Dundaga Cooperative Society for Agricultural Services has decided to cease production of dairy products starting with July onward, as announced by the cooperative’s board chairman Jānis Zadiņš.
He explained that this decision was brought on by multiple factors, including high production costs.
He also mentioned that the cooperative’s production facility is located in the historical Dundaga Dairy Building, using which required additional financial investments in order to meet industry standards.
He said energy resource, raw material and other production-related costs have gone up, which has caused dairy product prices to go up. The rapid drop in residents’ purchasing power causes them to purchase alternatives and cheaper foreign dairy products.
Zadiņš explained that in order to resolve Dundaga’s short-term financial problems that appeared as a result of unforeseen circumstances, as well as to make sure the cooperative is able to complete its commitments, owners have decided to initiate a legal protection process.
“During this process the cooperative intends to sell its moveable and immoveable assets, including Dundaga Dairy Building, in order to repay debts to the State Revenue Service (VID) and other creditors,”
said Zadiņš.
He said the losses left from previous years reach EUR 108 863. The cooperative has fourteen employees at the dairy facility and 21 people in sales and marketing.
At the same time, Zadiņš admits members of the cooperative have plans to establish cooperation with agricultural services cooperative Laura. “This step will promote and strengthen the second-level cooperative Baltu piens, which unites ten fresh milk producing cooperatives, which have more than a thousand members together,” he said.
Kurzeme District Court explained to the media that Dundaga has coordinated a legal protection plan with its creditors. The plan itself needs to be submitted to the court by the 25th of August.
According to data from VID, as of Monday, the 26th of June, Dundaga owed VID a debt of EUR 53 422 in the form of unpaid administrative taxes.
According to information from Firmas.lv, in 2022 Dundaga operated with turnover of EUR 1.653 million, which is 11.4% less than a year prior. At the same time, the cooperative had profits of EUR 65 721 as opposed to losses the year prior.
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