The 70 hectares of the Mas de Colom farm, a former Cistercian monastery in TÃ rrega where Borges has installed his institutional headquarters, house the test bench for one of the agri-food group’s nuclear initiatives. This is the Pistachio project, which it develops through its listed business unit Borges Agricultural
The multinational offers advice and undertakes to process and buy the food to market it. And it is that the pistachio is more profitable than other nuts – the market price of some of its varieties usually exceeds 12 euros per kilo and it was the second most expensive nut for sale to the public in 2021, according to Statista – but it also needs more water to produce itself.
Managing water resources more efficiently and minimizing its consumption has become one of the great challenges of the company owned by the Pont family. This year Catalonia is facing a period of drought that, if extended, could jeopardize agriculture. Last year the production of dried fruit was at 40% due to the lack of rain and although episodes of severe drought tend to be cyclical, the scientific consensus suggests that the Iberian Peninsula tends to have a drier, hotter and more extreme climate.
David Prats, executive president and CEO of Borges, explained this week in the presentation of the group’s new growth plan that these are long-term processes. At the moment, he continued, they do not require a change in the variety of crops. Other areas where the group produces, such as Andalusia, Extremadura or Portugal, now do not have the great rainfall deficit that Catalonia suffers, he commented. However, the development of new irrigation techniques occupies the multinational. In the case of pistachios, they use pressurized irrigation. They have also begun calculating the water footprint of all their crops, a technique that allows for a 30% reduction in water consumption, and they have implemented deficit irrigation tests, as well as an electrostatic spray system. “Sustainability is an obligation and also makes us more profitable,” Prats pointed out. The investment planned for the next three years in energy efficiency improvements amounts to 30 million euros. The weather conditions will have, in any case, the last word.
The multinational has also faced the impact of the war in Ukraine on the food industry. Unlike other companies, the country was not a major supplier of seeds for Borges. The company gets its supplies mainly from France and Spain and is in charge of processing and preparing the oil it sells. But after the closure of Ukraine, other manufacturers went to look for the seeds in alternative markets, pushing the price to very high levels. “Seed oil tripled the price,” recalled Prats. The situation has been normalizing and now the highest inflation is in olive oil. The sharp drop in production due to the lack of rain and the heat have triggered the CPI for this food by 33.5% in February.
Another derivative of the Russian invasion, the increase in production costs, adds pressure to the income statement. In Bain’s last semi-annual report to the CNMV, sent last month, the business unit reported losses of 0.3 million euros despite having sold 4% more, up to 74.3 million euros. The company attributed the red numbers to the sharp drop in the prices of the main raw materials it produces, which directly affects Bain’s agricultural business, as well as a “significant increase in industrial and transport costs that could not be impact in full.”
Despite all these challenges, Borges plans to increase its turnover by 42% in five years, up to 1,000 million euros, and double profit, for which it also includes purchases. “Every year we encounter complex situations worldwide and we have always overcome them; Being diversified in products and markets helps us to do thisâ€, Prats stated this week. The group is supported by three different business units and has chained years with increased profits –see graph–. The goal: to make the company last another 125 years.
