Case 6.2: Ziedi JP - circular economy in a Latvian farm - Latvia
Name of the company: AS Ziedi JP
Country: Latvia
Size of the business: 100 employees
Website: https://skatskat.lv/virtuala-ture/lauku-seta/lv/kopskats/lauku-seta.html (virtual tour)
Background
The farm Ziedi is a family business. The farm was established in 1991 with family growing vegetables and flowers on 0.25 ha. In 1993, the management was taken over by another family member and in the following years, the area of agricultural land was expanded and the company’s operations were supplemented with new activities such as cereals, oilseeds, dairy farming and later biogas and fish production. Expansion was financed by commercial bank loans that were attracted for the development of the farm. The farm has been reorganized several times, adding other interconnected enterprises and changing its legal status. From 2018, it is a family-owned joint stock company Ziedi JP and the business is run by owners’ son and daughter. The family has been very energetic and active in gaining experience from around the world (especially from the EU countries, the USA and the New Zealand), supporting the entry of a new generation into the farm and developing more circular production. Funding opportunities after the EU accession have also played an important role in the development process.
Main activities
The main activities are agricultural activities (growing cereals and oilseeds, dairy farming), biogas production from slurry that is used for heat and electricity and for fish production. Fish farming mainly grows sturgeon, eel and caviar. Digestate, a by-product of biogas production, is used for own consumption. In addition, agricultural services are provided.
Market
As the farm is engaged in many activities, the target groups of the products are also different. Cereals and rapeseeds are sold to the cooperatives or processing companies, milk to the processing companies, electricity to the state-owned energy enterprises, and the fish products to the catering companies. Customers are reached in the traditional way, i.e. through direct contacts, negotiations and contracts.
Challenges and solutions
The biggest problems for the business development have been the short- and long-term financing. By using existing facilities, it is possible to increase milk production, as well as the production of fish products, but future plans depend on the ability to attract funding for investments. Future innovation lies in enhancing zero waste process and maximizing existing business results. The goals are to increase digestate drying and granulation for export and reach the intended capacity of 20 tons daily, and to intensify milk production and processing. There is a potential in using the excessive heat for new production opportunities to be set up nearby, i.e. greenhouses, to achieve more circular production.
Funding
The company has obtained bank loans for the development and used EU funds (European Agricultural Fund for Rural Development, European Maritime and Fisheries Fund) for variety of projects. In addition, annual agricultural direct payments and national livestock subsidies are used. The initial investment for establishing the circular production and biogas facilities has been more than 10 M EUR.
What makes this case innovative?
Unique aspect in this case is that the principles of circular economy are well presented in one farm as all the activities and branches on the farm are strongly interconnected and complement each other. Agricultural land is the beginning of production and also the end because the digestate returns to the soil as a fertilizer. One of the products of each industry is the beginning of the production of another branch, thus all raw materials are used in the production process without waste.
Other related Business Cases
Case 6.1: Energifabriken – fossil fuel free circular economy – Sweden
Case 6.3: Wapnö Farm – sustainability and the circular economy example in a Swedish farm – Sweden