Each of these silos has a capacity of 7,000 to 9,000 tons. The company has also completed a similar silo in Neamt County and already owns an 8,000-ton facility in Calarasi.
Alcedo intends to use this silo network to buy grain from the farmers in its customer portfolio. The project, which should cost EUR3 million to EUR4 million is intended to help ensure a steady flow of revenue, because part of the fertilizer and seed sales are actually barters for grain and to create a profit center by selling grain to multinational traders.
“We are doing this project not because we want to become a grain trader but because we need to collect the money from the market. We have small customers with 20 tons of grain, an amount traders will not buy,” says Nicolae Sandulescu, chairman of Alcedo and one of the founders of the business, in which Japan’s Sumitomo acquired the controlling interests more than a year ago.
“We get the goods at a good price and once we collect a larger amount we sell it to traders. We made EUR14 million to EUR15 million revenue from grain trade last year, but revenue depends on the market price.”
Plant protection products, fertilizers and certified seed distribution will remain the company’s core business, though.
Alcedo ended last year with EUR89 million revenue, up 18% on 2011 in an agribusiness sector worth several billion euros a year.
It expects this year’s revenue to go up to about EUR100 million.
“The growth came from the increase in consumption in our customers’ farms and from the consolidation of farming land. We’ve got customers who were farming 50 or 60 hectares fifteen years ago and are now working more than 1,000 hectares,” Alcedo’s chairman says. The company has a customer base of about 3,500 farmers.
On an agricultural market where many farmers have trouble getting loans from banks, Alcedo has recently introduced a program to indirectly finance the purchase of farming equipment by farmers. The company buys the piece of equipment selected by the farmer and then sells it to them at a price close to the dealer’s. The farmer then pays two installments a year for three years.
Alcedo is also making plant protection products in a plant in Giurgiu, where it invested EUR2 million eighteen months ago. The plant operated by Alchimex, a company of the group, shipped EUR20 million worth of products last year, according to Alcedo’s estimates.
“We sell both in Romania and abroad to Bulgaria, Hungary, Serbia and Azerbaijan,” Nicolae Sandulescu said.
(English version by Loredana Fratila-Cristescu)