Kesko

Market

In Finland, Kesko Agro and 91 K-maatalous agricultural stores form the K-maatalous chain. About half of the stores in the chain are combined with Rautia under the name “Rautia-K-maatalous”, or with K-rauta under the name “K-rauta-K-maatalous”. The K-maatalous chain's major customer groups are agricultural entrepreneurs (farmers) and contractors. K-maatalous provides agricultural entrepreneurs with solutions that help them efficiently produce the safe and pure foodstuffs that are valued by consumers.

The total Finnish agricultural market is valued at about €2.2 billion. There are two big operators: the Agrimarket chain of Hankkija-Maatalous is the market leader with a share of 46%, while the K-maatalous chain ranks second with a market share of about 35%. Valtra and Agritek are major competitors in the tractor trade.

Konekesko Eesti AS in Estonia, SIA Konekesko Latvija in Latvia and UAB Konekesko Lietuva in Lithuania are the Kesko Agro subsidiaries that are involved in the agricultural trade in the Baltic countries. The Baltic market is currently valued at €1.2 billion. The market share is about 20% in Estonia, about 25% in Latvia and about 7% in Lithuania.

Strengths

The K-maatalous chain's strengths in Finland include the K-maatalous retailers, who know the local customers and circumstances, and the wide product range combined with the comprehensive services and network. In the Baltic countries, its strengths include the position in the machinery trade and the comprehensive sales and service network.

The best-known product brands represented by Kesko Agro include Massey Ferguson tractors, Claas combines and forage harvesters, and the Tume and Elho agricultural implements made in Finland.

K-maatalous focuses on increasing its knowledge of the needs of future farmers. Active contacts and sales and the utilisation of data and information technology provide the basis for close cooperation between agricultural entrepreneurs and K-maatalous. The popular trade-in machinery service and revised web pages provide a wide range of information and services to farmers and other partners.

Kesko Agro and Rautakesko are working together to develop the combined Rautia- K-maatalous stores into forerunners in the sector. The chains aim to duplicate the best practices of individual stores throughout the entire chain and, in that way, improve customer service and operational efficiency.

The Cultivation Programme of K-maatalous provides solutions that improve the profitability of cultivation while meeting the needs of each farmer. The cultivation programme includes guidelines on the choice of seed, on fertilisation, on plant protection and liming. The K-maatalous Experimental Farm in Hauho does pioneering research and development for agriculture by testing plant varieties, fertilisation and protection.

The annual Kone-Forum exhibition is the most important event in the agricultural machinery calendar. Experts from K-maatalous assist customers in questions related to the use of machinery and in the planning of machinery purchases, while taking farm-specific needs into account.

Year 2008

In 2008, Kesko Agro's net sales were €846 million, an increase of 6.6% over the previous year. Net sales in the Baltic countries increased by 8.0% to €318 million. Kesko Agro's operating loss excluding non-recurring items was €3.5 million, which was €15.9 million weaker than in the previous year.

Objectives

The objective of K-maatalous is to improve its profitability in the agricultural trade. It will focus on developing the machinery trade and after-sales services in Finland and the Baltic countries. Another area of development in Finland will be the Cultivation Programme.

Kesko Agro's business operations were reorganised as of the beginning of 2009. The K-maatalous chain and the agricultural trade (agricultural implements, inputs and supplies, and the seed and grain trade) was transferred to Rautakesko, while the tractor and combine harvester business and the Konekesko subsidiaries in the Baltic countries were transferred to Konekesko. The subsidiaries have been registered as Konekesko Eesti AS, SIA Konekesko Latvija, and UAB Konekesko Lietuva.