Three companies of the Hajdú-Bihar Kurucz group, which claims to be dominant in the pork market, declared bankruptcy at the same time last week.
- Kurucz Agro Agricultural Services Kft.,
- Kurucz Farm Mezőgazdasági Kft.
- and Pig-Trade Kereskedelmi és Szolgáltató Kft.
The news was noticed in pork market circles not only because the solvency of a medium-sized player with a total turnover of well over HuF 10 billion was shaken, but also because it is one of the family businesses that are prioritized by the government. In addition, the agricultural government has been pouring billions into the pig sector for years in order to reverse the trend and increase the volume of domestic livestock and meat production. They also spend a lot to provide help from time to time to companies that become insolvent, even to the same business several times in a row.
The Ministry of Agriculture encourages developments and investments, one example of which is the Kurucz Group’s new meat plant in Sárrétudvari, which is “the most modern Hungarian meat plant in its size range” and was handed over by Minister István Nagy himself in a ceremony not so long ago, in November 2019.
The HuF 3 billion investment received a subsidy of almost HuF 1.5 billion, but the group also received public money in other areas: they won billions of subsidies and loans for various research and development projects from EU sources.
Despite this, the success story turned into insolvency.
It is a large agricultural enterprise with a medium-sized slaughterhouse, and the Kurucz Group was recognized as an up-and-coming group of companies on the market. The company started with pig farming, but has now developed the entire vertical, from fodder production through the slaughterhouse and meat processor to the fish kitchen. According to their website, they farm 45,000 tons of feed on 3,500 hectares of land, eight pig farms, 8,000 sows, 140,000 fatteners, 6 million servings of food – condensed into numbers, this is what they say about the group, which produces its own feed and breeds and slaughters the animals, but it also carries out processing and sales itself.
No specific bankruptcy was mentioned in the balance sheet reports submitted more than two months ago, but the auditor of the main company, Kurucz Agro, has already sounded the alarm, referring to the financial indicators and the loss, drawing attention to the fact that “the management must take urgent measures to avoid a financial crisis “. The company recorded sales revenue of HuF 6.7 billion and showed a huge loss of HuF 653 million. At the end of last year, the total debt was close to HuF 4.9 billion, the greater part of which, HuF 3.5 billion, was short-term debt payable within a year and HuF 1.3 billion was long-term liability (of which HuF 935 million was an investment loan). Kurucz Farm’s balance sheet didn’t look any better either, it included HuF 5.1 billion in revenue and HuF 498 million in losses, and debts exceeded HuF 4 billion here as well. The trading company, Pig-Trade, had a turnover of 2.8 billion last year, accumulated a loss of 105 million forints and accumulated debts of 1.6 billion.
It is written about the business of the three Kurucz brothers that they continue the business of Ferenc Kurucz, who started with a single pig in the early 90s, but “nowadays we have managed to become a key player in the sector”. In addition to the dramatic increase in the price of energy, feed prices tripled in two years, and on top of that, the group’s feed-producing areas were hit by drought. All this and the “negative bank perception of the pork sector” led to a serious lack of liquidity – Ferenc Kurucz detailed the reasons for the bankruptcy.
The announcements have already been published on the group’s website, according to which there will be a large-scale operation at the Sárrétudvari center on September 27-28-29: the creditors of the three companies were invited to bankruptcy negotiations for consecutive days, now the creditors have 30 days to sign up for the procedure. Based on the announcement, they are working to ensure that the companies continue to operate, before the bankruptcy settlement hearing, the parties involved will receive the settlement proposal and the reorganization plan, so that they can decide whether they see enough imagination in the recovery plan, or whether they are willing to waive part of their claim, and if so, what payment schedule is accepted.
Photo: Kurucz csoport – Facebook page