DN AGRAR is one of the largest milk producers in Europe and the largest integrated livestock farm in Romania.
Since listing the company on the Bucharest Stock Exchange in 2022, DN AGRAR have tripled its business and through the growth strategy, supported by operational efficiency and the development of a new farm, the company aims to double the business by the end of 2027.
One of the projects started in 2023 is the Straja Project, namely the construction of a new farm with a total capacity of 5.000 animals, meaning 3.800 dairy cows and 1.200 young cattle, which will have 2 milking rotors and will be built on a total area of 10 hectares.
The Straja project will be realized in several stages, with the main objective to start milking production as soon as possible.
Also, in order to limit additional purchases of milking cows, for this project we will supply most of the cows internally through the young stock breeding program we are running at Prodlact farm.
The Extraordinary General Meeting of DN AGRAR Shareholders in March 2024 approved the financing of this project by accessing a credit facility of EUR 9.2 million from Exim Banca Românească for the construction of the farm, equipment and animals. DN AGRAR’s contribution to this project will be 20.78% and will come from its own sources.
Below, we detail the phases of this project.
In addition, efforts have been made to obtain the building permit for the animal housing and grain mill, which will cover an area of 5 hectares adjacent to the investment already started.
In phase II, we will start the construction of the foundation, construction of the first barn, installation of the 2 milking rotors, access roads to the farm, construction of the fodder shelter, offices for the staff.
This phase will run from January to July/August 2024.
In the first part of 2024, we will start the construction phase for the first milking parlor, and in the 3rd quarter of 2024, we expect to start milk production on the Straja farm and to have 900 productive cows by the end of 2024.
Under Phase IV, we will expand the capacity of the farm, which means building additional pens, additional feed shelters, other necessary adjacent constructions.
We will run this last phase from January 2025. Once this phase is completed, we will have full farm capacity, i.e. the new farm will be operational and productive at maximum capacity in 2027, with a herd of 3,800 dairy cows and 1,200 young stock.
We intend to reach the maximum capacity of the Straja farm in the next three years, with a total herd of 5,000 cattle. We estimate daily production of approximately 100,000 liters of milk by the end of 2027/beginning of 2028.
To enhance work efficiency in our farms, we plan to install and utilize industrial robots in our two farms: LACTO AGRAR and CUT. Based on our internal analysis, employing these robots in the milking parlors will result in a 50% reduction of manual labor, for certain operations in the milking process, after this project is implemented and finalized.
These robots are specifically designed for use in milking parlors with milking parlors, which we have in both Lacto Agrar and Cut farms.
This is a fully automated teat dip sprayer specifically designed for rotary parlors. The works with most standard teat dips automatically spraying teats post milking clusters are removed.
The system automatically sprays teats with the post-dip solution. As a result, it fully coats and protects teats from mastitis-causing bacteria between milkings.
– Eliminate salary and expenses for one labor position per shift
– Save money without sacrificing udder health
– Prevent mastitis and its associated costs
– See a full return on investment in 1 year
We have already started this project at our two farms, installing this type of robot starting from May 2023.
With this phase finalized, we will reduce the manual labor with 25%.
It is well known that to minimize clinical mastitis and its associated costs, teats and udders must be as clean as possible. In robot systems, cleaning teats before milking is an automatic process.
This dairy robot completely automates the whipping position by performing teat cleaning, teat sanitizing, teat stimulation and teat wiping.
The brushes on this rotary robot remove debris from the teats and udder, reducing the possibility for infection and lowering the likelihood of both mastitis and bimodality.
As the brushes grab onto the teats, they also perform automatic pre-stimulation which can lead to faster milk let down.
Once installed, this robot requires no interaction from parlor staff.
– Eliminate salary and labor expenses for whipping and cleaning the udder
– Save money without sacrificing udder health
– Prevent mastitis and its associated costs
– See a full return on investment in 1 year
We anticipate installing this type of robot, starting from July 2023, and with this, we willreduce the manual labor with 25%.
After these robots are installed and performing in our Lacto Agrar and Cut farm, we will have a 50% reduction in manual labor, for certain operations in the milking process, for both farms.
DN AGRAR practices circular farming, thus the need for high performance machinery and high performance equipment, both for fodder production and milk milk transportation, as well as for the efficient management of semi-solid and solid solid solid manure.
We also plan to build a composting facility next to the Apold farm to reduce the costs of transporting water to landfill lagoons and of vegetable waste from fields, which will also lead to the establishment of an alternative line of business.
We want to develop such a composting facility for our manure and we believe that this project fits perfectly into the DN AGRAR strategy and focuses on realizing circular farming.
By composting our manure we save transportation costs, we have the possibility to increase the number of dairy cows and by selling a part of the compost we will increase the company’s income.
This investment will also help us anticipate future legislative changes for circular farming, which we fully support.
We detail the phases of this project below.
Phase I
In this phase we prepared the land for the manure composting unit. We completed this phase in 2023.
Phase II
In this phase, we started construction of the foundation, which we completed in 2023.
Phase III
This phase consisted of the actual construction of the composting unit, a phase we have already completed.
Phase IV
This phase will see the installation of the equipment, composting machine, packing/packing line and ancillary equipment required.
We anticipate completing this phase in July 2024.
STATUS:
Construction of the composting building was completed in 2023. We are awaiting the delivery of the composting machine, which will be delivered from the manufacturer’s facility in July/August, and thereafter the installation of the machinery, to begin operations at the compost plant.
Phase V
This phase will take place in the third quarter of 2024, and will consist of the actual start-up of the compost manufacturing process.
Phase VI
We plan that once this project is completed and the composting process is started, we will be able to install solar panels on the roof of the compost plant.
We will be able to sell the compost to wineries, vegetable producers both in Romania and abroad.
The success of this plant also depends on the development of manure composting units on our other farms.
As far as the composting plant is concerned, the machines and equipment that will be used are designed to process organic waste efficiently and produce a high quality end product in a short time.
Composting is a natural and efficient way to manage organic waste while producing a valuable soil amendment. The high temperatures generated during the process not only decompose the waste but also provide a biosecure environment for the farm.
At the company level, since 2021, we have aimed to reduce the purchase of chemical fertilizers and use the farm manure we have in a much more efficient manner, as it presents superior qualities for both the soil and the plants.
DN AGRAR implements modern soil conservation technology in its farms through the use of minimum tillage, which is environmentally friendly.
To achieve this goal, starting from 2022, we have made significant investments in this direction by acquiring specialized equipment with high capacity. With the help of this equipment, we apply a large portion of our semi-liquid organic fertilizers by incorporating the farm manure directly into the soil, thereby greatly reducing the risk of losing valuable nutrients through leaching or evaporation.
Through efficient and environmentally friendly management practices, we have achieved significant reductions in costs related to chemical fertilizers. We have also been able to reduce nitrogen losses by directly incorporating semi-liquid manure into the soil, thus achieving precise natural fertilization for our agricultural land.
Another benefit of directly incorporating semi-liquid fertilizers into the soil is a significant reduction in olfactory discomfort.
Starting from 2022, we initiated the project of implementing the SAP – ERP – Enterprise Resource Planning digital solution, which is defined as a unique IT platform useful for monitoring, controlling, and managing all activities, processes, and operations within a company.
The first company within DN AGRAR in which this integrated business solution was implemented was Lacto Agrar Farm in June 2022. By the end of 2022, we implemented the SAP-ERP system in all four farms within DN AGRAR, namely Lacto Agrar, Apold, Cut, and Prodlact.
In April 2023, we started the implementation of this digital system within DN AGRAR Service, and by the end of this year, we plan to implement the SAP solution in the other companies as well.
Through the implementation of the SAP-ERP integrated solution within DN AGRAR companies, we will have consolidated business processes, automated daily operations, and advanced management and reporting functionalities.
Business processes will be streamlined, adding value to the company through the use of ERP – SAP Business One. All business information will be integrated into a single, comprehensive, and scalable system. We will be able to quickly respond to the most challenging scenarios with advanced Business Intelligence tools. Our employees will have the opportunity to be dynamic and mobile through intuitive mobility solutions. We will benefit from visibility, control, traceability, and transparency for all business flows within the company, ranging from procurement and sales to production, logistics, and financial processes.
At company level, we are preparing to upgrade to the Main Market of the Bucharest Stock Exchange in the coming years.
This year, more precisely on February 2, 2024, we celebrated our second year on the AeRO exchange market of the BVB. We are convinced that we will be ready for the transfer to the Main Market, the main factor in this regard being the market conditions, followed by the share price development.
In preparation for the transfer, we have signed a contract for the implementation of IFRS standards with a company that will help us with reporting for 2022 / 2023, in order to be ready for the access to the Main Market.
This is a project that we will be accomplishing in phases. Currently, we are working on the implementation of IFRS standards in the SAP system. Our target is to report in line with IFRS standards from 2025.
We have carried out an analysis of the structure of the entire Group in order to find the most efficient solutions.
We are at an advanced stage of simplification, we started this process on January 1, 2024 and we expect to finalize it by the end of 2024.
