Cargill Bulgaria SPLTD - Sofia - Short Company profile

A record yield and good prices have shot the earnings of agricultural companies in the grain sector to record levels. And so the sector is among the fastest growing with an average revenue growth of over 54%. If bread wheat in the covid recovery has doubled from traditional levels to 300 euros per ton on the French Matif exchange, after the Russian attack this February, quotes reached 440 euros and only recently began to visibly fall in the face of fears of a global recession. But by July they are at the level of 300 euros. The 2020/2021 season was amazing. First, the wheat harvest was a record - 7.2 million tons. Second, the prices were good, and even at the post-war finale, unprecedented. In 2021, Bulgaria officially exported wheat, corn and sunflower for BGN 4.1 billion, compared to just under BGN 3 billion in the previous year. To this can be added exported oil for over BGN 1 billion and other processed products for hundreds of millions. The amount makes the sector among the most important for foreign trade. Completely unexpectedly, the first place in the ranking is occupied by the absolutely unknown company "Agro Bord". The company, although registered here and Bulgarian property, has business entirely abroad. According to its sole owner, financier Tsanko Kolovski, the company buys grain from Ukraine and exports it to markets in Asia and Africa. When asked how exactly he entered the niche, he replied that he had contacts in the producing country. But the period of active business, which began in 2019 and almost touched a billion turnover last year, was literally broken this February, when Russia attacked Ukraine. Now the transport is only by land and with low margins it is unprofitable, said the owner, who, at least for now, is not planning any deals on the Bulgarian agricultural market. Kolovski is a stranger to the grain sector, he is currently a shareholder in the investment intermediary "MK Brokers", and years ago he was in the management of Investbank for a long time. The real leader in the Bulgarian agricultural sector is the Burgas company "Sevan" of Artur Hakopyan and his family. With revenues of almost BGN 850 million, it is the largest retailer in the country. The company works directly for export and is not an intermediate unit for foreign traders. The good year is also visible in the profit - it grew more than twice compared to the previous year. The Burgas company, founded 28 years ago, has already topped the ranking in the sector several times. In addition to trade (mainly wheat), the group cultivates about 100,000 acres and owns huge grain stores and about 200 trucks. The trader of the American concern Cargill has also been the leader several times and is permanently the top foreign exporter of Bulgarian grain. In the case of the company "Cargill Bulgaria", it is interesting that in 2013 it chose the country as a service center within its billion-dollar group. That is why the company has almost 1500 employees. This direction still brings in less than BGN 100 million of revenue, so the main turnover (BGN 700 million) comes from the export of agricultural products. According to estimates of the company itself from previous years, it holds more than 15% of the grain and oilseed market in Bulgaria, with the top three commodities being wheat, corn and sunflower. A strong rebound is made by the local company of the Chinese Cofco, which entered the Bulgarian market in 2018. Its revenues for a year doubled to almost BGN 770 million, which practically confirmed it as the third largest trader of local grain. According to representatives of the sector, they aggressively enter the market and compete with local traders and buy quantities from others. The company does business directly in Bulgaria through "Kofco International Bulgaria". Hats off to Chinese giant COFCO, which has annual revenues of $77 billion. The other large American trader in Bulgaria - ADM, is recovering positions, returning to the top ten and actually has the strongest revenue growth in the agricultural sector ranking of "Capital". In 2020, the company reduced its activities due to transformation: The giant Glencore disappeared from the Bulgarian market six years ago. And while a comeback was expected this year, it hasn't happened yet, but it's on the horizon. The explanation - the concern changed its owner and is still being restructured. It has already rebranded as Viterra, and at the end of 2020 the local company "Glencore Agriculture" was also renamed to "Viterra Bulgaria", but the report for 2021 does not yet show activity in the purchase of grains, although since October they have been hired six employees. The ranks of Bulgarian merchants After the giants in the ranking come the medium-sized traders, which are all Bulgarian property, and some even have a small amount of their own production. In this group, the single leader is the family company of Dragomir and Masha Baldzhievi "Baldzhievi-91", which is part of the Sevlievo agricultural holding "Balea Group". The main business is trade in grain, and according to the information from the company's website, it has seven own grain warehouses, and exports are to European counterparties, but also to third countries, including producers of biofuels and feed. The group is also engaged in the sale of fertilizers, seeds and preparations for plant protection. It also has its own agricultural holding - "Sovata", and through its companies the group develops agriculture on 50 thousand acres of arable land in the municipalities of Sevlievo and Svishtov. The next largest local trader is "Buildcom", which mainly trades in wheat and corn, but also deals in other crops such as sunflower. The company is in the same group as the sunflower oil producer "Oliva", both of which are owned by Angel Georgiev. For 2021, "Buildcom" has a modest growth in revenue compared to other merchants, but the profit doubles. The company explained to "Capital" that the focus was not commercial operations, but production. But this year there is an activation and the turnover will be much higher. In fact, if you add up the turnovers of the next in line - "Kristera" and "Corn Trade", which are part of "Agria Group", the holding enters the trio of the largest Bulgarian traders. "In our logistics centers, about 800,000 tons of grain and oilseed crops are stored and traded annually. And the strategy is to increase the volume," says the company information on the website. Otherwise, the holding, in which the largest share (41%) is held by Emil Raykov, cultivates about 150 thousand decares in North-Eastern Bulgaria, and also owns an oil plant "Amber". At Farm Sense, 2021 was also a growing year, but the real thing A burst of prices after the war this year has certainly added to the growth of the business. The owner of the company Plamen Borisov explained that this year the prices are insanely high, but now everything is difficult to predict. Because of the recession expectations, there is already reduced demand and for example an order for 100 thousand tons is reduced by half and literally the situation changes in hours. His assessment is that prices have reached insanely high levels and indeed costs of fertiliser, fuel, wages etc. have risen by 60%, but farmers have no reason to look for levels above BGN 550 per ton of wheat with normal yields such as this harvest. At his company, the event this year is that the buyback of the silos and warehouses from Glencore has finally been completed. According to his observations, the successor "Vitera" is not yet active, but the plan is only to trade. For years, the largest grain producer in the country has been Svetlozar Dichevski's group, which is united in "Octopus Invest Holding". According to estimates from representatives of the sector, its companies cultivate about 1 million decares of land - owned and leased. This is done through several companies: ET "Agro - Svetlozar Dichevski", "Variety seeds - Vardim", ET "Desi - Svetla Simeonova", "Resen" and "Troya auto". In total, the holding is the largest recipient of agricultural European subsidies - in 2020, the five in question absorbed over BGN 25 million. In the ranking, Dichevski is present with the parent company, with "Octopus - C" and with "Variety seeds - Vardim". It is clear from the report of "Octopus - C" that the company mainly trades in grain products, but also produces refined sunflower oil in the village of Samuil, Razgrad region, and in 2021 this production is worth about BGN 22 million. From the total turnover - BGN 292 million, the purchases from the listed subsidiaries amount to almost BGN 160 million. The holding holds two Danube ports under concession - Oryahovo and Somovit, has a fleet of over 100 trucks and tugs. It owns grain warehouses in North-West Bulgaria and Pleven, as well as having a fodder plant in Dolna Mitropolia, and builds several mills. The second major representative of grain producers is "Zlatia Agro" of Kiril Ivanov, who also owns the trader of preparations and seeds ASM. This is the grain producer who, according to the latest available information, individually receives the largest agricultural subsidy in Bulgaria - BGN 6-7 million per year. "Zlatia Agro" operates in North-West Bulgaria. There is no public information on how much land he cultivates, but it is believed to be more than 100,000 decares in Northern Bulgaria, the main part of which is leased and rented. In the balance sheet of Zlatia Agro, the owned land is valued at over BGN 60 million.