“In 2015, the total cultivated area in Romania is put at 5,500 hectares, from 6,350 hectares in 2014,” according to the company’s officials.
The Danish company cut its exposure to the local market last year after finding a buyer for 1,600 hectares it owned in western Romania. It continues to rely locally on two production centers in Banat and close to Buzau and plans to come to work 20,000 hectares in Romania by 2020.
Now, FirstFarms has receipts of a little less than EUR1,000 from each hectare worked in Romania, with a gross profit margin of 33%.
With a nine-year business history in Romania, the Danish company bought almost 5,100 hectares during this interval and has lease contracts for another 1,300 hectares. The company values its land portfolio of Romania at around EUR17 million, meaning an average of EUR2,600/hectare.
FirstFarms’ stake in Romania is related to the profit margins generated by grain and oilseed production in the context where land is even as much as ten times cheaper than in other European economies.
(English version by Catalina Apostoiu)