More efficient cost management can bring stronger profits to the food industry

“Raw material costs account for approximately 40 percent of the expenses of food industry companies. That is why it is crucial for companies to optimize these expenses through vertical integration and efficient purchasing strategies. This not only serves to reduce costs, but also promotes long-term operational stability and increases profitability”

– highlighted Zoltán Demeter, Head of K&H’s Agricultural Business.

Another significant part of the costs belongs to operation and processing, which accounts for approximately a quarter of the total cost. In this area, energy efficiency, productivity growth and the implementation of strict cost control can help the most, which, however, requires automation and mechanization to the greatest extent possible. In addition to increasing productivity, the latter also increase the stable, predictable implementation of production and can alleviate the issue of the pressing labor shortage. Automation and mechanization, on the other hand, are capital and investment-intensive activities, for which the CAP II. Pillar subsidies can now provide significant assistance.

“If companies manage their costs effectively, it leads to increased profitability, which greatly increases their competitiveness and crisis resistance. Moreover, the income generated will provide the capital for future investments and developments, which is the key to long-term profitability,”

the expert added.