Agriculture and agro-industrial policy

Since 1995 S.C. InterAgro S.A. has become one of the most important cultivators of cereals and technical plants in Romania. The agro-industrial sector is structured as follows:

VEGETABLE PRODUCTION AND ANIMAL HUSBANDRY

Vegetable production

The InterAgro Group has been continuously developing and modernising the agriculture division, building on the award given in 1999 and in 2004 by the Romanian Chamber of Commerce and Industry which established InterAgro as a leading company in the field of agriculture and forestry in Romania.
In 1996 S.C. InterAgro S.A. managed 3,290 ha arable land in Prahova and Teleorman counties. By the autumn of 2004, thanks to an increasing commitment to agriculture the cultivated surface was enlarged to 46,180 ha of arable land, vineyards and orchards.
This land is leased (31,300 ha), chartered (7,760 ha) and owned (1,000 ha) and is located in the most fertile areas of Romania: in Teleorman, Prahova, Calarasi and Ialomita counties. The companies included in the agricultural sector of the InterAgro Group of Companies are: S.C. InterAgro S.R.L. Zimnicea (15.000 ha), S.C. Intercereal S.A. Fetesti (12.000 ha), and also the branches in Ploiesti, Rosiori, Dragos Voda, Perisoru and Alexandria.

Year
1996
1997
1998
1999
2000
2001
2002
2003
2004
Surface
Arable area (ha)
3,290
10,000
24,000
30,000
52,000
47,000
32,000
34,000
46,180

S.C. InterAgro S.R.L. was founded in 2001 with agriculture - especially cereals - as the main field of activity. With a total investment of 274,145,038 thousand ROL in 2003, the company's present turnover reaches approx 40 million euro of which 12 million euro from the vegetable sector.

In order to sustain its activity in agriculture, S.C. InterAgro S.R.L. has made large investments in modern agricultural technologies, competitive tractors and farm equipment.

In 2002 green Virginia type tobacco was first cultivated on an area of 110 ha and a production of 1,416.8 tons was obtained. The tobacco was dried in privately owned dryers leading to a quantity of 145,963 tons. In 2003 the tobacco cultivated area was enlarged up to 270 ha, Burley type on 100 ha and Virginia type on 170 ha, and in 2004 the total tobacco cultivated area reached 600 ha.
The company has retail outlets in Rosiori de Vede, Alexandria, Giurgiu and Zimnicea and wholesale tobacco distribution in Alexandria, Bucharest and Ploiesti.
Another one of the company's activities is the processing of its grain in bakeries located in Zimnicea, Rosiori de Vede, Alexandria, Videle and Giurgiu.
Experience has shown that vertical integration, especially in the agro-alimentary field, is the mechanism for obtaining quality products at low costs and for running profitable and competitive companies in a transitional economy.
S.C. InterAgro S.A. has proven total commitment to the development of the agricultural sector. A program of farm modernisation was implemented in 1997 through the acquisition of agricultural equipment and the use of high quality seed production, appropriate fertiliser application and crop protection.

At present S.C. InterAgro S.A. owns:

  • 60 tractors of over 240 horsepower;
  • 107 tractors of 65 up to 150 horsepower and associated agricultural equipment;
  • 80 great capacity harvesters;
  • 100 trucks for cereals and other materials transportation;
  • 300 irrigation installations;
  • 2 modern seed conditioning installations;
  • tobacco dryer - 80 dryers.
The implementation of simplified seeding technology has decreased the mechanical work costs by 60 %.

Greater productivity and cost efficiency have been obtained by:

Average annual productivity (kilograms / hectare):

Year
 1998 1999 2000 2001 2002* 2003 2004
Cereal
WHEAT
BARLEY
SUNFLOWER
CORN
 5,200
5,500
1,780
5,600		 5,500
5,800
1,900
6,800		 5,700
6,300
2,000
7,200		 5,700
6,200
2,100
7,000		 4,500
4,600
1,800
5,600		 4,500
4,800
2,600
5,800 		6,100
7,060
2,800
9,700

Note: * extensive drought

In 2004 the crops were structured as follows:

  • cereals and processing plants - 45.000 ha (60 % autumn crops: rape, barley, wheat, and 40 % spring crops: mustard, crocus, sunflower, corn, soya);
  • tobacco - 600 ha;
  • orchards - 240 ha;
  • green crops - 200 ha;
  • vineyards - 140 ha.
Barley is mainly grown and used as pig fodder by S.C. Suinprod S.A., while the remaining barley is sold.

The vegetable sector's turnover is of 680 billion ROL in 2003 and in 2004 reached 900 billion ROL.

Animal husbandry

In 1991 S.C. Suinprod S.A. Zimnicea became a privately owned company and in 1997 part of the InterAgro Group of companies. With over 25 years experience in the production, processing and trade of agro-industrial products, and also a throughput of 65,000 pigs per year the company includes pig breeding, slaughtering, speciality meat production and distribution.

S.C Interferm S.R.L. was founded in June 2003 and is mainly involved in animal breeding. The company owns a 210 head Holstein cattle farm, and hopes to reach 1000 heads in two years.

The two companies' turnover was of 220 billion ROL in 2003 and in 2004 reached over 310 billion ROL.

CONDITIONING AND STORAGE SECTOR

Several companies specialised in the collection, conditioning and storage of cereals and technical plants were acquired by S.C. InterAgro S.A.:

and a new company was established:

The acquisition was followed by the modernisation of the reception, conditioning, drying, storage-seration, delivery facilities, as well as of all the equipment.
S.C. Comcereal S.A. Prahova, a privately owned company (S.C. InterAgro S.A. holds 83 % of the shares) has as a main field of activity the acquisition of agricultural products, oleaginous seeds and crops storage.

S.C. Comcereal S.A. consists of the following sites:

  1. Crivina cereals reception base
  1. Ciorani cereals reception base
  1. Floresti cereals reception base
  1. Mizil cereals reception base
  1. Inotesti cereals reception base
  1. Zanoaga cereals reception base
  1. Ploiesti Silo cereals reception base
  1. S.C. Comcereal S.A. Prahova headquarters
  1. R.S.- Floresti Gara cereals storage facility
  1. R.S. - Gageni cereals storage facility
  1. R.S. - Targusorul Nou cereals storage facility

The first seven sites are situated next to railway stations and highways.They are also supplied with water, electricity and fire fighting systems.
S.C. Comcereal S.A. is mainly involved in taking over agricultural products from manufacturers. The company also has in its patrimony specific buildings, appropriate storage houses, facilities, a truck fleet, maintenance shops and laboratories.
The financial indicators for the past four years show steady growth:

- thousand ROL -

Year
2001
2002
2003
2004
Turnover
105,230,033
87,876,611
112,927,898
195,000,000
Assets
64,767,348
75,999,563
79,227,326
168,000,000
Total income
107,476,239
88,708,681
114,176,532
199,000,000
Total expenditure
96,337,658
88,135,355
109,910,424
194,000,000
Gross profit
11,138,581
573,326
4,266,108
5,000,000
Net profit
8,681,680
252,905
3,227,763
3,750,000
Number of employees
157
115
109
109

S.C. Cerealcom S.A. Teleorman a privately owned company (S.C. InterAgro S.A. holds 45.10% of the shares) has as a main field of activity agriculture and auxiliary services for agriculture. The company is also specialised in the production of vegetable oils and grease, the acquisition, commercialisation and storage of agricultural products, seeds and oils .

In 2002, S.C. Cerealcom S.A. Teleorman took over S.C. Rosiori S.A. and as a result S.C. Cerealcom S.A. - Ulei Rosiori Branch was created.

S.C. Cerealcom S.A. consists of the following sites:

  1. Ulei Rosiori Branch
  1. Alexandria Silo
  1. Olteni Silo
  1. Rosiori Silo
  1. Siloz Videle
  1. Turnu Magurele Port Silo
  1. Zimnicea Port Silo
  1. Tiganesti Storage
  1. Slavesti Storage
  1. Necsesti Storage
  1. Silistea Storage
  1. Ciolpani Storage
  1. Balta Sarata Storage
  1. Suhaia Storage
  1. Company headquarters

Rosiori de Vede is the only large capacity oil factory in Teleorman County and in southern Romania, a region favorable for growing sunflower and other oleaginous plants.
The factory consists of: a sector for processing sunflower seeds with a capacity of 400 tons / 24 hours; a sector for oil extraction that can process 85 tons of castor oil, 45 tons of soy beans and 65 tons of rape or flax in 24 hours; two bottling sectors - for one litre bottles, with a capacity of 2500 bottles / 8 hours and for 1 litre PET, with a capacity of 12.000 bottles / 8 hours. The equipment and facilities were purchased from De Smet Belgium and Alpha Laval Netherlands and guarantee the highest level of international quality.
The company's financial indicators are shown below:

- thousand ROL -

Year
2001
2002
2003
2004
Turnover
363,447,139
280,163,767
227,404,912
337,000,000
Assets
69,511,550
545,068,012
529,689,673
540,000,000
Total income
375,667,130
286,807,737
234,997,037
345,000,000
Total expenditure
330,880,534
239,288,879
231,618,566
337,000,000
Gross profit
44,786,596
47,518,858
3,378,471
8,000,000
Net profit
34,110,843
35,058,833
1,855,672
6,000,000
Number of employees
245
561
510
423

S.C. Cerealcom S.A. Bacau's main field of activity consists of storage, wholesale trade of cereals and technical plants and services for agricultural products, having a storage capacity of 38,000 tons.

The company has access to infrastructure facilities:

For reception, processing, drying and delivery operations, Bacau silo is equipped with the following:

For processing its crops and storage, S.C. Cerealcom S.A. cooperates with prestigious companies such as S.C. Pambac S.A. Bacau, the biggest Romanian flour, bread and pastry producer and S.C. Unirea S.A. Iasi, a big oil producer, part of the Bunge Group.

S.C. Intercereal S.A. Fetesti was founded in April 2000 and is mainly involved in:

Storage capacity (silos and storage houses): 159.000 tons.

In addition to crops conditioning and storage, companies like Comcereal S.A / Cerealcom S.A. act as brokerage houses on the domestic market and through self-generated liquidity extend the leasing of land activity.

THE FOOD INDUSTRY

S.C. InterAgro S.A. owns two wheat mills located in Buturugeni and one in Zimnicea which are used for producing bread and pastries by the seven bread factories belonging to the Group.
Founded in June 2003 and equipped with the latest technologies purchased from Buhler (Switzerland), the InterAgro Zimnicea mill is a market leader in the agro-alimentary industry, as a result of the 6 million euro investment.
With a present processing capacity of 150 tons/day, the mill shall reach 320 tons/24 hours in the next two years.The mill will process annually 45,000 tons of wheat resulting from 8,000 hectares locally owned by InterAgro Group with an estimated turnover of in excess of one million Euros per annum.

Currently three types of wheat flour, semolina and husk are being produced, the milling of 100 tons/day of wheat resulting in 60-70 tons /day of flour for a total amount of 550-600.000.000 ROL / day.

The excess wheat flour is traded on the domestic and international market and S.C. Suinprod S.A. Zimnicea uses the residual husk as pig fodder.

Some 10 % of the wheat production is used for bakery purposes, while the remaining production is sold on domestic or international markets, depending on the economic climate.
At the end of 2004, a number of large capacity silos were inaugurared, after a 1.5 million EUR investment.

Bakery
Ploiesti
Bucuresti
Alexandria
Giurgiu
Rosiori
Zimnicea
Videle
Number of bread ovens
2
1
1
1
1
1
1
Production capacity of each oven (loafes/day)
20,000
si
10,000
20,000
20,000
20,000
10,000
10,000
20,000

The "AgroRom" Consortium consisting of S.C. InterAgro S.R.L., S.C. Suinprod S.A. and S.C. Asigurarea Romaneasca - ASIROM S.A., became in February 2004 the majority shareholder of S.C. Cicalex S.A. Poroschia. The Consortium aims at improving the entire activity of this company through proper management, technological and environmental investments, as well as by developing commercial opportunities domestically and internationally.

The main field of activity is represented by the production, preservation and processing of meat, resulting in:

  • meat products;
  • canned meat products;
  • semi preserved canned meat products.
The quantity and value of canned meat sales for the past four years are:

Year
2001
2002
2003
2004
Volume (tons)
937.7
935.4
1,146.4
1,433
Value (thousand ROL)
39,787,333
41,096,275
53,098,028
75,225,775

and the total sales are:

Year
2001
2002
2003
2004
Total sales (thousand ROL)
50,197,093
56,364,506
75,826,464
91,100,000

S.C. InterAgro S.A. founded S.C. AlcoZim S.A. and provided full financial support for an alcohol plant utilising the latest Italian technology. The plant is fully integrated with its own bottling and packing station.

 
The spirits traded under the brand name of Alcozim are: vodka, brandy, premium gin and liqueurs.
InterAgro Zimnicea Dairy was re-built and became operational in October 2004 using the latest technology and equipment from the EU, mainly from Italy and Germany, utilising SAPARD funds.

The milk processing capacity is 26,000 litres / day.

After going through the reception and cooling stages the milk is gathered in two tanks and then standardized, homogenized and pasteurized according to the latest EU hygienic and sanitary regulations (EURONORMA). Throughout these stages all the parameters are strictly monitored and recorded. The milk is then packed for consuming in one litre cartons.

The steam boilers, water cooling devices, the centralized washing installation are highly efficient and in accordance with the environment preservation regulations.

From a total investment of 2,500,000 Euro, 646,700 Euro came from the SAPARD program.

The following main products are processed daily:

  • 6,000 litres of pasteurised milk packed in one-litre cartons, with 0.1 - 3.2 % fat content;
  • 6,000 litres of yoghurt;
  • over 750 kilos of homogenized and fermented cream;
  • 1,600 kilos of cheese and brine cheese ''telemea''
  • 1,000 kilos of Romanian pressed cheese.
All products are laboratory certified and meet the highest internal and international quality standards.

S.C. InterAgro S.A.'s sugar plant in Zimnicea, S.C. ZAHARUL S.A. is the only sugar producer in the area.

The factory is equipped with French, Czech and Romanian technology.

Sugar is processed from both sugar beet and cane.

The agro-industrial sector represents a major part of the InterAgro Group's infrastructure and is strategically important to its success. The further development of this sector is of primary significance for the Romanian economy as it plays a major role in the promotion of Romanian products on the domestic and international markets.

In 2002 S.C. InterAgro S.R.L. and Tecnoimpianti Italy founded S.C. InterAgro S.R.L.- Tobacco Processing factory situated in Zimnicea, covering a 28,500 square meters site, with a current production capacity of 15,000 tons of tobacco per year, increasing to 18,000 tons per year, cultivated on 270 hectares in 2003, rising to 600 hectares in 2004.

The total investment including equipment, buildings and utilities amounts to 6 million Euros.

Romania's lack of tobacco processing technology and the demand for high quality production corraborated with the favourable climate of this region, created circumstances for the development of tobacco cultivation and a processing factory.

This factory is the Country's sole producer of strips, a high quality raw material essential for cigarette manufacture.
The process consists of:

In order to reduce handling losses, bailed tobacco is moistened in a vacuum chamber at the rate of 4000 kg/hr. Bails are then opened and the leaves are spread.

In order to have an uniform and good quality product the leaves are separated from impurities and sorted for uniform colour and quality.

In order to obtain a constant product flow, two buffer silos with a capacity of 5,000 kilos are used.

Due to the loss of moisture during handling, the tobacco requires rehydration before threshing.

The threshing line consists of rotating threshers and pneumatic separators that divide the leaf into strips and stems through a flotation process. Mineral dust and organic particles are extracted as part of the environmental control process.

Redrying results in reduced uniform humidity of the tobacco. This rapid conditioning ensures uniformity of the tobacco product creating optimal conditions for maturation and long-term storage.

The tobacco leaves, strips and stems are separately pressed and packed in 200 kilos boxes.