February 22 (SeeNews) - Romanian organic farming products maker Norofert Group [BSE: NRF] plans to acquire a 1,000 ha farm for 9.5 million lei ($2.36 million/1.95 million euro), it said on Monday.
The acquisition of the farm located in Zimnicea, Teleorman county, will be financed through a mix of a bank credit and the company's funds, Norofert said in a press release. The transaction is pending approval at the general meeting of shareholders scheduled for April 20.
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The farm is operated by a local company established in 2006 and has 1,000 hectares of leased agricultural land. It is 84% compact, with 400 hectares already irrigable, and the lease price is attractive, according to Norofert, which plans to introduce organic farming on the whole surface in 2021.
As the farm is located within a 5 km distance from the Zimnicea Port on the Danube, Norofert plans to develop loading barges capacity for its trading organic cereals business. Thus, any bio crops, either produced or received in exchange for the organic inputs, can be sold for export by the Danube.
The farm also comes with approximately 3,000 sq m of warehouses and a full range of farm equipment, in excellent condition and able to operate more than 1,800 ha of land, Norofert added. In the short term, Norofert intends to carry out investments to modernize and expand the storage capacity, increase the arable land to 2,000 hectares and transform part of the farm into a testing facility for its products.
According to initial forecasts made by the company, the total revenues from wheat and sunflower crops as well as subsidies will reach 7.5 million lei in 2022, and the profit is estimated at 3.5 million lei.
Present on the market since 2000, Norofert is the main producer of organic fertilizers in Romania and holds about 30% of the local market of inputs for organic farming. The group has three main business lines – Norofert Organics, which is a line of organic inputs for medium- to large-scale farming, Norofert Karisma, which is a line of fertilizers for large-scale conventional farming, and FITO, a hobby gardening line that also targets small-scale organic farmers.
Norofert Group is listed on the AeRO market of the Bucharest Stock Exchange. The company has a market capitalization of 215 million lei.
Its shares traded 7.49% higher at 28.7 lei as at 1019 CET on Monday.
(1 euro= 4.8747 lei)
28.7