German cereal products producer H. & J. Brüggen KG has become the co-owner of Latvian Rīgas dzirnavnieks grain processing company by acquiring 50% of their shares through a subsidiary, as confirmed by representatives of Rīgas dzirnavnieks parent company Dobeles Dzirnavnieks.
The deal needs approval from the Competition Council.
The price of the deal is confidential.
The deal concerns only oat grain processing, whereas flour and flour product production, as well as Rīgas dzirnavnieks brands Herkuless and Saimniece will remain under Dobeles dzirnavnieks. Dobeles dzirnavnieks will continue distributing Rīgas dzirnavnieks products in Latvia.
The company adds that from now on Rīgas dzirnavnieks will specialise on oat grain processing, whereas H. & J. Brüggen KG, as the company that has long-term cooperation with the biggest distribution networks in Europe and the world, will ensure the sales of products made in Riga on the global market.
Dobeles dzirnavnieks board chairman Kristaps Amsils stresses that the creation of a joint company will help strengthen cooperation between the two companies, promote Rīgas dzirnavnieks’ own sustainable growth and competitiveness of its products on the global market, as well as ensure stable grain processing volumes in Latvia.
He stresses that the company has had successful cooperation with H. & J. Brüggen KG for years, supplying the company with oatmeal and other cereal products produced in Dobele.
Amsill also mentions that specializing in oat grain processing will allow you to compete more successfully in the global market, expand the range of products and develop the production of new products, including high value-added niche products.
He is confident that through cooperation with H. & J. Brüggen KG, Rīgas dzirnavnieks will gain additional experience and knowledge that will help further develop Latvia’s grain processing industry.
The transaction for the establishment of the joint venture was concluded in cooperation with the law firm Spīgulis.
Minister of Economics Viktors Valainis stresses that the increase in foreign investment and exports plays a crucial role in promoting a faster economic development of the country.
Rīgas dzirnavnieks last year worked with a turnover of EUR 31.279 million and a profit of EUR 953 165. The company was registered in 1991 and has a share capital of EUR 6.579 million.
“Rīgas dzirnavnieks” produces grain processing products – wheat and rye flour, flour mixtures, flakes, rolled grains and groats for industrial consumers, as well as pre-packaged products for individual consumption under the brands “Hercules”, “Hercogs” and “Īsta saimniece”. The company is part of the Baltic Mill Group.
In turn, Dobeles dzirnavnieks operated with a turnover of EUR 237.505 million in 2023, which is 2.7% more than a year earlier, but the company’s profit increased by 77.7% and was EUR 12.172 million.
The company Dobeles dzirnavnieks was registered in 1991 and its share capital is EUR 3.897 million. The largest shareholder of the company is the Estonian grain producer Tartu Mill. The company’s main activities are the production of all kinds of wheat flour, semolina, flour mixtures, pasta, cereal flakes, groats and animal feed.