Good Practice - Project
Valoryz Production Rice Processing Ltd - making Hungarian rice more resilient
The CAP helps a Hungarian family farm business reinforce its long-term resilience for producing rice and millet competitively.
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
Although Hungary is not a large rice-producing country in terms of yield, there is considerable potential in producing high-quality rice. The Valoryz family business, for example, farms rice in Békés County. They needed a modernised processing facility to help improve productivity and remain competitive.
CAP co-financing helped the company construct a modern, enclosed 1 544 m² facility, which was completed by 2023. As part of the project, a state-of-the-art, high-capacity rice huller was installed, more than doubling processing capacity to reach a tonne per hour.
Thanks to this EU assistance, the family firm's entire processing system was relocated to create a high-quality and hygienic environment. Additionally, renewable energy sources (solar panels and geothermal energy) were implemented to increase energy efficiency. The CAP's funding also helped the company’s competitiveness and export capacity to improve significantly, allowing them to meet the growing demand for high-quality organic rice and millet products more effectively.
Results
- Overall, the development enhanced the company’s competitiveness, expanded its market access opportunities, and strengthened the visibility of high-quality, organic Hungarian rice and millet products. As a result of these improvements, further growth is expected, driven by the development of new products and the expansion of export markets.
- The project directly supported the retention of five full-time jobs and the creation of two new full-time positions.
- Outcomes more than doubled the processing capacity, reaching a tonne per hour. This enabled the company to process rice and millet in larger volumes with consistent quality.
- Energy costs were significantly reduced by solar panels and geothermal heating.
Promoter
Valoryz Production Rice Processing Ltd.
Funding
Total budget: 675 000 (EUR)
EAFRD: 270 000 (EUR)
National/Regional: 67 500 (EUR)
Private/own: 337 500 (EUR)
Context
Rice cultivation in Hungary is primarily concentrated in Békés and Jász-Nagykun-Szolnok counties, where the Körös rivers provide the water necessary for irrigation. Rice production is time-consuming and resource-intensive, as it requires constant flooding and significant infrastructure maintenance.
Hungary had up to 40 000 hectares dedicated to rice cultivation in the 1950s, but this area has declined to around 3 100 hectares currently. Although Hungary lags behind large rice-producing countries in terms of yield, there is considerable potential in producing high-quality rice.
Valoryz Production Rice Processing Ltd. is a family-owned business based in Békés County, in southeastern Hungary. The company specialises in cultivation, processing, and export of premium-quality rice and millet. Starting in 2018, they began acquiring farmland, and today they cultivate 170 hectares (60% leased, 40% owned). They also cooperate with four other farmers, from whom they purchase strictly controlled, high-quality raw materials.
Approximately 95% of their crops are certified organic, and about 90% of their products are sold on EU markets, including Germany, Lithuania, Latvia, Slovenia, Austria, and Croatia. Today, the company produces and processes around 1 800 – 2 000 tonnes of rice and 300 tonnes of millet annually.
Millet plays a key role in the company’s strategy due to its high drought tolerance and earlier harvest time compared to rice, allowing for optimised workflow and better adaptation to decreasing rainfall levels.
A rented processing facility used by the rice farm eventually became outdated. It could no longer meet the increasing demands of hygiene standards and production capacity. EU funds were used to help support the Hungarian family farm overcome these business challenges.
Objectives
The aim of the project was to establish a modern new farm building with a closed-loop processing system that complies with food safety, environmental, and market requirements. As part of the development plan, solar panels and a geothermal system would aim to help provide much of the new facility’s energy needs. Specific objectives were:
- Establishment of a modern crop processing plant that meets food safety standards.
- Increased processing capacity.
- Improved product quality through closed-loop processing.
- Enhanced energy efficiency by using solar and geothermal renewable energy sources.
- Strengthened market competitiveness and export capacity.
- Preservation of local jobs and support for economic activity in a rural area.
Activities
Project actions involved:
- Construction of a new processing facility In 2022, Valoryz Kft. built a modern, 1 544 m² closed-loop rice processing plant in Szarvas, meeting the highest food safety and quality standards. The construction was carried out by a local contractor.
- Installation of new processing equipment. Existing technologies, such as the rice mill and silos, were relocated into the new facility, and a high-capacity rice hulling machine (a tonne/hour) was bought from expert Chinese rice machinery manufacturers. This new equipment more than doubled the plant’s processing capacity.
- Integration of a fully closed processing system. Thanks to the new facility, the entire rice processing operation now takes place within a closed system, significantly improving product quality and food safety.
- Introduction of renewable energy sources. As part of the project, solar panels were installed on-site, supplying approximately 65% of the facility’s energy needs. In addition, heating and crop drying are powered by geothermal energy to further reduce the plant’s environmental footprint.
- Foundation for capacity expansion and product development. The new facility and technological upgrades have laid the groundwork for further product development, including the launch of millet processing.
Main results
- Overall, this development enhanced the company’s competitiveness, expanded its market access opportunities, and strengthened the visibility of high-quality, organic Hungarian rice and millet products. As a result of these improvements, further growth is expected, driven by the development of new products and the expansion of export markets.
- The project directly supported the retention of five full-time jobs and the creation of two new full-time positions.
- As a result of the 2022 developments, Valoryz Production Rice Processing Ltd. more than doubled its processing capacity, reaching a tonne per hour. This enabled the company to process rice and millet in larger volumes with consistent quality.
- Energy costs were significantly reduced through the installation of solar panels, which now cover approximately 65% of total energy consumption, alongside the implementation of geothermal heating.
- The establishment of a closed-loop processing facility improved both hygiene and product quality, ensuring compliance with EU food safety regulations.
- Revenue grew proportionally with the expansion of processing capacity, further supported by the introduction of millet cultivation and processing.
Key lessons
- The company faced significant burdens due to inflation. Consequently, the development costs were much higher than originally planned. Although they had anticipated some cost increases, the actual situation far exceeded their calculations. The challenge was further compounded by the fact that during construction, they received daily price quotes for building materials and had to make immediate decisions.
- Overall, it can be said that an entrepreneur must be prepared to face constant and ongoing challenges.
- Millet can play a key role in rural diversification for a range of EU farming communities due to its high drought tolerance (and earlier harvest time compared to crops such as rice), allowing for optimised agrifood sector workflows and better adaptation to decreasing rainfall levels.
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