Good Practice - Project
FirstFarms Hungary Ltd - Development of a pig farm
Forty jobs and energy savings from CAP co-finance for a Hungarian piggery project.
General information
RDP Priority
- P2. Competitiveness
RDP Focus Area
- 2A: Farm’s performance, restructuring & modernisation
RDP Measure
- M04: Investments in physical assets
Beneficiary type
- Farmer / land manager
Summary
A CAP-funded investment project expanded the capacity of a Hungarian livestock facility to create 40 new jobs. It also enhanced business cost-effectiveness and improved climate contributions for one of Hungary’s biggest pig breeders.
This story of the Danish-Hungarian FirstFarms Ltd began 20 years ago and has led to the company introducing Danish expertise, pig genetics and technology. They are working to reduce their carbon footprint and actively advocate cooperation and knowledge sharing with other local pig breeders.
In 2022-2023, the firm used EU funds from Hungary’s Rural Development Programme (RDP) to build a 2 000-place sow colony and adjoining pig nursery. The investment was preceded by a long period of preparation, during which suitable locations had to be found, construction plans had to be drawn up, and building permits had to be obtained. The construction - for which co-finance from the European Agricultural Fund for Rural Development (EAFRD) was also granted - took place extremely quickly and was completed in just 14 months.
Results
- The company can now breed 160 000 pigs, instead of the previous 90 000 pigs, per year.
- The capacity of their sow farms increased from 2 500 sows to 4 500 sows.
- The number of employees has increased from 40 to 80.
- The newly installed solar panels cover 8% of the new plant’s energy needs.
Promoter
FirstFarms Hungary Ltd
Funding
Total budget: ~ 28 053 935 (EUR)
EAFRD: ~ 5 121 973 (EUR)
National/Regional: ~ 1 280 493 (EUR)
Private/own: ~ 21 651 469 (EUR)
Ressources
Documents
Good Practice Report - FirstFarms Hungary Ltd - Development of a pig farm
(PDF – 1.28 Mo)
Liens
Context
FirstFarms Hungary Ltd started 22 years ago in Denmark and expanded its pig production expertise into Hungary in 2002. They redeveloped a small pig farm in Orosháza in southeastern Hungary, entering into cooperation agreements with the surrounding fodder growers to ensure the necessary supply of fodder and the collection of manure. Later, a larger 2 000 place facility was planned in Gádoros, 10 km away from Orosháza. It was built in 2005 following licensing.
From 2008, RDP funding helped to modernise the livestock farm further to accommodate 2 500 sows and their young, raising approximately 90 000 pigs annually. However, the owners felt that their business was not yet ‘scale-efficient’, so they decided to look for a co-investor, either in Hungary or Denmark. In 2017, the Danish company FirstFarms A/S bought the business from its private owners, who became shareholders in what was, from then on, a new stock company listed on the stock market. This is how the Hungarian subsidiary of FirstFarms A/S and FirstFarms Hungary Ltd were created.
Twenty years ago, the neighbouring farmers saw the influx of Danish expertise and capital as a threat and feared losing out to this new competitor. However, they have become cooperating partners as the company introduced a completely new attitude from Denmark: social contribution and support. A local professional network was created based on this Danish model, through which partner farmers regularly exchange experiences, hold professional meetings and learn from one another by sharing their knowledge.
The company also promotes ideas related to improving how farm businesses interact with the environment and reduce their ecological footprint, i.e. the third pillar of sustainability. Exceeding the minimum environmental requirements prescribed by law, the company pays attention to key emissions and water management and has also introduced improved animal welfare measures.
Objectives
The main aims of this RDP project were to:
- Create a 2 000 bed sow farm together with the associated breeders.
- Further develop a pig farm business through cost-effective scaling of production without losing sight of environmental and social commitments.
- Boost the number of pigs bred locally to reduce Hungary's need to import pigs (around 700 000 per year are imported from Denmark, the Netherlands and Germany).
- Overcome labour shortages and maintain rural populations by creating good jobs with strong labour conditions for local people.
Activities
Project activities included:
- Selecting the location for the two new sites (sow colony and pig rearing) as close as possible to the centre of Gádoros.
- Drawing up the construction plans and submitting the application for a building permit for the new sites in Telekgerendás and Pusztaföldvár.
- Creating two new sites at Telekgerendás (85 505 m2) and Pusztaföldvár (68 771 m2). Construction began in February 2022 and was completed by May 2023. The construction work was carried out by local companies and involved moving 30 000 m3 of earth, using 750 tonnes of steel and 20 000 square meters of sandwich panels, as well as laying 1 750 truckloads of concrete.
- Equipping the sites with the best available technology, including vaporisation cooling panels, photovoltaic solar panels, a mobile application system to follow production results and a slurry system for heating.
The company’s goal for the 2025-2026 period is to expand the current farm of 2 000 sow beds to 4 000 beds, increasing the total capacity to 6 500 beds together with the development of the associated pig nursery. This growth will create jobs for 20 more people.
Main results
- A total of 40 new jobs have been created at the two new locations, thus increasing the number of employees from 40 to 80. The next planned expansion will create a further 20 jobs.
- The newly installed solar panels cover 8% of the energy needs of the new plants.
- The construction investment enabled the company to breed 160 000 pigs per year (up from the previous 90 000 pigs per year). The next planned expansion will enable a further 70 000 pigs to be bred each year.
- The capacity of the company’s sow farms increased from 2 500 sows to 4 500 sows. The next planned expansion will increase this to 6 500 sows.
- The slurry heat pump system was brought from Denmark and is among the first installations in Hungary. The technology has since been adopted by other Hungarian companies.
- Since Hungary's rural areas can experience labour shortage risks, it may not be easy to source enough trained workers. The company therefore opted for training staff 'on the job'. Their work and training are organised according to a defined process that is set out in a manual that addresses, in stages, every aspect of the job. In this way, even a worker with no prior knowledge and experience can advance their skills task by task with the supervision and support of their manager. This programme was awarded a 'Responsible Employer of the Year' award in the large company category.
Key lessons
- CAP co-funding for climate-smart agri-food systems can create jobs and reduce emissions.
- Finding the right workforce was vital because human capacity can be challenging in the region. ‘On the job’ training proved useful for filling skill gaps in local rural workforces.
- Success for significant investment projects relies on significant planning and foresight. This can include contingency planning because recent times show that unforeseen crises can loom suddenly with large impacts.
- Investing time in understanding application processes for EU funds is useful because it builds knowledge that can be reused for new developments.