Vifrana, a Romanian producer of organic wine by cultivated area, wants to repay a bank loan worth 8.2 million lei, to invest in technology, but also to expand abroad and on new business segments after recently obtaining financing of 9.5 million lei through a private placement of shares.
The offer, which was attended by 83 investors, was made with the support of the brokerage company Goldring, “the intermediary of Romanian entrepreneurial companies” – a title obtained from BVB in 2018 and reconfirmed in 2020. Following this investment, Vifrana was valued at 31.4 million lei. In the first half of 2021, Vifrana will be listed on the AeRO market of the Bucharest Stock Exchange.
“This financing helps us to completely close the loans taken ten years ago at a time when agriculture was not bankable. CEC Bank had the merit of giving us long-term trust, but at this moment, to be able to expand externally, we need to close this loan. We will direct the rest of the attracted funds in investments and technology to diminish the impact of the lack of labor force. These investments will help us expand abroad, especially in countries such as Germany, Great Britain, Sweden, and the Netherlands. At the same time, we will develop a new line of business – we will launch organic products for cosmetic and pharmaceutical use made from pomace. We are talking about an ambitious and promising project – the approach to this niche derives from the increase in the consumption of organic products in Romania”, says Octavian Vucmanovici, CEO and co-founder of Vifrana.
5.5 million lei revenues in 2020
Vifrana Vineyard (Constanța County) was founded in 2006, meanwhile becoming the largest producer in Romania of fully certified organic wine, according to the cultivated area: 130 hectares with organic vines.
This year, the management expects a turnover of 5.5 million lei and a net profit of two million lei. For 2021, the estimates are that the revenues will reach 6.3 million lei. The best-selling Vifrana products are from the “Bob with Bob”, “Patrician”, “Symposion”, “Draculette” and “Casino” ranges.
“Unlike conventional wine, which has declined under the impact of COVID 19, the organic wine market has continued to grow. In H1 2020 alone, sparkling wine sales increased by 47% in the UK, and forecasts for the international organic wine market in 2020-2030 show average annual growth rates between 8% and 12%. Developed European countries consume organic wine between 10-20%; the average is even higher in the north. In Romania, we believe that it has reached 2.5%, so there is great potential in the conditions in which we sold over 400,000 bottles this year. Also, in Romania, we have the opportunity to access European funding for organic farming through the European Green Pact, among which viticulture has been promised an important place”, explains Octavian Vucmanovici.
Exports represent 25% of the company’s revenues
The company’s main objectives for next year are investing in technology and expansion abroad – the sales in other countries represent 25% of its annual turnover. This fall, sales in other countries registered a substantial advance, reaching 50% of turnover in October.
“2020 was the year with the most significant pedological drought in the last hundred years, and the plantation must be helped with a careful pruning to regenerate production capacity. We focus on completing all investments in technology at the beginning of 2021. In terms of foreign markets, profit margins are almost four times higher than in domestic retail. We will focus on existing markets, such as Germany – which is the leading export country for us – and new markets such as Sweden, the Netherlands, and the United Kingdom. The UK’s focus is given by a very large increase in organic wine sales in recent years; in 2020 it will be over 40%. We hope to make the first exports to Great Britain soon”, adds the manager Vifrana.
For the next two to three years, the company’s management aims to launch a premium brand for the HoReCA segment and create a Frizzante wine brand.