Romania, despite its great agricultural potential, faces a significant trade deficit in the food sector, a strategic problem that affects national security and the country's economy. Imports of agri-food products have reached worrying levels: about 47% of domestic consumption is fueled by foreign goods, compared to 2.4% in 1995. Countries such as Germany, Italy, Hungary and Poland are among the main suppliers.

But the prospects are of a great change, with significant opportunities that are opening up for the food industries. This is the opinion of Daniele Iacona , head of Italian desk CEE of Schoenherr, an international law firm. Below we host his speech on the issue.

The Balkan country also exports many raw materials and low-value-added products, while importing processed and industrialized foods. For example, in the case of pork, it imports 18.4 kg per capita, exporting only 1.1 kg. The result is a domestic market flooded with foreign products, while local food processing infrastructure is insufficient or obsolete. This gap contrasts with the evolution of neighboring countries such as Poland, Hungary and Bulgaria, which thanks to targeted policies and technological investments have developed food surpluses.

Need for technological investments and factories 4.0 in the Romanian food sector

Romania is therefore facing an urgent need for targeted technological investments, especially in the field of factories 4.0 for food production. The current industrial infrastructure is not sufficient to support a modern, competitive and diversified local production, capable of fully meeting the growing needs of the domestic market. This situation creates an extraordinary opportunity for developed and highly specialized countries in the food sector, such as Italy and Germany, to play a key role in Romania's industrial progress.

Advanced technologies, such as Artificial Intelligence, Internet of Things (IoT), Blockchain and Robotics, are key tools to transform the Romanian food production landscape. The introduction of smart, automated factories that can adapt to the specific needs of the local sector would not only optimize production, but also respond to new challenges in terms of sustainability, safety and traceability.

The adoption of these advanced technologies, through the transfer of know-how and innovative industrial models from countries with consolidated experience, would allow Romania to exploit its great agricultural potential and create modern, self-sufficient and highly competitive food chains. This would reduce dependence on imports and, at the same time, contribute to generating added value locally , stimulating economic growth, creating qualified jobs and improving the quality of food products.

Investing in the modernization of the Romanian food sector, therefore, not only represents a business opportunity for investors, but is also a strategy to promote innovation and long-term competitiveness in the Eastern European market.

INVESTALIM: A Program for the Modernization of the Romanian Food Industry

The INVESTALIM program, launched by the Romanian Government on June 30, 2023, aims to reduce dependence on agri-food imports and stimulate local production. Active until 2026, the plan offers financial incentives to develop and modernize the food sector, favoring the creation of new production units, the expansion of existing plants and the diversification of production.

The program is aimed at Romanian companies and requires a minimum contribution of 25% from beneficiaries, while the remainder can be covered by loans guaranteed by the Rural Credit Guarantee Fund. The amount of aid is regulated by the intensity limits set by the HG 311/2022 regulation. The disbursements, managed by AFIR, will be completed by 2031.

To date, nine companies have launched investments for a total of approximately EUR 440 million, of which approximately EUR 265 million are covered by non-repayable grants. The projects include meat and oil factories and the first Romanian frozen potato production unit. Overall, the program envisages total investments of EUR 800 million, financed in several phases.

A Promising Sector for Private Equity

The Romanian agri-food sector represents an extraordinary opportunity for private equity funds. Investments in Foodtech and cutting-edge infrastructure could generate significant returns, also taking advantage of the incentives offered by the Government. The union of private capital, advanced technologies and local agricultural resources can create a modern, sustainable and competitive food supply chain.

Conclusions

Romania's food deficit is an urgent challenge, but also an opportunity to turn a problem into a strength. With the support of specialized investors, state aid and innovative technologies, the country has the potential to become a productive hub in the food sector. Investors and funds, specialized in the sector, are called to actively contribute by ensuring Romania's advancement towards an autonomous and competitive food industry.