Danish FirstFarms records EUR 4 mln turnover in Romania, plans mergers with other Danish agricultural projects

Danish farming company FirstFarms, which owns 7,400 hectares of land in Romania, near Buzau, and cultivates some 4,100 hectares, ended 2011 with a turnover of some EUR 4 million, three times lower than in Slovakia, its other market, where it cultivates 8,300 hectares of land. The turnover in Romania doubled last year on 2010. FirstFarms made a profit before tax of EUR 1.1 million in Romania last year, compared to a loss the year before. The Slovakia market brought it a loss before tax, despite the higher revenues. The group's total turnover was of some EUR 17 million last year, 54 percent more than in 2010.

FirstFarms’ turnover primarily comes from milk production and field production, but Romania only brought revenues from the latter segment, while Slovakia contributed to both. The value of FirstFarms' land in Romania is at some EUR 19 million, at an average price of EUR 2,500 per hectare, according to its report. The average value of a hectare of land in Romania is of some EUR 1,900, while in Slovakia, it is of EUR 3,100.

The farming company expects Romania to take political measures that could limit or stop land purchases by foreign companies. “Foreign companies operating in these countries are exposed to political intervention, initiatives and actions that can influence their operation and business concept. Also, conditions like disturbances in the labor market and political unrest can affect companies operating in Eastern European countries,” according to FirstFarms' most recent financial report.

With 16 employees in Romania, FirstFarms is one of the Danish investors which together own some 32,000 hectares of land in the country. The company will seek growth through mergers with other Danish agricultural projects in Eastern Europe. Other Danish investors active in Romania are Ingleby, JD Agro Cocora and Jantzen Development.

Setting up a land bank with first refusal on agricultural land, which could then be leased to young people, might be a way to stop foreigners from buying up agricultural land in Romania, Agriculture Minister Stelian Fuia recently said. The minister also said Romania has little chance of blocking foreigners from buying land plots in the country after 2013, when the country is supposed to open its market, as agreed in the EU accession treaty.