“This was an outstanding year. We’re almost sold out on our corn seed supply,” said Doriana Nitu, general manager of KWS Seminte, the local branch of the German producer, which posted EUR20 million in revenue last year. “It was surprising because we did not have as much as demanded. This was an atypical year for seed demand. We used to sell the bulk of our supply by the end of February, and now we finished in January. This was almost two months earlier [than usual] because of the very high demand.”
The Romanian farmers were interested in corn because the drought destroyed some of the rapeseed crops last fall.
Under the circumstances, some farmers replanted the plots in question with corn and sunflower. This is also showing in statistics, which reveal the amount of land planted with corn crops rose by 4% to 2.7 million hectares.
The farmers’ interest in corn over the last three years made KWS change its strategy.
Whereas in 2008 corn seeds accounted for about two thirds of the sales of KWS in Romania, now they account for 80%.
“We’re focusing on corn because it was the most profitable crop last year. Things were different in 2008 when corn was EUR65/ton. Back then, rapeseed and sunflower were the profit makers. The percentages have changed over the last two or three years,” said Nitu, who has been running KWS’ Romanian operations for twelve years.
Romania has one of the highest corn production potentials and the largest amount of land planted with corn crops in the EU. Farmers harvested 11 million tons of corn last year, which is the second highest output in the European Union.
Nitu said there is room for growth on the market still, which will happen in the long run though as a lot of land is worked by small farmers.
“Almost three million hectares are planted with corn in Romania, but only half of the seeds used are certified. Under the circumstances, the potential is there. Growth will not come on short term, maybe not even on medium term, it is very much up to the governmental policy and the farmers’ determination to team up.”
KWS, however, is already making preparations to meet future higher demand for agricultural seeds.
It completed a EUR15 million investment in a seed processing facility in Silistea, Braila County (SE Romania) last year that it started in 2007. One reason other than domestic demand for the investment was the export business, which generates 80% of the sales of the seeds KWS processes in Romania.
Nitu estimated this year’s revenue will go up by 25% to EUR25 million. The growth should come from both an increase in prices and in sales volume.
“The growth will come from the corn seed business. The market is growing and we, too, are gaining market share,” she added.
(English version by Loredana Fratila-Cristescu)