For Lely, 2016 was a tumultuous year. The extremely low milk prices worldwide, which are on average below cost price, meant that many dairy farmers yet again suffered financially. As a result, investments were moved forward and takeovers were postponed. In the Netherlands, the uncertainty as regards the introduction of phosphate rights, also contributed to a wait-and-see approach among dairy farmers. This led to a comparable fall in turnover of around 10% for Lely as compared with 2015. The turnover came to € 502 million.
Despite the disappointing turnover results, 2016 also had some bright spots for the company. Growth in new markets such as Turkey, Japan and Russia was steady, and Dairy XL projects at dairy farms with more than 500 cows showed positive growth. The sale of the 100,000th Lely Lotus tedder was a special event for the company, as well as the successful takeover of Lely Turfcare by Royal Reesink.
There were also new products and concepts introduced in 2016, including a new line of Welger balers, the Discovery Collector manure-scraping robot for barns with a solid floor, the Meteor hoof-health approach, and new applications within the T4C (Time-for-Cows) management system, with which farmers can monitor the health status of their herd at all times.
Alexander van der Lely, CEO of Lely: “2016 was a difficult year for our customers and therefore for us too. The market conditions were particularly bad, and we have clearly suffered the effects of this over the last year. We have therefore focused on the one hand on cost savings, and on the other hand on our vision for the future, Route25. With Route25, we place an emphasis for the coming years on innovation, sustainability, and customer focus. Our goal is to become a future-proof organisation, with an ongoing focus on strengthening our market share and customer relations worldwide”.
Lely again expects an uncertain market in 2017, in which milk prices will continue to fluctuate. Within the Dairy segment, there are some positive aspects in the offing, although many customers will also suffer turbulent economic times over the coming year.
In 2017, the company will take further steps to achieve the strategic goals contained in the Route25 programme. Lely also continues to invest in the organisation’s cooperation, professionalisation and effectiveness, as part of which the uniformity of systems and processes within the group will be further improved.
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