3Q: Martin Schuldt Cargill Romania GM

Newsroom 25/10/2010 | 10:57

How much has Cargill invested in Romania so far?

Since we first came to Romania, Cargill has invested USD 100 million and another USD 25 million to upgrade some investments. We are active on the local market in 17 locations and a big part of our half a million tons of grains goes to export. We sell corn produced in Romania in Spain, Greece and the Middle East, while oil seeds are best sold in Western European countries. We depend on the success of the Romanian farmer which is why the growing black market on this sector is severely affecting our business here. 

 

How is the black market in crops affecting your local operations?

It affects us at the beginning of the chain, when companies come to the farm and buy crops without papers. Whatever goes into the black market taxpaying companies will not be able to get into their flow. This affects the acquisition price because we are not that competitive, and companies active on the black market can simply pay more. It’s difficult to say how much it influences our acquisition price as in the end farmers can play with 24 percent VAT and 16 percent income tax. At the extreme we are talking about a 40 percent tax impact. 

 

What is the status of financing in the agricultural sector in Romania?

We started this business two years ago on a small scale but the demand was increasing. Currently, we have approved financing of some USD 10 million. This money goes to about 3,000 farmers in the form of chemical and fertilizers. This is something we are also willing to increase because we see the need in the agricultural sector for liquidity as loans to farmers are very restricted. This money comes back to us either in cash or crops, which is obviously our aim.

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