A 9% interest rate would make “First Silo” viable

“If the application regulations take a little while longer, this year is over, we are already preparing for the new production cycle. The program is a good initiative, but I am waiting for facts,” Porumboiu told Business Standard.

The “First Silo” program consists in issuing certificates of deposit for storing production in licensed silos, with which producers will be able to obtain bank loans. He added that this year’s crop is below expectations, due to drought.

“This year, the crop was violently attacked by drought. Losses amount to 42 percent compared to last year’s production. The businessman manages some 50,000 hectares of arable land, of which one fifth is his personal property. This year, the total wheat production obtained by Porumboiu amounts to 100,000 tons, compared to 148,000 tons obtained last year. If, in 2008, the Racova group exported 50 percent of production, estimates for this year target some 20 percent, with the remainder destined for processing. “Final products will be exported, edible oil, biodiesel, baked goods. It is difficult to estimate the share of exports at the end of this year, considering that we are talking about an uncertain year financially,” Porumboiu said.

The group controlled by Porumboiu posted net sales in excess of €250 million last year, €50 mln more than initially estimated at the beginning of the year, due to massive investments in increasing production capacity, in modernization, and because of the good agricultural year.