Interview with Robert Rekkers, CEO Agricover Credit IFN.
How was the Agricover Group involved, since it was founded, in supporting the Romanian farmers? What can you tell us about the way the company operates, the mechanism of Agricover IFN?
The Agricover Group, with nearly 10 years of operations in the local market, comes with a business model that allows us to be the only provider of complete solutions for agriculture in Romania. Agricover has built a Group of companies capable to supplying farmers and the processing industry not just with products, but the whole range of services they need for a modern and profitable agriculture. For instance, Agricover sells inputs (seeds, fertilisers, pesticides, diesel fuel), buys cereals and all kind of vegetal products. In the same time, we are involved in the zootechnical sector, by offering fattened pigs to the farms and by supporting the farmers in selling the pigs to meat processors or abattoirs.
Moreover, we have the division which deals with financing agriculture. Agricover Credit IFN finances the farmers. We offer working capital for short-term solutions. We also have solutions for long-term investments (land acquisition, purchase of equipment, farms, longer-term acquisitions), we make available insurances (for crops, the equipment of our customers) through partnership with insurance companies. We are virtually an insurance broker specialised in agriculture.
This is the advantage of Agricover, we work as a group, we know much about farmers and provide financial solutions on short and long term, as I mentioned. We have information, we have solutions for farmers, exactly like a real agricultural bank, only we are not a bank, we are a specialised financial non-banking institution (IFN).
We have a commercial team, about 30 are mobile salesmen who go to the customer. We have 10 departments in Agricover IFN, the commercial team at regional level, which goes as a group to customers, draws a profile, analyses the situation and then centralises the loan proposals. The loan committee takes decisions in the shortest time possible. This is the mechanism and also the advantage. We understand the phenomenon, we speak the same language as the farmers do and we make decisions very fast. Customers receive the financing in 7 days.
We believe that the agricultural sector is growing, that is why Romania needs more complex and more interesting financial solutions and one must work with those who know the rules of the game, with those who have the appetite to provide solutions, to undertake risks for this sector. Thus, we try to provide the best services to these customers, and we have the potential. The past year was very good in terms of volume, but not of prices, and I think there are some interesting prerequisites for agriculture to improve its performance. If you have performance, you also need the best partners.
What was the value of the loans extended last year and how do you think they will evolve in 2014?
Last year we advanced our investments by 55 pc, at a level that exceeds RON 640 M. We had a very good year and the number of customers reached 1,300. We are content with the results obtained last year and we expect to maintain the growth pace in 2014 as well. We added new customers to the portfolio of Agricover Credit IFN because we are well aware of the situation and expectations of farmers, and we developed innovative crediting solutions, some of theme unique in the market.
We opened a branch in Slobozia, the first regional office of Agricover Credit, which acts as a hub for the Ialomita-Giurgiu region. The event was a big success and helped us improve our sales. It is a logistic centre that helped us process data from a larger number of customers, so we could have more credit files.
Last year we launched a new product, ‘Creditul Instant’ (Instant Loan) – a loan for SMEs. ‘Creditul Instant’ is a ultra-fast financing solution conceived for the farmers that have vegetal crops on surfaces between 100 and 400 hectares. Farmers can obtain the loan precisely at their farms and – even better – the same day. Farmers can borrow RON 50,000 – 100,000, depending on the surface they own. The money can be used to buy inputs or to cover the current expenses of the farm.
With what products do you intend to support farmers in 2014? What new elements do you plan to bring?
We wish to maintain last year’s upward trend. We want growth in terms of placement and new clients; we want a more solid position in this segment. The farmers still need financial solutions, innovative solutions, solutions specially designed for them, and with a larger team, we believe we can continue to grow organically and deliver better products. Overall, these would be our 2014 objectives. In addition, we wish to open two more branches in two other towns this year. The experience in Slobozia proved such branches offer us more access and help us aid clients or potential clients.
Last year, we launched four products for farmers: Pre-registered Loans, Second-hand Equipment Purchase Loans, Instant Loans, which I have touched on earlier, and a type of loans for milk cow farms. This year, we intend to launch at least three other products, two of which in the second quarter. We will launch a new product for SME farmers, and a more sophisticated product for bigger farmers whose needs are more specific.
I predict our turnover will go up by at least 20 to 30 percent this year.
Have you decided to expand your customer base to natural persons?
We have many services to provide to our current clients who are legal persons. However, I cannot say with certainty that we will not have products for natural persons, as well, next year. For the time being, in 2014 we will continue our work with legal persons or sole registered traders.
Who is the typical Agricover client?
All our clients are important. Let’s say that traditional Agricover clients use multiple offers, own 600 to 800 hectares of land, and purchase fertilizers, pesticides, and seeds from us, and we finance them. People who have not worked with us before and are in need of financing could also be our clients.
We are halfway at the moment. Our ambition is to become a large NBFI, an agrofinance leader. Our business model is unique in this area and does not exist in Bulgaria or Hungary. Based on this superior know-how and our client and solution database, we believe we can become a major agrofinance NBFI by 2017. In total, our clients are currently working a total surface of land of max. 600,000 hectares. Our goal is to finance farmers whose land covers, in all, 1 million hectares, and I think we will be able to achieve our target by 2017.
What can you tell us about Robert Rekkers’ accomplishments with Agricover?
I am very glad I joined Agricover. Agricover is a success story, as I’ve said before. I was very drawn by this business model. A diverse experience with different types of focus, solutions, and problems are very interesting things to have in life. I am glad I am part of a successful team that has a lot of know-how, and is interested in providing smart banking and new products which this company has to offer. Farmers should also benefit from this and we should develop agribusiness in a manner as healthy and efficient as possible. I am happy to contribute to this process. I don’t believe the success is mine; it had been achieved before my time. I did not start this business. We want to build a healthy progress and become agriculture leaders. I am completely convinced agriculture will grow because foreigners have shown interest in this respect, and in particular Romanians with past experience, who are also learning from other countries’ experience.