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RDF Arad, one of the most important local players in the agribusiness sector, reports a considerable growth for 2020, of 65% and 45 million lei respectively, thereby obtaining a net profit of 4.3 million lei. The growth is due to a series of investments made this year, among which: doubling its cereal storage capacity, from 10.000 to 20.000 tons, increasing the processed soil areas from 500 hectars in 2019 to approximately 2.000 hectars at present, as well as starting a digitization process for agricultural holdings, in order to turn to precision farming, according to RDF, the company in which ROCA Investments holds 40% shares since november 2019.
“In 2020 we had a turnover of 114 million lei compared to 69 million lei in 2019, and we reached an EBITDA of 4.3 million lei against the negative EBITDA of 2019, previous to the time when ROCA became a shareholder. RDF chllenges for 2020 were not related to the COVID crisis, but rather to the scaling plan, which also required a reorganization of all company activities. We started to put into play an investment project of 2.5 million euros, we started implementing an ERP system for activities management, we reorganized each line of business, applied new procedures, hired competent people in key positions. As for the agricultural production, in the agricultural year 2020-2021 we increased the surface of agricultural exploitation to 2000 hectars, in comparison to only 500 hectars in 2019, when ROCA became a shareholder” said Florin Deznan, CEO at RDF Arad.
RDF also made investments aimed at changing the entire infrastructure, by changing the sewage system, replacing and repairing over 12,000 m2 of concrete platforms, and completely renovating the storage areas and the company headquarters. It supplemented its agricultural equipment fleet with new, modern equipment for soil management. Moreover, RDF has restructured the operational system of the company, by building complete, highly performing departments and has implemented modern assessment systems and incentives.
“Agriculture is among the sectors which were most affected by the health crisis, and many companies preferred to reduce costs. In RDF we perceived the crisis as an opportunity for change, for investments, in order to increase competitivity, and the results speak for themselves” said Alexandru Savin, member in the Board of Directors of ROCA Investments. “Romania could feed over 80 million people, but today is far below its real potential. National programs for implementing the necessary irrigation technology and cultivating land from unfavoured areas could place our agriculture on a higher level and would enhance the competitiveness of our country.”
In 2021 the company shall again take advantage of its four lines of business, which are: agricultural inputs sale, cereal trading, agricultural production and flour milling and bakery products, and estimates a growth of around 20% turnover compared to 2020, as well as an EBIDTA growth of around 50% against the same reference. Also, RDF has an investment project for the acquisition of a new cereal warehouse, in order to increase our capacity from 22,000 tons to around 40,000 tons, along with the acquisition of new agricultural equipment.
The agricultural sector in Romania
As for the agricultural sector, the CONFIDEX Q4 report made by Impetum Group shows that it is among the most affected by the pandemic. The CONFIDEX index, which assesses agricultural managers’ trust on a scale of 0 to 100, is set at 45, two points over the level of Q2 and Q3, unlike other industry sectors where managers reported a higher increase of trust. At the same time, according to the report, agricultural managers showed their preference for costs reduction, rather than for an increased productivity in Q4.
During the CONFIDEX debate of March 11, Prime-minister Cîțu stated that agriculture is a sector facing more credit restrictions, but that, during the government meeting, he approved Agri-Invest, an agriculture-focused program aimed to solve the specific problems of this sector; at present the program provides funds of up to one billion lei but, if the product has positive results, the funding will be increased. Moreover, the Prime-minister stated that he intends to support the development of various financial instruments in this sector, such as the draught insurance product.
About RDF
RDF is one of the main input distributors in the area (for chemical fertilizers, seeds and pesticides), being a direct distributors for: seeds from Pioneer, Dekalb, Syngenta, KWS, Limagrain, RAGT, pesticides from Bayer, Syngenta, BASF, Arysta, while for chemical fertilizers RDF cooperates both with internal providers and external producers, by direct import.
Along with its distribution activity, RDF is one of the main cereal traders in the area, with an amount of around 100,000 tons of cereals per year. In order to maintain a high quality level for this activity, which implies receiving huge quantities from farmers, depositing the received products, their conditioning and supply, RDF owns a cereal sylo with a storage capacity of 22,000 tons.
ROCA Investments and its influence on the business environment
ROCA Investments is a private equity company providing active partnership and capital solutions for the romanian SMEs from a wide range of domains. ROCA community includes companies from various industries such as: Frigotehnica (cold industry), BICO Industries (fiberglass mesh producer), Romcargo Maritim (port operator), RDF Arad (agribusiness), Electroplast (electric cables producer), MECANEX (pumps producer for various industries), Piscicola (fish farm), Artesana (artisanal dairy products) and Yellow.Menu (online restaurant).
At the same time, with the help of several strategic projects, ROCA Investments took responsibility for boosting the enterprising culture in Romania. ROCA’s vision is based on partnership and aims to achieve a synergy between its own businesses, with an added value and an important impact on the economy.
About CONFIDEX
Initiated shortly after the beginning of the pandemic, CONFIDEX is the most complex pro-business report in Romania. It measures the Romanian managers’ trust in the economy at present, and its purpose is to create concrete landmarks and to assist managers in taking the appropriate decisions in each case.
CONFIDEX Q4 2020 covers a sample of around 950 companies in the top 7 economy sectors with a significant contribution to the GDP from all regions of the country: agriculture; industry and electrical power; civil engineering; trade; HORECA; transport, distribution, storage; services. The study was addressed exclusively to CEOs and C-level managers; 75% of the companies under focus have over one million euro turnout, while 31% have a turnout of over 5 million euros.