The Berner Group’s development in 2015 was stable in spite of the significant challenges posed by the business environment. We invested in growth by developing our existing business operations and carrying out new acquisitions in line with our operating principles.
The economic climate in Finland remained difficult in 2015. According to the Bank of Finland’s forecast, the economy will barely turn to growth in 2015–2017, and the growth rate will be substantially slower than elsewhere in the euro zone. However, the economies of the Baltic countries have continued to see steady growth, which has been reflected on the development of Berner’s sales as well as our new investments in the Baltic countries.
A year of expansion and renewal
Domestic product development and production are among our key strengths. We believe that our customers value domestic, responsible and high-quality production. We developed many new products in 2015 to meet the needs of Finnish consumers. We launched new products in our well-known brand families—such as XZ, LV and Herbina—that were inspired by consumer wishes as well as the high-quality raw materials provided by Finnish nature.
In the agricultural supplies business, we continued to implement our new operating model. In the autumn, we agreed on an acquisition with HL-Vihannes Oy, a family business established in 1981. The seed, farming supplies and packaging business operations of HL-Vihannes Oy were transferred to Berner. The acquisition supports our growth strategy in the Farmer’s Berner business division. Expanding our product offering based on direct selling and e-commerce allows us to serve our farmer customers even better than before.
Later in the year, we took steps to prepare for startup cooperation that was subsequently launched in 2016. Berner is partnering in the development of the agricultural startup GrainSense. A spin-off of the VTT Technical Research Centre of Finland, GrainSense targets a global market worth more than a billion euros with equipment and cloud services based on optical technology. The products give farmers greater opportunities to monitor grain quality and influence pricing.
We also remained active in making acquisitions in Agency, which is the cornerstone of our business portfolio. We strengthened our Russian chemical import and export business by agreeing on an acquisition with Neuvox Oy. Established in 1988, Neuvox Oy has built an extensive network of suppliers and customers in Russia.The acquisition is further evidence of our willingness and capacity for renewal. It opens new opportunities in Russian trade and strengthens our broad expertise.
We expanded our brand portfolio in the Baltic countries in June. We signed an agreement with Renalko Kaubandus Oü, the leading cosmetics company in Estonia, that sees the Estonian import and distribution operations for COTY brands transferred to Berner. The agreement strengthened our position as one of the leading cosmetics importers and distributors in the Baltic countries. Berner is now the distributor of COTY brands not only in Finland, but also throughout the Baltic countries. COTY is a leading global cosmetics company with brands sold in more than 130 countries.
Digitization is changing our business
We intend to continue to pursue growth through acquisitions as well as organically, profitably and with a long-term approach. The rapid rate of digitization is challenging us to continuously improve our services regardless of the channel, time and place. Achieving success in this requires an in-depth understanding of the needs of consumers and our corporate customers.
I would like to extend my warmest thanks to our customers for the past year. Your success is the foundation of our success. I also want to thank our clients and other partners for their cooperation.