Details

50 hectares of land with 14,000 olive trees. 480 sq.m of existing buildings plus possibility to build another 935 sq.m. High profitability.

Agricultural holding exclusively for olive oil located in upper Maremma in Tuscany in a panoramic position 10 minutes from the sea.

50 hectares of land with 14,000 olive trees. 480 sq.m of existing buildings plus possibility to build another 935 sq.m. High profitability.

Farm buildings

The farm covers an area of about 50 hectares, of which about 40 hectares are olive groves, about 6 hectares are woodland and the remainder is used for buildings, outbuildings and service areas. A first substantial farm nucleus was purchased in 2004, with a further purchase of forest land of about 4 hectares in 2006 and arable land of almost 9 hectares in 2007.

Crops

The olive grove, about 40 hectares, occupies most of the surface area of the farm and is on gently sloping or substantially flat terrain. This makes it very easy to work with mechanical aids, a feature that is very rare on most Tuscan olive farms which are often set on steep slopes and therefore unsuitable for efficient working.

The olive grove was completely renovated from an agronomic point of view between 2005 and 2007, adopting the most modern agricultural technologies, which aim to make cultivation economically efficient, both in terms of quantity and quality, and in terms of cost.

After ploughing, levelling and draining the land, olive trees of the main Tuscan varieties were planted: Frantoio (about 5,250 plants), Leccino (about 3,100 plants), Moraiolo (about 1,400 plants), Pendolino (about 950 plants), Maurino (about 800 plants) and Leccio del Corno (about 600 plants). The remaining trees are Coratina (about 700 plants) and several hundred local plants that existed prior to purchase of the property. In total, there are about 13,000 olive trees.

The olive grove area was divided into 21 sectors to allow processing by individual varieties, and planting was done keeping in mind the use of specialized machinery for agricultural operations and harvesting. The spacing used was 5 x 6, with 330 plants per hectare (a density and thus an oil production per hectare almost double the Tuscan average).

In the winter of 2013-2014, the conversion of the farm to an organic system began. The 2017 harvest was the first fully certified organic one, while the 2016 harvest can be called “in organic conversion.” Regional grants alone related to the “in organic” activity exceed €20,000 per year.

The plentiful availability of water, thanks to three artesian wells, a self-supplied farm reservoir and a share of a consortium lake, has made it possible to equip the olive grove with a very modern mostly concealed fertigation system. In addition to being manually operated, the system can be programmed with a computer and controlled remotely, via the Internet, including by smartphone.

The olive grove is fully fenced with a 2-meter-high wire fence mounted on chestnut poles and is registered as fully closed (fondo chiuso), which prevents access to outsiders, including hunters. The farm is subject to a right of passage to three elderly local farmers who own a piece of forest that can be reached by crossing the farm (these are very rare occurrences).

The farm owns all the machinery and equipment necessary for agricultural work; all maintained in full working order. The farm also owns a modern bottling, capping and capsuling line, purchased in September 2009.

The investments made in agricultural restructuration and the possibility of using mechanized harvesting mean that the company represents a model in the field of national olive growing, being managed by a single full-time employee, with the advice of an agronomist and with the need for additional staff only during harvesting.

Production and marketing

Farm policies with regard to oil production and marketing have so far been conditioned by the fact that the olive trees are still in the growth phase and therefore with very limited production per tree. Until now, olive harvesting has been limited to those trees that were able to ensure a minimum threshold of product capable of ensuring a significant return with respect to harvesting costs. From 2015 to today, olive harvesting has increased from approximately 500 to 1,200 quintals.

Taking into account the limited quantities of oil produced to date, marketing has also so far avoided the burden of marketing and marketing costs. Most of the oil produced is given to a cooperative as PGI oil, at a price of about € 6.50 per kg. Some of the olives, harvested while maintaining cultivar distinction, are sold to local high-end oil producers at a price of € 85 per quintal (100 kg), and a modest portion of the harvest is bottled and sold at a price of € 7.5 for a 50 cl bottle.

In the coming years, as the quantities of oil that can be produced profitably increase, both harvesting and marketing policies will profoundly change. For harvesting, already from this year a part of the olive trees will meet the parameters that make the use of mechanized harvesting possible and convenient (the diameter of the trunk, from an agronomic point of view, and the quantity of olives produced per tree, from an economic point of view).

A marketing plan based on participation in oil competitions and industry events has been drawn up. In order to test the quality of the oil produced, a pilot production of about 2,500 bottles was carried out in 2008, divided into two oils that were presented at some competitions or selections, with excellent results.

In 2008 and 2009, to test the company's market potential, the oils were offered to high-end food establishments, wine shops and restaurants. The results of this survey were encouraging, with several dozen customers acquired without putting in any effort to enter the market. The oils were sold to commercial establishments at a price of € 90.00 per box of 12 bottles (including VAT and excluding transportation). In 2009 the commercial potential of San Frediano was also tested abroad, with orders from Germany and Belgium.

The farm's agronomic avant-garde features, with many cultivars and the concealed fertigation system, also allow it to rely on production that is less subject from year to year to the productivity changes of traditional olive farms, an extremely important aspect in order to set up a commercial policy based on stable customer relationships.

The company produces an average of around 43,000 litres of oil per year (assuming an average production per tree of 3.3 liters of oil, based on an average production of 20 kilograms of olives, an average yield of 15 percent and a 1.1:1 ratio of liters to kilos of oil). This production, without assuming any increase in the prices currently charged (€ 7.5 the 50 cl bottle), will generate annual revenues of about € 650,000, without taking into account regional contributions.

The cost structure reflects the company's modern and efficient plant; when fully operational, oil production costs (including pressing and bottling) can be estimated at € 2.8 per 50 cl bottle, or € 240,000 for total production of 90,000 bottles.

The revenue-cost margin when fully operational can thus be estimated at about € 400,000.

The farm is thus very different from the typical Tuscan olive grove, of just a few hectares, with the old agronomic system, low plant density and unsuitable for efficient cultivation using mechanical means. Instead, it is an almost unique reality in terms of size, agronomic structure and cultivation techniques in the national olive-growing panorama, capable of representing a very interesting investment from an economic point of view, while operating in a sector of great charm and tradition such as Tuscan olive-growing.

The buildings

The buildings include a main house on two floors with a total area of about 350 square meters, small buildings for agricultural use with a total area of about 85 square meters and an old brick pigsty with an area of about 45 square meters. The house is structurally sound and inhabited although the interiors can be improved aesthetically and the systems need to be overhauled or redone; in this respect, the “need” torenovate the house without having to put a hand on the structural parts is an added advantage, because it leaves the buyer free to redo the interiors to his or her liking, without having to pay for and demolish a previous renovation that may not match the taste or needs of the new owner.

 In 2010, the company obtained the necessary permits to build a new farm center with a total covered area of 935 square meters, including 260 square meters for staff housing, 100 square meters for offices, and 575 square meters for a shed, an oil mill room, a vat room, a bottling room, warehouse, workshop, and farm machinery shed - all without any urbanization charges being due. The project, in which the company invested about €75,000 for the set-up and administrative process, could be realized even in part or in several stages. The construction work should have started by spring 2012, and, having failed to do so, the project will have to be resubmitted and reapproved (which should be fairly easy to achieve, since the project has already been approved and there have been no changes in building regulations since its approval).

If desired, when resubmitting the project, it would also be possible to apply for a variance of the project that would add a portion intended for agritourism to the agricultural use of the farm center.

 Ownership

The farm is owned by a limited liability agricultural company (Società Agricola a r.l.). The company was established on an ad hoc basis, in 2004, at the time of the purchase of the farm of the same name, and since its establishment it has carried out the management of the farm as its only activity; the capital is wholly owned by a single family.

 In addition to the real estate (land and buildings) and movable assets (vehicles and agricultural machinery), the company also owns the executive project of the farm center and a long-term mortgage loan, with a residual amount of approximately € 500,000, maturing in September 2028, regulated at extremely convenient rate conditions.

 The Società Agricola a r.l. has tax-deductible losses of more than € 500,000, related to start-up and start-up costs, of which about € 200,000 have an unlimited maturity.

 The purchase of the company, in addition to being easier and faster, has the following potential advantages:

• the possibility of using the above-mentioned tax losses for tax purposes
• the possibility of fiscal use of depreciation still to be accounted for (in an amount higher than the amount spent to date in the company's financial statements)
• the absence of payments of registration taxes that would instead be due in the case of purchase of the real estate by an individual
• a lower cash outlay since the balance of the mortgage loan to be repaid would have to be deducted from the agreed price (the buyer would, however, have to release the sellers from the surety they provided in favor of the company and for the benefit of the lending bank) and cash on hand added
• the possibility of tax expenditures in future years that otherwise could not be deducted from taxable income in future years.

 To sum up

 The possibility of buying the company has many unique and convenient aspects:

• ease of connection
• scenic beauty and proximity to the sea
• much larger than average size
• state-of-the-art agronomic facility
• quality of the oils produced
• high market appeal and consequent placement in the high price range of the oils produced
• high economic potential
• possibility of real estate expansion with the construction of a modern business center, office and apartments for staff
• advantageous corporate form

 Request: confidential negotiations.