Business Segment Food Solutions
Demand for milk powder from the chocolate industry is increasing slightly again after the Covid-19 slump. The situation in milk procurement has eased somewhat, which is reflected in higher milk receipts but unfortunately also in higher milk prices. The projects related to vegan products and those based on alternatives to cow's milk are on track. The development of functional semi-finished products is also taking shape, especially in the area of high-protein applications.
The Business Segment Food Solutions achieved net sales revenue of CHF 112.4 million in the first half of 2021 (–6.9 % compared to previous year). Net sale revenue for the previous year amounted to CHF 120.7 million, but included CHF 27.7 million turnover from Uckermärker Milch Ltd, sold at the end of March, and Marbacher Ölmühle Ltd, sold at the end of 2020. On a comparable basis, this resulted in solid organic growth.
In the first half of the year, HOCHDORF processed a liquid volume of 218.9 million kg (+16.5 %). The improved conditions of the successor solution to the "Schoggigesetz" meant HOCHDORF was able to offer milk producers better contract conditions and thus secure the necessary milk volume. Milk prices are rising in both Switzerland and the EU – as they have been in Switzerland for around four years now. This has a particular impact on the Group's gross margin.
Demand from the Swiss chocolate industry for milk powder is slowly increasing again. However, it has not yet reached the pre-pandemic level. If the Covid-19 situation remains stable, we expect the chocolate industry's purchase volume to be around the average of 2019 and 2020.
The first phase of the implementation of the whey competence centre in Sulgen has been completed and we have seen production of the first high-quality semi-finished products. Use in formulations for infant formula is already in full swing. This enables us to completely replace the purchase of certain semi-finished products. By processing whey in particular, HOCHDORF is also making an important contribution to reducing food waste.
The first trials in the area of vegan products based on alternatives to cow's milk and in drying cocoa plant components for applications in chocolate production are promising. They will be implemented on a large-scale plant for the first time in the second half of the year.
HOCHDORF now also dries high-quality goat's milk from Central Switzerland several times a year. In this context, we have decided to support the new Goat Trail themed adventure trail on Sattel-Hochstuckli as a gold sponsor (www.geissenweg.ch).
In the remainder of the year, we will continue to work intensively on the development projects and bring them to the market. The uncertainties related to Covid-19 continue to impact the business in sub-segments in the second half of the year, while rising milk prices can only be partially compensated by further efficiency gains and optimisations.