Former Medicover shareholder looks to double hemp business

Romanian maker of hemp products Canah International is looking to almost double its business, which grew by 85 percent this year to about EUR 4 million, fuelled mainly by growing exports, said Dan Lazarescu, the company’s main shareholder and manager. He is a former shareholder of private medical supplier Medicover and software firm TotalSoft.

“2013 has been a very good year. We got close to our production capacity limit sooner than we had thought,” he said. The factory – which produces hemp oil, hemp seed flour, hemp seed fibers and other related products, both organic and conventional – could double its capacity in about seven or eight months following an investment of about EUR 700,000-EUR 1 million, he said. The company is now looking for ways to raise the money, but Lazarescu has ruled out a bank loan or EU funds. “Financing an industrial business should be treated differently from financing a real estate one. Banks don’t really understand this and they don’t finance industrial projects (…) As for EU funds, from what we’ve learned, the best case scenario would mean waiting at least two and a half years to get the money,” he said. By comparison, it took less than a year to get the factory operational after securing SAPARD funds in 2006.

While Romanians’ interest in healthy eating is on the rise, exports represent some 80-85 percent of total sales. “In Romania we sell under the Canah retail brand but we export in bulk,” said Lazarescu. The main foreign markets are the UK, Germany and the Netherlands, but the company says it exports all over the world. “We have exported everywhere from Australia and South-East Asia to North America and the Vatican. Because this is a niche market, consumers are spread everywhere,” he added. In Romania, where its products are mostly available in specialized shops, the company has invested some EUR 80,000-EUR 100,000 in a promotional project.

Canah International’s factory is located in Salonta, western Romania. It has a production capacity of 1,000 tonnes of hemp per year. This year it processed 850 tonnes but almost all of this was imported from China and France as there are very few local suppliers, said Lazarescu. “In 2014 we will spend between EUR 1.3 million and EUR 1.5 million on raw materials. It is a shame this can’t go to Romanian farmers,” he said. Back in 1990 some 170,000 hectares were cultivated with hemp in Romania, but this has dropped to several hundred at present, according to company data.

Simona Bazavan