FirstFarms is an investment company which, by using its investment strategy, is utilising the favourable investment options in Eastern European agricultural activities. FirstFarms purchases, modernises and runs farming companies and land in Eastern Europe in order to optimise their operation using Danish agricultural management and know-how, so future production of agricultural produce (crops, milk and pigs) will be competitive in terms of price and quality as well as making the operation profitable for the company's shareholders.
Agriculture in Eastern Europe is an interesting investment object, which historical has been reserved for a smaller circle of investors, because such investments are very capital-intensive. FirstFarms is a listed public limited company, that gives more people the opportunity to participate in these investments.
FirstFarms considers that investment in agriculture and land in Eastern Europe is an attractive investment option as a result of:
- Increasing purchasing power in the countries and hence increasing demand for high-quality, locally produced produce,
- Lower salary and cost levels as well as lower investment level per production unit,
- Low agricultural productivity and consequent potential for increased productivity as a result of the provision of management expertise,
- Political interest in Eastern European EU countries in order to stimulate agricultural production, utilise production potential and increase the degree of self-sufficiency, and to phase-in EU agricultural support programmes,
- Increasing cash crop prices as a result of steadily rising political interest in stimulating demand for vegetable cash crops for alternative energy production,
- Fewer political and regulatory limitations on animal numbers and thus the potential to utilise economies of scale in agricultural production,
- Highly fragmented agricultural industry with the potential to participate in a restructuring process with the unification of smaller farms into larger, profitable units,
- Future increases in land prices and other tangible assets in agriculture, i.a. as a result of ineffective pricing for agricultural assets, and a continued development of financing possibilities in the industry,
- Large number of farming companies with large land areas for sale at attractive prices.
FirstFarms can be characterised as a modern knowledge company. Business foundation, back ground and market conditions are shown below.