Casein annual report 2018

Sales/Production

Global market, especially Butter prices were favorable in 2017. 568.8 tons of casein was produced in 2017. It is 106.8 tons more, compared to 2016 production.

As always, EU is the major customer (another sales are also going to EU through intermediate companies). Very few sales are in Ukraine - for local adhesives producers.

In 2017 we got 8% of Ukrainian casein market.

Quality

The most important breakthrough in casein quality was fat content. By installing new separator for skimmed milk, we got better skimmed milk and therefore lower fat content in casein. High fat content in casein was loss for us and not good for our customers. So we are very happy to solve this issue.

Prices

Midsummer was a surprise since it had a drop in price.

2018 forecast

As always, production/sales volumes depend on prices. Firstly, on raw milk prices, which we should understand in late April. Secondly, casein market prices. Depending on these two factors, we can suggest two plans: pessimistic and optimistic. According to pessimistic plan, when casein price in not profitable enough to cover all the costs (mainly raw milk), we will produce 480 ton or less, which is 80 ton less than in 2017. If prices are favorable, our production plan for 2018 would be 600 ton.

Realistic plan is 560 ton (same as in 2017), prices are 5600-6100 USD (FCA), raw milk is +5% higher compared to 2017, ex rate is in range of 27-29 UAH/USD. Among other factors, which influence the casein market are: butter price, analog cheese price, milk powder price

It is expected to start production in March and make first deliveries in late April.

The report is prepared on Radyvylivmoloko LLC data and personal opinion of its’ employes. The report is a property of Radyvylivmoloko LLC. If mentioning the report, a link to it is a must.

Prepared by Serhiy Hrysyuk, A.One Account manager.

February 2018