Agriculture Investment Funds – Romania

Canada PortAgrinatura Group Nanov Teleorman, controlled by the American investment fund called Paine & Partners, is expecting 3.500 euros for each of the 39 hectares which were put up for sale in the Traian locality, in the southern part of the Teleorman county. The market value of these areas rises to approximately 140.000 euros.

The Americans’ expectations are in tune with the land market in the Teleormancounty. For example, Almira Group has bought, during this season, 36 hectares in the same county, for an average price quotation of 3.600 euros/hectare.

Traian locality has at its disposal 4.200 hectares of arable land, while Teleorman County with its 450.000 hectares is the fourth biggest arable land market, after the counties of Timiş, Dolj and Constanţa.

The intention of selling the arable land of the Traian locality shows the American fund’s intentions of clearing up the local portfolio of assets.

This move comes just six months after the moment when the American investment fund called Paine & Partners had purchased Spearhead International, the umbrella under which the local company Agrinatura Nanov used to exist.

Spearhead International is one of the biggest agricultural producers of the EU, with a portfolio of 85.000 hectares in several countries.

The intention of giving up to a few dozens of hectares of land shows the Americans’ intention of clearing up the locally governed portfolio of assets.

The names of the companies which are part of the Spearhead International group have been previously connected to spectacular local acquisitions of arable land. They took over almost 1.700 hectares in Teleorman starting with the beginning of the previous year, and another 3.000 hectares in Dolj in 2012.

The companies under the Spearhead International’s umbrella locally control 18.000 hectares of arable land, with important production centers in Teleorman and Dolj.

They are found to be amongst the biggest foreign Romanian arable land investors, next to German groups, like Agrar Invest (16.000 hectares), Germanagrar, Agrarius, the Austrians from Bardeau Holding (21.000 hectares) or the British from Insight Investment (14.000 hectares).

Romania is one of the hottest points on the global map for arable land investments, taking into account the fatness of the local soils and the underestimation of the assets, comparing to the ones from the West.

The price for arable land has been growing 25 times in the last decade, with an average annual appreciation rate of 40%.

Romania is also a tough competitor on the raw materials market by means of the exportation excess which it has almost every season and by means of an important logistic center offered by the bordering with the Black Sea.

The Romanian agriculture manages, in peak seasons, to generate cumulated businesses which may vary between 16 and 18 billion euros, depending on the prices of the international markets.

Source: AgroFinanciar Romania