BluOr Bank provides EUR 10.75 million in financing for the development of Latvian food producer Aloja-Starkelsen

Latvian food producer SIA Aloja-Starkelsen has concluded a financing transaction with BluOr Bank, securing EUR 10.75 million to support the company’s further growth and export development. The financing will be used both to refinance the company’s existing credit obligations and to increase working capital, enabling continued growth following the major production capacity expansion project implemented in recent years. The financing is also backed by a guarantee from the ALTUM Development Finance Institution, funded by EU funds, which served as collateral for the loan.

“Food production is one of the most important sectors of Latvia’s manufacturing industry, and its competitiveness is driven by companies that transform locally sourced agricultural raw materials into high value-added products. Aloja-Starkelsen is an innovation-driven manufacturer that is purposefully investing both in expanding production capacity and in developing new food solutions. We are pleased to support the company’s next stage of growth through this financing and, in doing so, contribute to the development of Latvia’s food industry, local agriculture and exports,” says Dmitrijs Latiševs, Chief Executive Officer of BluOr Bank.

In recent years, the company has invested several million euros in developing its production facility and equipment. This year, a major project is nearing completion that will enable Aloja-Starkelsen to double its potato starch production capacity from approximately 3,000 to 6,000 tonnes per year. At the same time, the company is also increasing the volume of pulse processing, primarily peas, with a further 20–30% increase planned in the near future.

“Increasing production capacity also significantly increases the need for working capital, as we purchase and process potatoes in autumn, while the starch produced is sold throughout the year. The financing secured will allow us to purchase more raw materials grown in Latvia, make full use of the expanded capacity and continue growing in export markets,” says Maurizio Decio, General Manager of Aloja-Starkelsen.

Although Aloja-Starkelsen is best known in Latvia as a potato starch producer, the company’s operations are considerably broader. They encompass four main areas: processing potatoes and pulses into food ingredients; developing new food product recipes and production technologies; representing other international food ingredient manufacturers in the Baltic States; and manufacturing consumer products under the Alojas brand and customers’ private labels.

Potato starch and pea protein concentrate remain Aloja-Starkelsen’s core products, but the development of new food product solutions is becoming an increasingly important area of growth. At the company’s ALOJAS Food Academy laboratory, food technologists work together with customers to develop recipes and production technologies for new products and, where necessary, also create the food ingredients required for them.

At present, there is particularly strong demand for solutions that increase the protein content and nutritional value of products, enabling the creation of higher-protein snacks, sauces in a variety of flavours, as well as plant-based alternatives to cheese and ice cream. One cheese alternative product developed in cooperation with a customer has already reached consumers in international markets and is showing rapid sales growth.

“Today, Aloja-Starkelsen is no longer just a potato starch producer. Our task is not only to supply food ingredients, but also to work together with customers to develop recipes and production technologies that make it possible to create nutritious and sustainable products that are also appealing to consumers in terms of taste and texture,” explains Mr Decio.

Alongside developing solutions for food manufacturers, Aloja-Starkelsen is also expanding its range of consumer products offered under the local Alojas brand. The range was recently supplemented with corn starch and icing sugar, as well as an experimental series of several types of spice blends. The company’s traditional product range continues to include vanilla sugar, baking powder and baking soda, alongside potato starch and organic potato starch.

Aloja-Starkelsen processes potatoes, peas and beans, using both conventionally and organically grown raw materials in its production. Approximately 98–99% of the agricultural raw materials processed by the company are purchased from Latvian farmers.

As potato starch production capacity increases, the volume of potatoes required by the company will also approximately double. The increase in raw material supplies has been planned well in advance in cooperation with the company’s strategic partner for agricultural raw material procurement, the Latvian grain growers’ cooperative VAKS. Farmers have prepared for the required increase in volumes in good time, and the potatoes intended for the new processing season have already been planted. The company’s growth will therefore simultaneously increase demand for raw materials grown in Latvia and expand sales opportunities for local farmers’ produce.

Aloja-Starkelsen products are exported to more than 20 countries. The main markets for pulse products are Central and Western Europe, while organic potato starch is sold in Europe, North America and Asia. New food product development projects are currently being pursued in Europe, Asia and North Africa. The company sees particularly strong growth potential in Asia, where potato starch consumption is high and there is significant interest in new food ingredients and technological solutions developed in Europe.

Aloja-Starkelsen publicity photo