“Romania has a farming production, earth and weather similar to the US, but we also wanted to find a good company and a good managing team. We think the market has great potential,” says Peter Christianson, president and chief operating officer (COO) of Titan Machinery, a business worth $1.5 billion a year.
The growth potential of the local farming equipment market is obvious considering that at an arable surface of 8.3 million hectares Romania has a fleet of 175,000 tractors, while Poland, another eastern-European market, has 1.5 million tractors for its 14 million hectares of land, according to data of the Food and Agriculture Organization (FAO).
Another growth driver for the farming equipment market is the fact that half the tractors in the records of the Ministry of Internal Affairs are over 20-year old.
The interest of big corporations for Romanian agriculture is not surprising considering that local wheat and corn harvests have been on the rise in the past five years. Last year agriculture was a true “star” of the economy after Romanian farmers collected harvests worth over EUR20 billion, according to some estimates.
They want to sell 150 tractors
Titan Machinery Romania estimates it will sell around 150 tractors to Romanian farmers by the end of the year, as well as additional farming equipment, which could see the company’s sales climb to EUR40 million. The turnover forecast for this year is double that recorded by Agroexpert (currently Titan Machinery Romania) last year.
The 2012 target will be achieved in part by expanding the dealership network by four new units in Oradea, Roman, Iasi, and Constanta. The company currently operates two stores in Timisoara and Bucharest.
In Romania Titan Machinery sells farming equipment manufactured by Case IH, New Holland and Kobelco, which it imports from the US, Austria, and Italy. The price of a tractor ranges between EUR25,000 and EUR150,000, according to market information.
Titan Machinery estimates the local tractor market at 1,900 units.
(English version by Daniela Stoican)