Lithuania. Pienas LT

The loan has been provided to finance the expansion of production facilities of the dairy cooperative, Pienas LT.

The cooperative mainly produces protein powder, native whey protein concentrate powder and milk powder, as well as cream cheese for export. According to the company’s estimates, its production accounts for approximately 8% of the overall milk protein market in the EU.

The expansion will double the company’s production capacity from 650 tonnes to 1,300 tonnes of milk per day. It will enable the admission of new members and unlock new growth opportunities, which is essential to meet the increasing global demand. After the implementation, the cooperative aims to grow its share in the Lithuanian milk market to 25 to 30% and to maintain its strong European market position.

NIB finances the expansion in cooperation with Luminor Bank.

Pienas LT is the largest vertically integrated dairy cooperative in the Baltic states. It has nearly 300 members and purchases nearly 16% of all the milk produced in Lithuania.

Productivity:

The investments will roughly double the production facility’s output capacity. They will also bring efficiency improvements through energy savings and improved logistics.

The expansion will also create around 100 new workplaces in the facility – a significant increase from the current 220 employees.

Moreover, it will support the development of Lithuania’s significant industry sector by increasing productivity which has been somewhat impacted by the relatively large share of small dairy farms, low level of automation and low value-added in the processing stage.

As a result of these developments, it is assessed that the loan will have a ‘good’ impact on productivity.

Environment:

After the implementation of the project, the wastewater output from the factory will generate an additional phosphorus and nitrogen load. Naturally, the capacity expansion will also increase electricity and natural gas consumption, resulting in an additional 12,000 tonnes of greenhouse gas emissions annually.

The project has therefore been rated ‘negative’ for its environmental impact.

Impacts indicators in relation to the investments:

• Milk processed, tonnes per day
• GHG emissions reporting
• Nitrogen load, tonnes per year
• Natural gas use, m³ per year

The increase of nutrients—primarily nitrogen and phosphorus—in waterbodies starts a process called eutrophication.

As a result of doubling the processing capacity of raw milk, the nutrient loads will increase significantly. However, the factory is connected to the municipality sewer networks, and the wastewater generated will be first sent to local treatment facilities before being released into the waterbodies.

Moreover, while the gas input and resulting emissions will be reduced at an intensity level (per kg of milk processed), the higher production output will increase the overall direct and indirect GHG emissions.