23.02.2015 / 13:14

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KTG Agrar SE continues to benefit from trend towards organic and regional products

- Demand for organic products growing faster than land under organic cultivation - Deliveries of GM-free soy worth EUR 12 million agreed - New "Hofliebe" product line combines mega trends of organic cultivation and regionality - China showing great interest in food "made in Germany"

Hamburg, 23 February 2015. The mega trend towards organic food continues unabated. "More and more people choose organic products and also attach growing importance to their origins. Because organic does not necessarily mean regional," said Siegfried Hofreiter, CEO of KTG Agrar SE SE (ISIN: DE000A0DN1J4) after the BioFach 2015 fair. "BioFach has shown that our 'from field to plate' strategy is hitting a nerve. Our unique selling proposition of being able to offer products from the field to the supermarket shelf from a single source will now be highlighted more strongly also in the organic segment." At the world's leading organic food fair, Bio-Zentrale Naturprodukte, a KTG subsidiary, presented its current product range including the new "Hofliebe" product line. The latter offers a diverse range of products from soy oil to grains and flakes to muesli grown organically by KTG and bearing a clear seal of origin. "This unique combination of organic cultivation and regionality is what we call organic+". Thanks to the high demand for GM-free soy, KTG Agrar also signed framework agreements worth EUR 12 million at the BioFach fair.

On the occasion of the trade fair, Bund kologische Lebensmittelwirtschaft (BLW - association of organic food producers) again reported strong market growth for 2014, when sales of organic food and drinks totalled EUR 7.91 billion, 4.8% more than in 2013. According to BLW, the sales potential in Europe's largest organic market (approx. 30% market share) is far from being exploited in full. The limited regional supply is putting a damper on growth. At 2.7%, Germany's organically cultivated land again grew less strongly than the market as a whole. Being one of Germany's organic pioneers, KTG relies heavily on organic cultivation and can produce large quantities of organic food from the field of the plate.

The scarce supply of GM-free organic soy was one of the most discussed topics at this year's BioFach fair. Thanks to their high protein content, soybeans are popular not only as type of fodder but also as a foodstuff for human consumption - e.g. as a substitute for cow's milk and meat. As consumers reject genetically modified (GM) soy, the large producing countries outside Europe do not qualify as suppliers. This benefits KTG, which has built up a unique market position as a producer of GM-free soy over the past years and will harvest soybeans on more than 8,000 hectares in east Germany, Lithuania and Romania in 2015. A major portion of the soybean harvest is processed into 100% GM-free soy oil by KTG Agrar's own oil mill in Anklam. Going forward, the company intends to extend its value chain in the soy segment.

The above shows that the framework conditions for KTG Agrar, an organic food pioneer and leading producer in the heart of Europe, remain excellent. For over 20 years, KTG Agrar has specialised in organic and GM-free conventional farming. Increasingly often, the company processes its produce such as grain, maize, soybeans, potatoes and vegetables internally. To achieve this, KTG Agrar has invested in the extension of the value chain since 2011 under the "from field to plate" strategy. Today, the company processes 50% of its organic harvest internally. One third of the remaining 50% has been sold at good prices.

The positive start to the season was also highlighted by the company's successful participation in FRUIT LOGISTICA and the promising presentation of the "Die Landwirte" brand at this industry event. KTG Agrar is confident that it will be able to continue its growth in the food sector, with exports expected to make a bigger contribution going forward. "Having supplied the first products to China in 2014, we see great potential in the country for the coming years," said Reinhard Meiner, CEO of KTG Foods SE. "Healthy nutrition is playing an increasingly important role for the fast growing middle class. BioFach has also shown that interest is high-quality German food is growing strongly in China." 2014 saw KTG Foods almost double its sales revenues to EUR 100 million. This dynamic growth is to be continued in 2015.

About KTG Agrar SE With cultivable land of approx. 45,000 hectares, KTG Agrar SE (ISIN: DE000A0DN1J4) is one of the leading producers of agricultural commodities in Europe. As an integrated supplier, the company produces agricultural commodities and renewable energy and food. The Hamburg-based company's core area of expertise is the organic and traditional cultivation of market products such as cereals, potatoes, soy and rapeseed. For organic market products KTG Agrar is the European market leader. The company mainly produces in Germany but has also operated production in the EU member state of Lithuania since 2005. As a result of the takeover of Frenzel Tiefkhlkost and Biozentrale Naturprodukte, KTG has expanded the value chain by the production of food since 2011. In the year 2013, KTG achieved a total output of EUR 205.3 million and EBIT of EUR 23.9 million. Since November 2007 the company is listed on the Frankfurt Stock Exchange and had 775 employees at year end 2013. Further information can be found at http://www.ktg-agrar.de

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DGAP-News: KTG Agrar SE continues to benefit from trend towards organic and regional products