By Farmers Weekly staff
DALGETY has pulled out of Romania, citing the uncertain trading environment and an inability to move its business forward as the reasons.
The company has been involved in the country for less than two years, owning a 51% share in Bucharest-based merchant Gavem.
It has now sold the stake back to the local management.
Instead, Dalgety is focusing on its Polish operation where, after four years, it has built up a 10% share of the agro-chemicals sector and 5-8% of the seed and fertiliser trade.
“Romania is ten years behind in terms of business development, financial probity and investment security,” says country manager Gerald Rivett.
Poland, in contrast, has the fastest growing economy in the region.
“The country is surging forward and we can be much more assured about the people we are dealing with,” says Mr Rivett.
The one thing we have learned in central Europe is that the best way to do business is to start the business. That way, youre not inheriting anything from the old regime.”
Despite this, Gavem boss Stephen Price, who took over the Dalgety shares, believes Romania still presents a good business opportunity.
The economy is forecast to return to growth next year, the export market for agricultural commodities is good and the privatisation process is beginning to happen, he says.
In particular, he points to the tremendous expansion in genetically modified crops in the country, which will further its competitive advantage.
“Outside of north and south America, Romania leads the world, with thousands of hectares of GM soya and maize. It goes down a treat here as is reduces the dependence on chemicals,” says Mr Price.
“While this will limit the export potential to western Europe, we will be nicely positioned to hit the other markets of the world.
“People in Africa and the Middle East are not too concerned if what they eat is GM or not.”
A massive US presence in the country, in the form of privately owned Transchem, which is farming 65,000ha (161,000 acres), backed by $85 million (57m) of US and Romanian government money, is spearheading this drive.