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May 6, 2021
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RDF Arad boosts its business by 65% and reached, from a negative operating profit (EBITDA) in 2019, a 4.3 million lei one in 2020

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 (photo), 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.

 

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