Food & Agri

21 september 2023

Pioneering Sustainable Grain Trading: The Journey of Spartac Chilat and Prograin

This article is part of a series of interviews by Anders Invest's Food & Agri team. Here, we look at people and activities from our portfolio companies. In this interview, we meet Spartac Chilat, the founder and CEO of Prograin Organic. A company that operates in the field of cultivation, processing, storage, trading and export of organic grains, seeds, and pulses in the Republic of Moldova. They were the first company to introduce organic food and agriculture in Moldova and help farmers transition from conventional to organic practices.


History of Spartac and Prograin

Spartac has been involved in the food and agriculture industry since graduating from the Academy of Economic Studies of Moldova in 1997. Throughout his career, he held several positions with agricultural companies; focusing on the distribution, logistics, and trading soybeans, fertilizers, and grains across Moldova. What truly captivated him was the concept of uniting farmers and integrating them into a cooperative network. Leveraging his industry knowledge and network of distribution partners, buyers, and farmers, Spartac identified a promising opportunity in the grain trading industry in 2012, leading to the establishment of Prograin. Together with four former colleagues, he started his new venture.


Having an in-depth understanding of conventional farming, Spartac was aware of its flaws. Fueled by a conviction to harness the full potential of Moldova's fertile landscape, he observed that ordinary operators lacked respectful land treatment, leading to reduced long-term fertility. The increasing use of chemicals and fertilizers deteriorated the ground and raised concerns about public health. Furthermore, competing in conventional farming against larger operators who used cost-leadership strategies posed obstacles with low margins, often undermining and eliminating smaller players. Therefore, Spartac recognized to take a more holistic view and initiated a transition to organic production in 2015 with Prograin. During this time, he met Dirk and Michel, his first Dutch connections, who were crucial in establishing the foundation for a later partnership with Anders Invest.


"Prograin is deeply committed to aiding farmers by providing input supplies, certification, technological support, grain handling, logistics, legal assistance, and other essential activities. These endeavours, although crucial, require upfront investments. A significant challenge to note is that 80% of farmers struggle to make these initial investments without a direct return. This calls for a shift in mindset. Due to the sustainability aspect of our business, it's crucial to transition from short-term thinking to a long-term approach. While an investment today might take longer to realize profitability compared to conventional farming, with patience and understanding, it will ultimately become highly lucrative. This is not just due to enhanced soil health but also because of the opportunity for premium pricing.

For a truly sustainable future, collaboration is vital. As we've always believed, "You cannot be sustainable if your partners are not sustainable." Together, with a united vision, we can ensure that both the land and our farming partners thrive."


Anders Invest saw this niche market's favourable business climate and high growth potential in Moldova. Spartac explains: "Anders Invest brings their extensive expertise in food and agriculture, along with a long-term vision. We knew this was the perfect opportunity to start making a difference within the industry."


Unique Value proposition of Prograin

Prograin operates throughout Moldova's entire value chain of organic grains, seeds, and pulses. "We are dedicated to supplying high-quality organic products with complete traceability, ensuring a seamless journey from the field to the consumer's plate."

Prograin ensures efficient collection and storage logistics and has invested in state-of-the-art organic processing lines. This commitment to infrastructure development allows Prograin to access organic grain markets effectively. They are Moldova's first IFS (International Featured Standards) certified company. Prograin's commitment to quality control ensures that products meet rigorous standards before export. They promote various crops, including spelt, wheat, oat, sunflower, corn, sorghum, mustard, green pea, yellow pea, soybean, rye, beans, alfalfa, and buckwheat. On top of that, they started the Moldova Organic Value Chain Alliance (MOVCA). An NGO that supports the growth and success of organic agriculture throughout Moldova and actively advocates for subsidies and pro-organic policies with the government. 


A bright future ahead

The future of Prograin appears promising as organic production gains importance in the agricultural landscape. Spartac envisions significant growth driven by crop rotation, regenerative farming, and subsidies for green initiatives. The company invests in soil fertility programs to boost yields and increase profitability. Growth rates of more than 10% per year are anticipated as Prograin continues to navigate and excel in these different facets of the business.


In conclusion, Spartac Chilat's journey in the food and agriculture industry has culminated in the establishment of Prograin, a pioneering force in Moldova's agricultural landscape. His vision of becoming a market leader and fostering a cooperative network among farmers has driven Prograin's success and has only just started. With the strategic partnership with Anders Invest, Prograin has a bright future, aiming to expand its reach and connect with more farmers while ensuring high-quality products and complete traceability from field to plate.


Other blog

Food & Agri

Read more

04 june 2024

Food & Agri

Unfolding CSRD This article is part of a series of short blogs by the Food & Agri team at Anders Invest. This article is specifically written for individuals and companies that are interested in or affected by CSRD. In total, 50,000 companies will need to comply with this legislation in the coming years. Additionally, companies who do not need to report will face additional pressure to supply information and data regarding their sustainability performance from B2B customers. Are you involved with a company that will need to comply with the CSRD or needs to generate impact data? Then this article is meant for you. Let’s unfold it’s basic concepts together.   The Corporate Sustainability Reporting Directive (CSRD) is a piece of legislation developed by the European Union which passed on January 2023. Starting January 1, 2024, CSRD intends to ensure that large and listed companies will  report and disclose sustainability information in an elaborate and consitent framework in their management reports. It builds upon previous legislation through: an extended scope including a gradual integration of large companies, standardized requirements, assurance requirements, a digital format, and integration into management reports. Given the extensive scale of the directive, it is very likely that most companies are affected by this directive (either directly or indirectly). Let’s put together some basic concepts in this article to unfold CSRD and understand it’s mechanisms. Why did CSRD came into effect? CSRD aims to address climate change, stakeholer salience and governance malpractises. The driving force behind the CSRD is the European Union's ambitious goal, as outlined in the European Green Deal, to become the first climate-neutral continent and achieve a pollution-free environment by 2050. The Green Deal is the overall sustainable growth strategy of the EU. To direct capital to investments that drive sustainable solutions, the EU made an Action Plan on Financing Sustainable Growth (APFSG) which consists of a set of policy initiatives. To prevent greenwashing and set aligned activities for sustainable investments, the EU taxonomy regulatory framework came into effect in 2020. Basically, CSRD is required to increase transparancy through disclosure of sustainability information, enabling EU taxonomy to work. Overall, CSRD’s goal is not to report for the sake of reporting, but for the sake of transitioning to a green economy with the relevant public information to do so. However, it is difficult to asses how much of the effort will be translated to actual impact. How will CSRD impact the business climate of Europe? Starting in 2025, the first companies need to report on their ESG impacts and opportunities over the year 2024. CSRD compliance is phased in, depending on the type of company. The first report year for the application of the new regulations will be structured as follows: In 2025, companies already subject to the previous non-financial reporting standards, particularly large public-interest entities with more than 500 employees. The subsequent year, 2026, marks the inclusion of other large companies, specifically those with over 250 employees. By 2027, the reporting requirements will extend to include listed Small and Medium-Sized Enterprises (SMEs). Finally, in 2029, non-EU companies generating more than €150 million in revenue within the EU will also be required to comply with these reporting standards. Gradually, more than 50.000 companies will need to report a maximum of 11.000 datapoints per year. The European Reporting Advisory Group (who prepared the standard) estimates that the one-off costs are around €287.000 and recurring cost are €319.000 for companies the first companies to start in 2025. For later companies the costs are €146.000 (one-off) and €162.000 (recurring). As you can see, the amount of work and costs involved with the mere compliance, let alone impact, are significant. Next up, what is in the actual report? What will be in the report? Before CSRD, the annual report consisted of a management report, followed by an audit report and financial statements. The sustainability statements are based on the European Sustainability Reporting Standards (ESRS) and consist of General Information (ESRS-1), General Disclosures (2), Environmental information (ESRS-E), Social Information (ESRS-S), Governance Information (ESRS-G). Thus, CSRD is the piece of legislation as directed by the EU, ESRS are the standards that specify what to report.                List of topical standards: ESRS E1 Climate change ESRS E2 Pollution ESRS E3 Water and Marine Resources ESRS E4 Biodiversity and Ecosystems ESRS E5 resource use and circular economy ESRS S1 Own Workforce ESRS S2 Workers in the value chain ESRS S3 Affected communities ESRS S4 Consumers and end-users ESRS G1 Business Conduct ESRS 1 and 2 serve as a guideline for the general sustainability reporting. The cross-cutting standards define the information to be disclosed about material impacts, risks and opportunities related to sustainability aspects. An understanding of the structure, concepts and general requirements for the preparation and presentation of sustainability information is to be reported. For the topical standards, one is required to conduct a double materiality assesment to map impact, risks and opportunities in relation to the different topics. All topics that are material in the value chain of the company have to be reported and substantiated with data. Accordingly, all topics whose impacts are either materially related to the environment or society (impact materiality, inside-out) or which have a short-, medium- or long-term financial impact on the company and can thus significantly influence the company's development and performance (financial materiality, outside-in) have to be reported. Once all material points are covered, the report will be auditted by an external assurance party. As you may see, it will prove difficult to operationalise this directive and the amount of abbreviations by itself is a real headache. In the next article, we will go in more detail on the impact on the business landscape for Food & Agri and what our strategy involving CSRD is.

Read more

02 may 2024

All blogs