“The silo will become operational in two months. We will take over between 100,000 and 200,000 tons of grain and oleaginous seeds,” said Bogdan Chimisliu, manager of Biochem, with EUR26 million in revenue last year.
This is the first purchase of a storage unit by Biochem, which plans a similar move in Constanta county in the coming period to the end of increasing its receipts from agricultural raw material trade.
The value of the deal is put at between EUR1.5-2 million, according to market information. The current owner paid EUR30-40/ton for the installed capacity, a third less than the price entailed by raising a metallic silo of the same size from scratch.
The Dragalina unit was built in 1977, holds a 22,000-ton silo and a 20,000-ton warehouse. The silo and the warehouse have access to the rail, road transport and are located near A2 highway. In the past, the unit was also used by Swiss trader Glencore, according to market information.
“EUR600,000-700,000 investments are needed for the silo to become operational and to secure the link to the railway,” said Bogdan Chimisliu.
Romagro Cereal’s former silo is located in a strategic position for agricultural business, as well as in one of the hottest spots in terms of competition.
Calarasi county is a genuine “heart” of Baragan, one of the most prolific areas for grain and oleaginous seed production. Here, average production amounts to over 900,000 tons of grain and oleaginous seeds. The county is also the second most productive in agriculture after Timis.
The mirage of large quantities, as well as closeness to other productive counties, have drawn traders and food processors to this region.
French Expur set up a plant in Slobozia, Ialomita, US Bunge operates in Lehliu and entrepreneur Jihad El-Khalil is building a vegetal oil plant in Dragalina.
Competition in this area is the tighter as processors’ strategy differs from that of traders. While vegetal oil processors need constant raw material flows during the entire season, traders direct the bulk of freight to Constanta harbor to be delivered as gross product abroad.
The largest storage capacity in Calarasi is held by Bunge-Prio consortium, with a total 191,800 tons. Together, Expur and Bunge-Prio vegetal oil processors hold capacities of 286,400 tons, but which can be filled with only 160,000 tons of oleaginous seeds because of the low density of this product.
Instead, raw material traders hold silos and warehouses of 330,000 tons. Trading houses hold 20% and vegetal oil processors 16.8% of the overall storage capacity of Calarasi county.
Agriculture is heading to a new bumper season, considering preliminary estimates point to rapeseed output of 0.7 million tons, similar with that of 2013, and wheat production of 7 million tons, slightly down from last year.
(English version by Catalina Apostoiu)