Agriculture loan

By investing 500 € or more, you will receive a present from Portuguese farmer - a bottle of red wine from his vineyard.

Carvalhal Estate has been a wine producer since 1998 with its own vineyards and winery.

Fernando Soares, graduated in Oenology from UTAD (University of Trás-os-Montes and Alto Douro). As part of his curricular internship, he carried out the same on a farm in the Vinhos Verde region (in an estate that belonged to the family for 200 years), however the owner had just acquired a wine estate in Alentejo.

Previously, its revenue came from two sources:

• Sale of packaged wine, bottled for the domestic market, exclusively through a distribution company catering to the HORECA channel (hotels, restaurants, and catering), was established. However, the transaction values through this channel fell significantly below expectations. This distribution privilege required substantially larger acquisitions. In January of last year, the producer and distributor decided that results should be shown within a six-month period, which did not happen. 
• Sale of bulk wine to other operators, where margins are low or non-existent. Starting in 2022, the decision was made to stop selling bulk wine due to low profitability and dependence on a few customers in this business area, making it susceptible to the "lobbying" of these buyers.

Over the course of two years, plans were developed to transform the bulk wine segment, into a product for retail distribution (supermarkets and hypermarkets). Thus, the entire commercial sector was reorganized in 2022 to meet the challenges at hand.

• Bottled wines for the HORECA channel, establishing an extended network of distributors to cover the territory. Currently, the farm have distributors in the municipalities of Braga, Guimarães, Famalicão, Lousada, Greater Lisbon, and throughout the district of Portalegre. There are plans to expand to Greater Porto and Madeira Island in the near future.
• Wines in Bag-in-Box (BIB) format will be sold in various supermarkets and hypermarkets, targeting the high-end market. The farm are currently present in six Leclerc stores spread throughout the country, several Intermarché locations, and some Auchans. Furthermore, they have plans to open a series of new points of sale in the near future. Internationally, their products are available in Brazil and Denmark through small importers. With BIB wines, the farm have already secured a supermarket chain in Luxembourg. Negotiations are underway with supermarket chains in France and the United Kingdom. Also in negotiations with importers from the Czech Republic and Canada. Their goal is to achieve an export share of approximately 20%. The results of the previous year only account for three months, as there was no commercial activity.

The reorganization's main objective is to increase profits by ceasing to sell wine in bulk and focusing solely on selling in Bag-in-Box (BIB) and bottled formats. The prices vary whether it's Bag-in-Box (BIB) or bottles. Regarding BIB, excluding packaging and associated costs, the price of wine is 1.35 euros per liter and 2.25 euros per liter for bottled wine in the lower segment range. The prices for bulk wine should range from 0.65 to 0.70 euros per liter.

The purpose of this loan is to buy more new wine vats once that company wants to sell all production in bottled formats, instead of bulk wine, which brings more value to the final product. The company is offering a forklift and 8 units of wine vat as collateral to secure the loan with a total value of 141 325 €, 23% LTV.

The Company has had a negative Net Profit during the last two years which mainly during 2022, was caused by the decision to restructure the Company, aiming to increase the Company's efficiency and increase revenue through the product quality increment. However, the company has positive EBITDA of Eur 61.5K and the Company has a good credit history for the last two years.