1.5 million for investments

Although the industry is currently facing challenging circumstances, we have resolved to allocate nearly 1.5 million euros next year for the expansion of ham and smoked sausage production.

“We observe a significant reshuffling in the ham market, and we believe that resilient companies will emerge stronger from this crisis,” stated Ragnar Loova, CEO of Nõo Lihatööstus. “Our focus extends beyond merely weathering the crisis; we are making substantial investments in process automation and environmental protection to ensure our strength post-crisis.”

In early 2024, we will invest 400,000 euros in expanding ham production. Over the subsequent year, an additional 400,000 euros will be directed toward expanding the production facility, with approximately 500,000 euros earmarked for increasing production volume and diversifying the range of smoked sausages.

Meanwhile, the meat industry’s production volume index continues to display a negative trend, decreasing by as much as 12.9% in the last quarter. “In 2023, the food industry is expected to stagnate at the 2020 levels. Low consumer confidence and retail sales persist at 2021 levels,” commented Loova. Meat producers are confronted with the choice of addressing efficiency and labour challenges due to lower production volumes or maintaining production volume and market share with reduced profit margins. A decline in domestic demand is prompting producers to explore foreign markets, although challenges arise as industrial production and retail sales are also declining in the EU.

Loova also highlighted the uncertain market conditions for raw materials: “Slight decreases in pork prices and holiday preparations are impacting raw material availability. However, pork prices remain 60% higher than those in February 2022.”