HIGH PROFIT POTENTIAL FARMLAND INVESTMENTS MANAGED BY EXPERT UKRAINIAN FARMERS

About us  

"Faro Capital" is a consulting company in the field of mergers and acquisitions, our services are provided by a team with expertise in the agricultural industry of Ukraine, throughout their careers, our team members have built deep professional relationships and acquired in-depth knowledge of companies, trends, and knowledge related to the main industry directions that are the most attractive for investment in the country. In the absence of experience and vision of the development and management of the purchased company, we will help manage the company's products production cycle and sales and trading operations of the company's products. We maintain long-standing working relationships with leading law firms, auditors, and banks in Ukraine, and we also have a strong network with public sector decision-makers. We are focused on existing, medium, and large, well-functioning agricultural companies in Ukraine. To comprehensively optimize processes to increase crop volumes, as well as, possibly, expand these companies. We apply experienced management, knowledge of agricultural processes and technologies on inexpensive and fertile Ukrainian soils. 

These ingredients are combined in a perfect combination with benefits for all parties involved; 

  • Contribution to the growing demand for food - The agricultural sector of Ukraine receives a positive and sustained momentum 
  • At the regional level, the local population has social and economic benefits 
  • Direct investors in farming (land) holdings receive higher returns than conventional Agri funds.

Why Ukraine

Good quality land, combined with low wages, guarantees the growth of agricultural production with high returns, and the opening of the land market. 

This will lead to a large increase in the cost of the most important resource for agricultural production: land. The Savills Global Agricultural Land Index shows that less developed EU markets such as Romania, Hungary, Brazil, Argentina, and Poland experienced the highest percentage increases in agricultural land value between 2002 and 2010. Ukraine has every chance to show a similar level of growth.

Why Agricultural Sector

Good quality land, combined with low wages, guarantees the growth of agricultural production with high returns, and the opening of the land market. This will lead to a large increase in the cost of the most important resource for agricultural production: land. The Savills Global Agricultural Land Index shows that less developed EU markets such as Romania, Hungary, Brazil, Argentina, and Poland experienced the highest percentage increases in agricultural land value between 2002 and 2010. Ukraine has every chance to show a similar level of growth. Agricultural entrepreneurs traditionally own land and know that land is a safe investment. We all know stories about the sale of land and the increase in its value over time. However, the land was not in great demand from either private or institutional investors. It was unknown and unexplored, an unconventional type of investment associated with specific knowledge and understanding of the agro-market. After the 2008 economic crisis, the situation has changed. Until a few years ago, farmland did not feature prominently in the investment portfolios of most institutional investment agencies and brokers. However, due to factors such as stability, lack of linkages with other asset classes, and demonstrated fixed income, the interest of this group of investors has grown tremendously globally. Most of the world's agricultural land is owned by private individuals. However, over the past 5 years, investment funds have invested heavily in farmland, and according to a recent study by Barclays Capital, over the next 2 years, funds are again looking and will continue to look for opportunities to place their investments in farmland. This means that investments in specialized and fixed investment funds continue to grow. All institutional investors have been hit hard by the recent financial crisis, especially in Western countries. As a result, they are looking for safe and long-term participation. For them, farmland is very attractive. They view farmland as what they call a good investment base. A clear economic structure of supply and demand, depending, on the one hand, on the growing world population that needs to be fed, and on the other hand, on the limited or final factors of production (land). These fund managers can find land at a relatively low cost in various locations worldwide such as Australia, Sudan, Uruguay, the Balkans, Russia, Zambia, or Brazil. Agricultural land is becoming increasingly scarce. As noted earlier, the area of agricultural land available for growing crops is shrinking due to urbanization, climate change, political or economic instability, and an increase in biofuel crops. Conversely, the world's population is increasing dramatically, and consequently, the demand for agricultural land and raw materials for food production increases accordingly. The result is that the value of agricultural land is increasing and the sector is increasingly focusing on more intensive modern farming methods. Agricultural land as an investment, also called green gold, continued to perform better globally than most other assets. With the growing interest in this security sector during volatile times, investments by sovereign wealth funds (governments), institutional investment agencies, pension funds, family offices, and wealthy individuals are skyrocketing. Food provision is currently on the agenda for most governments. It is difficult to obtain data on total returns in many countries. However, an analysis of capital growth since 2002 of the three main categories of property investment - farmland, commercial, and residential real estate - clearly shows that farmland, from a consistent perspective, performs better than the other two sectors. Capital growth is traditionally considered to be the main reward for investors. Due to higher food prices, modern management, and farming practices, coupled with the opportunity to invest today in areas where agriculture is currently still performing poorly, the annual yield potential is very high. higher than before.

Food crisis

The Food and Agriculture Organization of the United Nations (FAO) has calculated that to continue to meet the growing demand, world food production should grow by 70% (!).


Agriculture is literally vital to the world. Agriculture is extremely dependent on soil and climate to obtain sufficient production. Continued drought or rainfall causes crop failures. If the crops are not productive, a shortage is created and our daily food prices will rise. If it becomes too expensive, deep political unrest quickly builds up (see, for example, “Arab Spring”).


According to the United Nations, in 2050 there will be about 9 billion people on Earth. 70% of this population growth occurs in the Arab region and Asia.


Due to this rapid population growth, agricultural land per capita will become relatively smaller. However, this deficit will also absolutely increase due to rapidly developing urbanization and climate change.


In addition, more land and crops are used to produce biodiesel and bioethanol. For example, rapeseed, wheat, corn, and cane sugar.


In 2012, unrest grew in various Asian governments. The continuing drought in both North and South America threatened crops such as grain and soybeans. The threatening crop failure in the major soft goods exporting countries brought back memories of 2007/08. Those days' high food prices caused profound social unrest in about fifty countries in Asia, Africa, and the Middle East.


Since then, an uninterrupted food supply has become a priority on the agenda of many governments. In particular, the governments of East Asian countries are closely monitoring the development of the soft goods market.


Rapidly growing numbers of Asians are transforming their social success into a more Western and protein-rich diet. This means that rice is being replaced by chicken, eggs, meat, and dairy products.

Agricultural Real Estate and Companies for Sale

Agricultural farming: 7270 hectares in the Ukraine(Nikolaev region).

Profile: growing grain crops. 

Profitability: 150-300 $/hectare

Payback: ~ 3-8 years

Price: on request


Agribusiness: 16,000 hectares in the Kharkiv region.

Profile: growing grain crops; vegetables; storage of grain (elevator with a railway branch); Cattle.

Profitability: 150-370 $ / ha +

Payback: ~ 5-8 years

Price: $ 40,000,000

Agricultural enterprise: 1308 hectares in the Rivne region.

Profile: growing grain crops;

Profitability: ~ 150-300 $ / ha +

Payback: ~ 5 years

Price: $ 800,000


Agricultural enterprise: 3650 hectares in the Odessa region.

Profile: growing grain crops;

Technique and infrastructure: yes

Profitability: ~ 150-250 $ / ha

Payback: ~ 4-5 years

Price: on request


Contacts

Kiev, 01023 Sports Square, 1A, 17th floor,







Email: info@farocap.co

Tel: +380502100021