FoodPacific Manufacturing Journal – July 2019

“We know the climate and environmental impacts of milk

production, and we are actively working to reduce them. My vision

is that dairy farmers and other agricultural operators can come

together and become a part of the solution to climate change and

the future food supply. As we work towards reducing milk’s carbon

footprint, we also want to introduce new points of view when

assessing food production’s climate impacts: the nutrition angle

should be considered when looking at the carbon footprint of food,”

said Hurme.

Proceeding in the right direction

The development of Valio’s business in 2019 has started with

a positive trend. Net sales growth early in the year has been fuelled

by, among other things, rising milk powder prices in the global

market. Valio’s three-year project to improve cost-effectiveness and

competitiveness and through them, the milk return, was started in

2018 and is proceeding as planned.

Notes

*Net sales less all other costs excluding the price paid to the owners for raw milk, interest on

shareholder loans, depreciation according to plan, supplementary payments to the pension

fund, pension contribution refunds, and items not included in actual business operations, such

as sales gains from sales of business operations, and provisions. The milk margin includes

taxes for appropriations, and the tax effect of Valio Ltd profit less the tax share of the net profit

corresponding to the amount of the average dividend percentage from the share capital.

** Milk margin less estimated required financing for investments, and the figure is divided by

the milk volume taken in from the owners of Valio

after a 14-year break. In summer, we renewed our Valio ProFeel®
range of protein products and introduced numerous new protein
snacks. Of our more traditional categories, basic milk products
continued to along a downward trend, consistent with market trends.
Our foreign operations produced a turnover of €669 million.
Valio’s growth continued especially in Sweden, the Baltics, Russia,
and China.
“In 2018, our turnover in Sweden grew by 10% thanks to
added-value products, such as lactose-free products. Our turnover
growth in the Chinese market was also strong. Valio remains an
unknown brand in China, and it takes time to build recognition and
create profitable growth. In Russia and the USA, we are focusing on
improving operational profitability. Development in these markets in
2019 has remained along those lines,” said Hurme.

Solving the climate challenge and promoting animal
welfare
Since the beginning of 2018, we began paying a sustainability
bonus of 1% per litre of milk to dairy farmers that commit to,
among other things, planned and preventive animal healthcare with
a veterinarian.
The Intergovernmental Panel on Climate Change (IPCC) report,
released in late 2018, brought global warming and the means to
mitigate it to the forefront. In October 2018, Valio set an ambitious
climate goal: we want to cut milk’s carbon footprint to zero by 2035.

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