Leonardo Lambrea, General Manager of UBM Agri Trade: For 2020, we are somewhere at 200,000 tons of traded cereals, combined with soybean meal and as revenues we will end with 45 million euro

The cereal and soybean meal trader UBM Agri Trade, a company with Romanian-Hungarian shareholders, traded in 2020 a volume of cereals and soybean meal similar to last year, about 200,000 tons, but the turnover will be higher than last year, going to 45 million euro, as raw mass balance prices have risen amid the drought.

„Being a national trader, I had the advantage of getting goods from almost everywhere. If I were a regional trader, focusing on the south, southeast or Moldova would have been the worst possible year. We also have acquisition and distribution activities in the centre and west of the country, where we make most of the volumes. In terms of volume, we are somewhere at 200,000 tons of traded cereals, combined with soybean meal and in terms of turnover we will end up with 45 million euro", says Leonardo Lambrea, General Manager of UBM Agri Trade.

He added that the substantial drought this year has been a difficult situation for both farmers and traders, but also for downstream industries such as animal and meat producers. However, he says the drought was regional, with large discrepancies. South-eastern Romania and Moldova are areas that have been severely affected by the drought, with farm production at a lowest level of the last 10-15 years, but, on the other hand, in central and western Romania, farmers have recorded high production.

Leonardo Lambrea remembers that the year started normally, but from March to May-June it was "a total chaos", both in terms of procurement and logistics, because it was a time when international flows were interrupted. Romania also had problems with soybean meal imports and merchandise exports.

„As we entered June-July, the drought took us by surprise, because the evolution of the harvests was a good one. Wheat, rapeseed, barley, sown in the fall of 2019 had a good evolution until winter, when everyone turned their attention to the pandemic, farmers said it was a pedological drought, but no one listened to them. We arrived in May-June, when it was already known that wheat was slightly affected, as well as rapeseed and barley, but it rained a lot and people were confident in sunflower and corn, which had a fulminating start. But July-September was a very big drought and, although they went very well, we had the lowest productions in recent years ", Lambrea mentions.

He says that although Romania has a very good, widespread hydrographic network, everyone points the finger - the farmer at the governor and vice versa, and to solve the problem of rehabilitating the main irrigation infrastructure, a solution must be found on both sides.

„As a country, we benefit from a very good climate, in nine years out of ten you produce money without investing. In your tenth year, you probably had to have irrigation infrastructure. On this principle, farmers have said that they should not invest in irrigation because Mother Nature helps us. You will not see this problem in Turkey, Egypt, countries that have a continuous drought, because it is invested there ", says Leonardo Lambrea.

He states that the Romanian farmer wants to recover his investment in the next period, but not to have a depreciation of 10-15, as in the case of irrigation and the government should have a correct policy and give subsidies for the farmer to be willing to invest.

UBM Agri Trade is a niche trader and does not work much with the direct farmer, but buys from local traders or other intermediaries who buy from farmers. "There are enough input companies, which also have a silo, they also have logistics and they execute their contracts completely. We have 80% of these suppliers as intermediaries or local traders. We have suffered some losses, but not like the multinationals."

The company exports directly by truck, train or on the Danube, mainly to Western countries, Hungary, Austria, Germany, Italy. In port of Constanta, UBM Agri Trade representatives say they prefer to sell to multinationals, because economically it makes more sense.

"From the perspective of profitability, we always go to the market that pays the best, being a trader, this is the specifics of the activity. Contrary to the opinions of some market players, if you go directly to export you do not necessarily receive the best price, because all the conditions of a transaction must be considered, from volume, to payment, to quality. There are certain things that multinationals manage better and there are others like the niche or smaller trader manages better. As long as everyone does their part very well, I think we can all participate in the market ", explains Leonardo Lambrea.

He adds that UBM Agri Trade business is on an upward trend since 2018, both in terms of volume and turnover and the company's profitability, and locally, he considers that the UBM group has at least five more years to reach a million tons of grain traded.

In Romania, the Hungarian group UBM has two partnerships, one strictly on the trading side of cereals and soybean meal, without managing its own assets, and the other activity is feed production, having a compound feed factory (FNC) in Sânpaul, near Târgu-Mureş, this being the largest in south-eastern Europe and having the newest technology.

"The group continues to invest in Eastern Europe, mostly in FNCs, with a project in 2021 to build an FNC in Serbia. We have representation in five countries - Austria, Hungary, Romania, Serbia, Slovakia and projects for two or three more countries in the same area. We, as UBM Agri Trade, the trading part in Romania, have increased our team in 2020, because the business is on an upward trend and the profitability is still a good one ", said the commercial director of UBM Agri Trade.

Leonardo Lambrea entered agribusiness 13 years ago and mentions that, just by coincidence, the specific was similar to this year, in 2007 being a severe drought. He started working for Cargill and later worked for Brise Group. "Moving from the multinational to the local company and then to entrepreneurship, the challenges are constant and you are constantly learning, and this year has been the best year for me as an entrepreneur."

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Author: Florentina Niţu 14.12.2020