Grup Serban Holding (BSE ticker: GSH), a Romanian group of companies active in several areas in agriculture, has signed a new significant contract with PepsiCo under which it will deliver potatoes for Lay's chips produced in Romania.

This is the third year of collaboration between the company and PepsiCo. Grup Serban will float its shares on the Bucharest Stock Exchange’s AeRO market on February 28, 2022. In December 2021, the group raised RON 12.7 million (EUR 2.56 mln) from investors in a private placement for its shares.

“We look forward to continuing to work with PepsiCo and thank them for their trust. Potato chips represent a niche for Romanian agriculture,” said Ovidiu Bucataru, CFO of Grup Serban Holding.

He added: “Signing this contract means improving the financial performance in the medium term, considering the predictability and evolution of capitalization prices. The production of potatoes for industrialization contributes to the increase of the group's turnover and, therefore, the profit and cash flow, bringing an income of RON 50k per ha. One hectare of potato chips generates the same income as four hectares of cereals or oilseeds.”

To increase production capacity for this intensive crop, Grup Serban Holding will invest in an irrigation system adapted to the new directions of the European Green Deal. Under the new system, irrigation is carried out by dripping, a method by which water consumption is reduced by 50%, energy costs by 30%, and fertilizers and pesticides are reduced by 50% and 25%, respectively. The cost of such an investment amount to approximately RON 20,000/ha. 

At the end of 2021, the company raised RON 12.7 million from investors in a private placement, which will contribute to financing the group’s development projects. After the listing of GSH shares on the AeRO market, the group plans to raise RON 25-50 million (EUR 5-10 mln) in funding each year to develop all the group's business lines.

In 2020, Grup Serban Holding registered a Consolidated turnover of RON 312 million (EUR 63 mln) and a net profit of RON 24 million (EUR 4.9 mln).

editor@romania-insider.com

(Photo source: the company)