Feeding needs

DLG (Dansk Landbrugs Grovvareselskab) is Denmark’s largest feeding stuff company with approximately 28,000 Danish farmers as members

Founded in 1968, DLG supplies Danish farmers with feed, cereal seed, fertilisers, agricultural lime, crop protection and much more for the day-to-day operations of the farming industry. Products are sold via DLG’s stores. The company currently has 21 main stores with 140 departments across the country. Production and sale of feed compounds are some of DLG’s most important activities.

The DLG Group has its own feed factories with an annual production of around DKK two million tonnes of feed compounds for pigs, cattle, poultry, horses and sheep. DLG is also one of Denmark’s largest exporters of brewing barley, cereal seed, feed and bread cereal, rapeseed and feed peas, and is, via the group’s affiliated companies, involved in the further manufacturing of natural crops. The DLG Group has a market share on the Danish feeding stuffs market of approximately 45 per cent.

Other major activity in the DLG Group is the food division, Agrova Food that makes and sells semi-processed vegetables and fruit for the catering and food service sector. And more and more the products go directly to the retail segment, for instance rapeseed oil, which has the same good conditions as the typical food oil from South Europe.

In addition, the company offers services such as telecommunications, energy and insurance. DLG’s telecommunications company, DLG Tele I/S grew its net customer intake during 2006 by increasing its customer base to more than 207,000 subscribers. This positive development was supported by a public survey in which DLG Tele’s customer service was voted one of the best in Denmark in mobile services.

Furthermore, DLG Service A/S, a company within the DLG Group, provides both private individuals and farmers the opportunity to purchase telephony, insurances and energy, as well as other products and services that are necessary for day-to-day operations. Through good contracts with suppliers and business partners, DLG Service provides its customers with the advantage of direct reductions on products and services.

The group also has a number of other affiliated companies, including Deutsche Vilomix, Vitfoss, Sejet Planteforædling, Kongskilde Industries, GASA Nord Grønt and HaGe. Deutsche Vilomix achieved the largest production figures to date in 2006
with approximately 57,000 tons of feed compounds being produced. The company also established a subsidiary in Russia, which started operations in April 2007. Vitfoss specialises in the production and marketing of premixes, as well as in vitamin and mineral compounds. This business has recently developed vitacaps – a completely new method for producing vitamins and minerals, which eliminates dust problems.

2006 was a good year for Sejet Planteforædling, as the company made a real breakthrough in many foreign licensemarkets. GASA Nord Grønt is also in a very strong position with several major producers deciding to let the company, Denmark’s leading sales organisation in fruit and vegetables, handle their sales. Lastly, DLG’s joint partnership with HaGe has been expanded considerably and the company is now in a good position to exploit new markets including livestock nutrition and logistics.

Throughout the past year, the DLG Group has also become involved in several areas of bio-energy production. In Lolland, Denmark, the company is building a minor rapeseed mill in collaboration with a number of local co-operative members. Its purpose will be to produce rapeseed oil, which can be used for heating purposes in the local area.

DLG has put a great deal of effort into product development in the area of feed. The company works closely with a number of farmers who test the compounds in practice, on their own herds. DLG offers all types of feed, from readymade feed mixtures and compounds to mineral supplements and soybean meals.

Quality control plays a crucial role in the physical and nutritional quality of DLG’s feed. It is important to farmers that the feed they buy lives up to specification, that they obtain the promised production results, and that their animals thrive and receive exactly the nutrients they need. In the product development, DLG places a great deal of emphasis on ensuring the welfare of the animals, which eat the company’s feed products.

To retain its position as Denmark’s leading feeding stuff company and to help improve its competitive edge, DLG places great emphasis on research and development. Through a sustained strategy for R&D, the organisation can secure its future competitiveness and as a result produce reasonable earnings.

Overall 2006 was a very positive year for DLG as it achieved its financial targets and delivered a profit considerably in excess of what had been budgeted. The company saw a significant increase in its international activities with Germany, Poland, the Baltic countries and Sweden being the main growth areas. At the same time, DLG implemented future oriented consolidation and structural adjustment in these markets. Today, as much as half of the DLG Group’s sales and earnings come from foreign activities. This demonstrates that the company’s internationalisation strategy is visibly boosting profits. The business has also strengthened its position in the domestic farm supply market with market share and earnings increasing.