July 22 (SeeNews) - Romanian farming products retailer Agroland said that it has decided to take over a compound feed plant in Caransebes from Lipoplast and start production of non-genetically modified (non-GMO) feed there - an investment project worth an estimated total of 1.3 million euro ($1.5 million).
The takeover of the plant is part of Agroland's strategy to become the largest local producer of non-genetically modified (non-GMO) certified eggs and poultry, it said in a statement filed with the Bucharest Stock Exchange on Wednesday.
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The acquisition process is expected to be completed by the end of 2021. Agroland plans to obtain non-GMO certification for feed to be produced at the plant by the end of August. The plant has production capacity of 12,000 tonnes per year at present which is expected to increase by about 25% per year by 2024.
"At EU level, the trend towards the consumption of organic and non-GMO products dates back many years. There are countries like Austria, where non-GMO products represent up to 90% of the total market, but also countries like Romania and Bulgaria, where this segment is close to zero. Fortunately, there are conditions for this market to grow slightly, by up to 10% in the next three years," Agroland founder and general manager Horia Cardos said.
"Until now, the main obstacle to the development of this market locally has been the lack of production capacity for non-GMO certified feed. With the certification we will obtain for the Caransebes factory, the obstacle will be removed and we hope that there will be other entrepreneurs or companies that will invest in this direction. We estimate that at the end of September we will be able to deliver the first non-GMO certified eggs to big retail networks in the country."
Agroland is considering opportunities to take over other producers of table eggs and poultry meat in the future, in order to strengthen its position in this market.
In October 2020, Agroland entered the consumer eggs market by taking over the Avicola Mihailesti platform, a producer of consumer eggs and day-old chicks, which includes six farms.
Agroland's shares traded flat at 20.8 lei ($5/4.2 euro) as at 1117 CET on Thursday on the Bucharest bourse.
(1 euro=4.9247 lei)