Project idea

Agro Group-1 Ltd (Agro Group) is a wholesaler of machinery and equipment registered in February 2016 in Pleven, Bulgaria. The founder of the company is a successful and serial entrepreneur Aristovoulos Michail Chaikalis. The company specializes in the wholesale of agricultural equipment, bridging the gap between customers seeking to purchase agricultural equipment and suppliers.
The company supplies large industrial machinery and its components to its B2B customers on a contract basis. More specifically, the company looks for needs in agricultural, industrial equipment and their components upon the request of its existing and new customers. After that, the company offers options for specific equipment that can solve the customer's needs. Upon the approval, the contract for supply is signed and a production order is placed among Agro Group’s existing suppliers. Once the order is manufactured, it is delivered to the customer. The supplied equipment ranges from GPS trackers, tractors, components to production lines for manufacturing products.
Agro Group has an excellent reputation in the market and widespread business connections, accumulated during its active operations since 2016. The company started the year 2023 with a total working capital of 133 187 (lev), of which 84 237 (lev) is its own available funds as of January 1, 2023, and 48 950 (lev) is the income from the previous year's operations received in the current account in January 2023.Thanks to the smooth work of the team and professionalism, these financial resources allowed us to achieve a turnover for the year of 2 053 357 (lev) and an operating profit of more than 417 576 (lev). Thus the initial capital with the help of a series of equipment sales was able to bring the company a substantial profit.
The company sees huge potential in 2024 and 2025 years to get many more contracts for supplying large industrial machinery and its components. AGRO GROUP-1 LTD sees the potential for increasing the number of transactions and their average value. The company plans to sell equipment on more favorable terms due to shifting the need to advance payment for equipment production from the customer to the company. But this requires more serious capital investments than the company can afford now.

Agricultural market description and size

Europe's agricultural market is diverse, with the European Union being one of the largest global producers and exporters of agricultural products. The sector accounts for around 1.5% of the EU’s total GDP, employing about 10 million people across the continent. Major crops produced in Europe include cereals (wheat, barley, and maize), sugar beets, and grapes. The EU produces approximately 150 million metric tons of wheat and 66 million metric tons of maize annually. It is also a major player in the wine industry, producing about 160 million hectoliters of wine each year.
The agricultural market in Europe is experiencing steady growth, with a CAGR of around 2-3% overall. However, sectors like organic farming and agri-tech are seeing higher growth rates. The organic sector has been growing at a CAGR of approximately 8-10%, driven by increasing consumer demand for sustainable and environmentally friendly products.The EU's Common Agricultural Policy (CAP) provides substantial funding to support sustainable farming practices and rural development. The policy has been instrumental in promoting innovation and sustainability in agriculture, with a focus on reducing carbon emissions and enhancing biodiversity.
The EU is a major exporter of agricultural products, with key exports including wine, spirits, dairy products, and processed foods. The total value of EU agricultural exports was around €210 billion in 2023, with key markets including the United States, China, and the Middle East.The EU's Green Deal and Farm to Fork Strategy aim to make food systems more sustainable. These initiatives include targets to reduce pesticide use by 50% and increase the share of organic farming to 25% of total agricultural land by 2030.

Executive summary (business plan and financial model)

The company is looking for a loan of 2 000 000 EUR (~3 915 457 lev) at 14.6% per annum with a repayment term of 14 months.

The received funds will be allocated to purchase equipment under contracts signed with its existing and new customers. Signed contracts refer to agreements already made and fixed with customers for the supply of equipment and components. After signing a supply contract, the company signs a contract with the manufacturer to produce and deliver the required equipment. By expanding the order list among existing customers and adding to the customer list, the company plans to make at least 5 times more equipment deliveries in 2024 and 2025 than in 2023. Agro Group intends to divide the fundraising into ten rounds: within each round it intends to raise EUR 200 000 EUR (~391 545 lev)

Key financials

• The company is seeking a loan with an interest rate of 14.6% with a repayment term of 14 months
•  Agro Group demonstrates a year-on-year increase in revenue: in 2023, it recorded EUR 1 050 024 in revenue, up from EUR 987,650 in 2022.
• The company’s operating profit for 2023 amounted to EUR 926,160
• As of 2023, Agro Group had EUR 719,100 in total current assets, up from EUR 368,220 in 2022
• In 2023, Agro Group recorded EUR 21 930 in fixed assets
• Agro Group has a healthy credit history ranking according to Creditinfo, an independent aggregator of credit history information

Collateral and guarantees

The loan is backed by a collateral: Agro Group would provide the equipment it intends to purchase with the loan and will offset its existing manufacturing equipment on the company’s balance.