AB Akola Group to construct €9.5m seed factory

AB Akola Group is investing €9.5m in a seed factory in Latvia.

The factory, which is expected to be operational by mid-2025, is being built by the subsidiary SIA Dotnuva Seeds on its own land in Iecava. The maximum annual capacity of the factory will be around 30 thousand tonnes of cereal and leguminous plants seeds.

“In the design of the factory, we plan to use a promising new seed preparation technology that will make seed production more sustainable. Colleagues recently visited a factory where this technology is already in use. It is brand new, and we are observing how they get on. We plan to design the factory’s infrastructure to use the technology and hope to apply the latest technology in our future factory sooner or later. We estimate that the investment will pay for itself in seven years,” says Mažvydas Šileika, the chief financial officer of AB Akola Group.

The future factory will have a total area of 4,550 square metres. It will include a production unit, a warehouse, and a two-story administrative building with a laboratory, office workstations, and technical facilities.

“The future factory will allow faster access to Latvian and Estonian farmers, shortening the logistics chain. We are working with as many as 30 breeders from different European countries, researching and introducing new varieties suitable for the climate of each country. Farmers will benefit greatly from the increased diversity of supply. We have foreseen the possibility of using promising new Swedish seed preparation technologies in production,” says Jonas Bakšys, a member of the management board of AB Akola group and CEO of SIA Dotnuva Seeds.

Last year, two seed production companies were set up in Lithuania and Latvia to strengthen the production of certified seeds. The seed factory in Dotnuva, Lithuania, annually produces around 27 thousand tons of ‘Dotnuva Seeds’ branded seeds. Seeds are traded by another subsidiary of AB Akola group, AB Linas Agro, headed by Jonas Bakšys since March.

The company sells certified seeds in all Baltic countries and exports some to other European countries. In the first half of the 2023/2024 financial year, which ended on 31 December, the company sold more than 20 thousand tonnes of seeds, an increase of almost 14% compared to last year.

“The demand for certified seeds is growing as farmers understand the returns these seeds generate. Today, we can sell more seeds than we produce. Five years ago, we produced around 20 thousand tonnes of seed within the year – even a little less than we sold in the last six months. We plan to produce around 20 thousand tonnes of cereal and legume seeds in Latvia annually when the factory starts up. If the market continues to grow, we will increase the factory’s capacity to 30 thousand tonnes of seeds,” says Bakšys.

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