4 important facts about Romanian food business

Romania is an emerging food processing location in Eastern Europe, and despite some challanges, more analysts predict: this country will be the bread basket of Europe.

When it's about European expansion in food business, it's good to know about opportunities provided by Romania:

#1 Romania is the only country in Eastern Europe which regards food industrial direct investments as a strategic business

The investment promotion of Eastern European governments typically focus on fancy industries like automotive, biotech, IT etc. Romania has a unique approach: they love agricultural and food processing investors, and government grants support food-related investments. (The high motivation of Romanian politics in food business are also represented by the fact: the EU-comissioner - "federal minister" - Dacian Ciolos is also from Romania).

#2 The Romanian food business -related population is one of the largest in Europe.

The agricultural population of Romania reaches 3 million people, far the largest number in Eastern Europe. This means low-efficiency, and the same time inexhaustible labour supply for any food business, including the highest level processing (the government is keen about re-training subsidies).

#3 Romania has the 2nd largest crop land in Central- and Eastern Europe

Romania is viewed as Poland in 5-7 years ago: the large farmland investments doubled-trippled the land prices in Poland. Currently, Romania has large and deeply underpriced croplands. The increasing agricultural production can be the base of any food processing business in the country.

#4 Challenges
The main structural challenges before Romania on the road to the top are the following:

• Small average farm size, a need for concentration in the industry. It's a returning task for Romanian goverments to improve farm structures and promote mergers in agriculture business. Foreign direct investors can aquire farms without limits, and domestic agri-companies also invest in land.
• Weak financial support, e.g: low-level bank loans. Getting a bank loan in Romania is not easy in food business, however relevant EU funds support the industry.
• Weak infrastructure: the transportation infrastructure and public utility services are under the average Eastern European level, but the above mentioned EU funds also finance large-scale motorway developments and infrastructural projects.

Background: ongoing agriculture reforms in Romania