1. Cost leadership through economies of scale and location
Agricultural production in South Romania allows for cost leadership, based on a global comparison. Production cost for wheat as the global benchmark crop is approximately EUR 105/ton. Panamax vessels take 2.5 days from leaving Constanta port on the Black Sea to enter the Suez Canal. Romania’s close proximity to the Middle East as a major grain and oilseeds buying region is a significant competitive advantage.
2. Increasing the agronomic and economic performance
Advantageous production costs in South Romania coupled with irrigation, good winter characteristics of crops and crop insurance yield in an EBIT performance of EUR 600 – EUR 700 per hectare across a number of locations, which is practically the result of Geo Farms’ farm management efforts and initiatives. The average EBIT of farm operations in South Romania ranges typically between EUR 130 – EUR 300 per hectare.
3. Sustainable maximization of profitability by applying our “8-Phase Model”
Specific and phased development of farming businesses by implementing best-practice methods and expanding vertically across the value chain results in a considerable increase in profitability.