The brothers Mihai (43 years old) and Dănuț Rezeanu (45 years old), the owners of REFDAN COM SRL from Teleorman county, made a strategic purchase of a silo with access to the Danube
,which paves the way for a 30% increase in the volume of cereals and oilseeds traded annually. The most important thing is that the step taken by REFDAN offers, for the first time, to all large farmers in the area, the opportunity to negotiate the sale of their goods directly in the port of Constanța, so at a better price.

In a key moment for the evolution of the company REFDAN COM SRL, the Rezeanu brothers purchased with their own funds a fully operational silo with a capacity of 10,000 t, located within the Port of Corabia, with direct access to the Danube, which will connect it with the Port of Constanța. The selling company was Alcedo. It is a silo built in 2007, which has 6 metal storage cells, accessories and specific equipment and which has a built area of ​​1,766 square meters.

Through this last acquisition, the storage capacity operated by the Rezeanu brothers reached 105,000 tons, with storage facilities in Corabia, Islaz and Turnu Măgurele, being the largest warehouses in the area. The main objective of REFDAN COM targeted by this purchase was to increase competitiveness on the regional market of grain and oilseed trade, by reducing operational costs. With the silo located in Corabia Port in its portfolio, REFDAN offers the full range of logistics services, becoming the only multimodal operator in the area, the company’s current portfolio including solutions for road, rail and river transport. If, under the conditions of a normal year, REFDAN trades between 120,000 and 140,000 t of cereals and oilseeds annually, through access to the Danube, the company estimates an increase in traded volumes by 20-30%, up to 170,000-180,000 t, in good agricultural years.

At the same time, REFDAN also carries out operations in agriculture, where it works on 2,400 ha, using a palette of 12 cultivated species. For operations in the field, the Rezeanu brothers have a 4 million euro machinery park, renewed in 2019. In total, both in vegetable culture and on the storage and logistics side, the company operates with a team of 74 employees.

The cost of transporting grain can be cut in half

Mihai Rezeanu explained for Agrointeligența – AGROINTEL.RO why the latest purchase made by REFDAN represents more than an expansion of the portfolio of storage spaces.

“This is not just about an expansion of the storage volumes by 10,000 t, because that still only means an increase of 10% of the capacities we operated previously. The acquisition is not significant from a volume perspective, especially because these silos are strategically located, with access to the water, on the Danube, so we can become competitive at the regional level on the grain and oilseed trade market. The competition is quite high in the area. As is well known, we are fighting with some multinational corporations, whose presence is strongly felt. The strategic advantage we have at the moment is the much lower operational cost. Transport on the Danube has the lowest cost and now we can do it too. Comparing transport costs, if we consider road transport as the cost standard, which represents 100%, rail transport is somewhere around 70%, and river transport is 50% of the cost by road”, declares Mihai Rezeanu.

In order to give a “boost” to the grain trade, the Port of Corabia needs the involvement of the authorities

The Teleorman entrepreneurs still have a few steps to go in order to fully exploit the benefits brought by the new asset.

“There are still some problems that we hope to solve in a year or two. The water level in the port of Corabia is the lowest in all of Romania. It is a permanently clogging harbor that requires dredging. Today it is not possible to load barges at full capacity in Corabia port. We hope that through hydrotechnical works and investments that we will make together with the public authorities, in whose responsibility these operations fall, it will become an operational port all year round. In summer, when the water level is very low, the port closes. But although the port is not functional during the harvest, we did not necessarily take this silo for a commodity that we trade during that interval. We try to offer an alternative especially to the large farmers in the area, who also have storage capacities and who do not sell during the harvest period, but usually wait for more favorable stock market quotations”, explains Mihai Rezeanu.

Farmers will take their goods to the lip of the ship and collect port prices

Through this last investment, the businessman noticed the opportunity to build a fundamentally different business model from the existing service palette in the market.

“Through the silo in Corabia Port we want to offer an alternative not necessarily to those who sell from the field, who are under the pressure of the harvest and are in a hurry either to sell or to put their goods in storage, but we want to offer a logistical alternative to those who have storage spaces and want to benefit from the fairest possible prices for their goods. We know how the storage spaces were built in Romania: totally illogical, often not connected by means of communication that would allow them to be connected logistically to the consumer. We want to offer them solutions to sell their goods under optimal conditions for them. We don’t necessarily have to buy their merchandise. They can find a customer and we just do the logistics operation and barge loading. Basically we want to be a logistics operator in the area, not necessarily a grain trader. Unlike multinational companies, which do not offer this alternative to a farmer, of being able to go and negotiate the contract himself, with us farmers will be able to sell their goods directly in the port of Constanța through different traders, in a “free on board” (FOB) quotation ). But as a farmer, to be able to sell in the port of Constanța, he needs a sufficient volume of goods. It has to be a multiple of 1,000 t barges. If a farmer only has 300 or 500 t and doesn’t fill a barge, obviously they have to enter into a partnership with someone else. Under these conditions, we get involved and help him and can even negotiate the sales contract on his behalf. But if a farmer can load 10 barges, we only do the logistics part for him and he negotiates his own sales contract. If a farmer had to take his goods by road to the port of Constanța, the cost would be somewhere around 35 euros/t. By barge, it costs somewhere around 12 euros/t, and if we add the rest of the logistics expenses, it can reach somewhere around 16-17 euros/t. It would be somewhere in the middle. By choosing to work with us on the logistics side, the farmer remains depending on the year and the stock market quotations with a percentage of 5-15% more on each ton of grain sold. But once again, here we are talking about large farmers, who can sell multiples of 1,000 t”, he details the aspects that differentiate REFDAN’s range of services.

He wants to emphasize that REFDAN also offers services for key players in the grain trade. “At the same time, we also offer a solution for large grain traders. Depending on how they make a forecast on the ships, we can store their goods for a while, we can bring them to them in the required quality conditions, we can do a “mix and blend”, so that they receive exactly what they want they want, so that the goods leaving the Corabia area arrive in the port of Constanța for loading directly on the ship”, adds Mihai Rezeanu.