FirstFarms A/S and DCH International A/S has signed Letter Of Intent for the purpose of FirstFarms to take over the operation of owned and leased land belonging to DCH International in East Romania.
The intent is that FirstFarms leases 400 hectares and takes over the leasehold of 1,700 hectares from DCH International with effect from September 2015.
Furthermore, at the same time FirstFarms takes over the modern machine park, which today is used to operate the land.
The agreement also entail that FirstFarms in future purchases and is responsible for delivery of the slurry from the pig production based on the present 11,500 sows, which DCH International has in East Romania
The operation of the land will be merged with FirstFarms' existing center in East Romania.
- It fits very well into our strategy to operate approx. 10,000 hectares in the region in the long term, says CEO Anders H. Nørgaard, FirstFarms A/S.
With the expansion FirstFarms will have approx. 5,400 hectares in East Romania.
Will focus on the pig production
For DCH International A/S the agreement means that focus will be completely on the pig production in the future.
- We will do what we do best and focus on growth within this area, explains CEO Lars V. Drescher, DCH International A/S.
He states that there has been a better return on the invested capital in the company's pig production.
Both Anders H. Nørgaard and Lars V. Drescher points out that the two companies in the future will work closely together in regards to the delivery of slurry.
- It is also likely that we will trade crops with each other, they say.
Agreement on market terms
By the Letter Of Intent it appears that all trades between the parties shall be on market terms.
It is also clear that they are now working further on due diligence and then the final contracts for the execution of the agreement - expected in the autumn 2015.
Picture of Anders H. Nørgaard and Lars V. Drescher
On behalf of FirstFarms A/S and DCH International A/S, the two CEO's, respectively Anders H. Nørgaard and Lars V. Drescher have entered a Letter Of Intent about operation of 2,100 hectares and delivery of a large amount of slurry in East Romania.
Further information at FirstFarms A/S, CEO Anders H. Nørgaard on +45 75 86 87 87 or at DCH International A/S, CEO Lars V. Drescher on +45 40 42 30 01
FirstFarms A/S is Denmark's only stock exchange listed company with activities in the primary agriculture. FirstFarms A/S was listed in December 2006 and has now approximately 3,300 shareholders and a share capital of DKK 47,122,410. The activities are in agricultural companies and land in Slovakia and Romania. The company operates a total of 14,800 hectares, 2,400 dairy cows and employs approximately 200 employees. In 2014, FirstFarms A/S realised a turnover of DKK 125.0 million, an EBIT result of DKK 19.2 million and a pre-tax result of DKK 11.5 million. In 2015, FirstFarms A/S expects an EBIT result of DKK 6-11 million.
DCH International A/S was established in 2001 with pig production in Canada as main activity. In 2006 the activities are expanded to include pig production in Romania, which today represents the major part of the company's production and turnover. The total production was in 2014 based on 10,500 sows and a total of 250 employees. In 2014, DCH International A/S realized a turnover of DKK 365 million, an EBIT result of DKK 67 million and a pre-tax result of DKK 52 million. The total production is under development and is expected to reach 13,400 sows in mid 2015 - of this 11,500 in Romania. DCH International A/S is owned by 75 shareholders.
