, continues to lead the work and prioritize streamlining the group’s production, review of the product portfolio and development of new products in the competence centers in Riga, strengthening of local brands with a wide range of marketing tools, more active expansion in export markets and existing product portfolio, as well as the creation of a new management team.

In the first nine months of 2024, the data center business turnover of the technology and innovation company “Tet” has increased by 16% compared to the same period last year.

The number of businesses that have started to use data center services more actively is also increasing, including retail, e-commerce and manufacturing. Customer interest in moving their company’s IT infrastructure to data centers and cloud computing platforms has prompted the expansion of the company’s global data center infrastructure and the start of work on several new projects.

From May 2024, “Tet” has expanded the geographical coverage of the Tet Cloud platform and enables customers to place their data in Germany as well, in addition to the existing data centers already in Riga.

“Such a strategic step was taken, taking into account the interest of customers in providing a safe and reliable data storage infrastructure outside of Latvia. The new infrastructure is receiving a good response among customers, as it provides a lack of geographical infrastructure more than 1,500 kilometers away from Riga and is located in one of the -the most powerful and secure data centers FR5, owned by the reliable and recognized international data center service provider Equinix. “, said Tet data center business development manager Māris Sperga.

Investing 30 million euros, “Tet” will start work on the construction of a new DC7 data center in Salaspils next year. The data center’s technological systems offer innovative cyber security solutions, as well as unique opportunities for customers to store data in high-performance computing equipment, providing a cooling capacity of 30 kW + per rack. The Salaspils data center is the first project in Latvia, in which the thermal energy generated from the operation of the center will be transferred to the company “Salaspils Siltums” and delivered to local residents.

The new cybersecurity directive NIS2 and the increase in cyber attacks on enterprise systems have increased the demand for secure data storage services.

“In recent months, more and more companies in Latvia, especially in the retail, e-commerce and manufacturing sectors, have started using external data centers or cloud computing platforms for data storage. Companies more often choose a single reliable service provider that provides both infrastructure options and data usage, as well as IT security services,” explained M. Sperga.

Companies are also more interested in the possibilities of using artificial intelligence (AI) to improve the efficiency of their work and create new solutions for business development. “Tet” has also started research in this regard to offer customers an infrastructure that will ensure that AI solutions are integrated into the company’s processes already in 2025.

This year, the situation in the wood industry is similar to the situation last year, Jānis Mierkalns, a member of the board of the wood production and trading company SIA “Pata”, told LETA.

He said there is still low demand in the export markets for soft wood products, which are used by consumers for building construction, renovation, repair work, as well as making furniture and decorations.

Similarly, the policy sector of the European Central Bank, the US Federal Reserve System and the Central Bank of Japan to slow the economy and reduce inflation is still felt. Although interest rates have been gradually reduced, which is slowly increasing the resources available to consumers and money in the market for development projects, no major changes are currently being felt.

He expected to see a real increase in demand only at the end of this year or in the first half of next year.

Mierkalns admitted that this was a difficult time for many companies in the forest industry, but it should be remembered that this is the detail of this industry. The forest industry is one of the pillars of Latvia’s national economy, accounting for about 20% of Latvia’s product exports. This means that the industry is very dependent on the global economy and its circulation.

Therefore, it should be noted that the number of logging operations has decreased significantly in recent years, which means that as the economy grows, a situation may arise where the demand is higher than the supply, leading to a significant increase in the final prices of goods.

He also noted that in the last two years, it was possible to organize nationally the issues that contribute to the competitiveness of manufacturing companies and the export of the industry in foreign markets. Organized issues related to getting cheaper electricity by disconnecting from AS “Sadales tīkls” and connecting to AS “Augstspriegumu tīkls” electricity transmission, access to qualified personnel, to special specialization in electronics and mechanics, as well as access to capital.

It is already reported that in 2023 “Pata” works with a turnover of 234,801 million euros, which is 29.7% less than the previous year, but the profit has decreased several times – to 1.639 million euros .

The company was registered in 1999, and its share capital is 16.135 million euros. Uldis Mierkalns is the sole owner of “Pata”.