Generali SpA

    PREMISES & GLOBAL SERVICES

    Genagricola has invested in Romania targeting forests

    Generali Italia’s agri-food holding is again investing in Romania and has bought two natural forests covering a total area of 1,770 ha.

    Genagricola - the first Italian agricultural holding by size of cultivated land - is once again investing in Romania and has purchased two natural forests (De Fay and Deleni) in the north-east of the country covering a total area of 1,770 ha.

    The area is covered with oaks, lime trees, beeches, ash trees, cherry trees, maple trees, hornbeams and several other species. It is a sort of nature reserve characterised by hundreds of thousands of large-size trees that have been living there for decades, sometimes centuries. This natural forest is not man-made but has developed over the time, thus ensuring the highest level of biodiversity.

    This investment has strengthened the presence of Generali Italia’s agri-food holding in the country, where back in 2002 it had bought two large estates in the north-west for a total area of 5,000 ha of cultivated land.

    Forests have been constantly decreasing since the nineteenth century and are fundamental ecosystems to fight against climate change. They are sustainable and potentially endless resources, as well as long-terms investments that are less affected by market fluctuations. This natural resource will be enhanced through severe and controlled maintenance in compliance with the strict Romanian legislation on tree harvesting. This system is consistent with the significant growth of timber demand worldwide. According to estimates, timber demand will exceed 2.5 billion cubic metres per year - with Europe and the US in the leading positions - with a 30% increase compared to current demand. This is why Genagricola has focused on this type of investment, which is similar to other asset classes.

    “This operation is in line with our core business. It is a long-term investment with very small fluctuations over the time and good annual returns, which is sustainable and renewable” - as stated by Mr. Giancarlo Fancel, Chairman of Genagricola and Chief Financial Officer of Generali Italia. “This acquisition implements one of the key values underlying Genagricola’s management, i.e. sustainability. On the one hand we can protect a unique and attractive heritage, which is fully natural and rich in biodiversity, on the other we can make a long-term investment with strong and positive environmental impacts”.

    “We have exploited this investment opportunity mainly because we can go back investing in silviculture. Genagricola has already been working in this sector in Italy, though with smaller plots of land - explained Alessandro Marchionne, Genagricola’s CEO - but also because the experience acquired in Romania by other Group companies has shown that these investments are successful in the long-run”.

    To this purpose, Genagricola has set up Genagricola Foreste, a company in charge of managing and administering the activities connected to the new Romanian forests.