The effects of floods in Moldova are becoming visible among companies carrying production activities in the areas hit by the rains.
Agricola Bacau group, the largest chicken producer on the domestic market, announced the value of direct losses caused by floods stands at almost 400,000 euros.
"We felt the impact of floods at the level of several units of the group. We even had to suspend the activity of some of these, with some important facilities being shut down. They resumed operations after the problems were sorted out. Direct losses amount to 1.5 million RON (400,000 euros) and the other damages have raised total production costs by 5-10% per month," says Gheorghe Antochi, chairman of Agricola International.
The damaged railway infrastructure and national road E 85 (Bucharest-Bacau) have also affected the activity of the company, with the time needed to deliver the necessary raw material, especially from Constanta harbour, exceeding the usual limits by far. "Floods have influenced the company''s activity, but have not prompted any changes in our business plan for 2005," specified Antochi.
In the first six months of this year, Agricola group registered 10% higher turnover, with the management forecasting 11% higher turnover in RON by the end of this year against 2004, to 335 million RON (94 million euros).
In early June, Agricola International management announced it planned to put all the firms of the group under a single umbrella. Antochi specified that four of the group''s firms received the preliminary approvals to merge with Agricola International, with the merger project to be validated in October. "We will merge, but only with Agricola Bacau, Avicola Bacau, Intertrade and Suinprod, because other companies of the group, Conagra and Europrod, have carried out SAPARD projects and they may not join the merger process for five years," specified Antochi. Two other non-farming companies are in the same situation.
Agricola International chairman also said the group chose the solution of a merger to ease up its access to financing and boost the efficiency of talks with banks.
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