Danish Investors Accumulate Arable Land In Eastern Romania

Via Romania Insider, a report on how Danish investors are accumulating arable land in eastern Romania:

Agriculture group FirstFarms, controlled by Danish investors, has consolidated its position in the eastern part of Romania, where it owns silos with a capacity of 20,000 tonnes, by taking over lease contracts for 400 hectares of arable land, Economica.net reported.

The company thus reached a cultivated area of 21,000 hectares of arable land in Romania, of which it owns 10,000 hectares.

The new leases are concluded for ten years, and the value of the transaction amounts to DKK 2.5 million (EUR 336,200).

 The company estimates that the investment will have a positive EBIT contribution of DKK 0.5 million (per year) with full effect from 2021.

“Increasing the value of our land portfolio is a big part of our business model. With this acquisition, we will create synergies in our current areas of operation. FirstFarms has an in-depth knowledge of how land works and develops along with the purchase, storage and sale of crops. With this agreement, we further strengthen our platform, especially in eastern Romania, where FirstFarms has the silo capacity for 20,000 tons of crops,” said Anders H. Nørgaard, the company’s CEO.

This year, First Farms partially withdrew from the west of the country, where its business did not perform as expected.

The Danish investors have entered into a sale agreement for 1,675 hectares that they purchased between 2007 and 2008 and already sold 800 hectares in two stages.

Instead, they took over (paying with own shares) the company AIC thus getting 2,430 hectares and a silo of 6,000 tonnes. In 2019, FirstFarms reported a turnover of DKK 50.4 mln (EUR 6.7 mln) in Romania derived from cultivating approximately 7,600 hectares, of which 1400 hectares are leased.

Thus, 15% of the group’s total turnover was generated by the lands in Romania, FirstFarms also operating in Slovakia, the Czech Republic, and Hungary.

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About This Blog And Its Author
Seeds Of A Revolution is committed to defining the disruptive geopolitics of the global Farms Race.  Due to the convergence of a growing world population, increased water scarcity, and a decrease in arable land & nutrient-rich soil, a spike of international investment interest in agricultural is inevitable and apt to bring a heretofore domestic industry into a truly global realm.  Whether this transition involves global land leases or acquisitions, the fundamental need for food & the protectionist feelings this need can give rise to is highly likely to cause such transactions to move quickly into the geopolitical realm.  It is this disruptive change, and the potential for a global farms race, that Seeds Of A Revolution tracks, analyzes, and forecasts.

Educated at Yale University (Bachelor of Arts - History) and Harvard (Master in Public Policy - International Development), Monty Simus has long held a keen interest in natural resource policy and the geopolitical implications of anticipated stresses in the areas of freshwater scarcity, biodiversity reserves & parks, and farm land.  Monty has lived, worked, and traveled in more than forty countries spanning Africa, China, western Europe, the Middle East, South America, and Southeast & Central Asia, and his personal interests comprise economic development, policy, investment, technology, natural resources, and the environment, with a particular focus on globalization’s impact upon these subject areas.  Monty writes about freshwater scarcity issues at www.waterpolitics.com and frontier investment markets at www.wildcatsandblacksheep.com.