Murcian producer and exporter association Proexport is warning its members of the need to maintain rigorous financial controls after two of its members recently filed for bankruptcy.
Agroherni and El Niño del Campo initiated bankruptcy proceedings within days of each other due to spiralling debts.
The former, a major lettuce producer with more than 2,300ha of production in Spain and the UK, announced its decision after losing two lines of credit, while Lorca-based El Niño del Campo filed for bankruptcy in July due to serious short-term solvency problems, after seeing some of its financing lines disappear.
Fernando Gómez, general director of Proexport, insisted that these were exceptional cases and that the sector was in good health.
“We have been told that the sector is very consolidated and that it generates a lot of confidence. It is operating normally,” he said in comments reported to La Verdad.
“That does not mean that we mustn't be vigilant, and so we invite our members to reflect on what has happened. We must maintain the fundamentals of good financial practice to ensure an optimal commercial base and not simply grow for the sake of growing.”
Gómez added that "neither of the two bankruptcy proceedings raises the risk factor within the agricultural sector, nor does the entry of investment funds into several companies make us the most attractive segment of the economy”.
The Proexport director noted that credit to agricultural companies increased by 19 per cent between 2015 and 2017 and that the association had previously warned of a possible excess of liquidity.
Joaquín Gómez, president of stonefruit and table grape association Apoexpa commented: “There is always concern, but in general the debt figures are low. These are two specific cases in a very large sector”.
However, bank sources warned that liquidity problems would occur in more companies; particularly those who had overextended themselves taking out loans to invest in new land, machinery and expansion of their facilities.