Listed firms branch out into new sectors to boost profit margins

By Anestis Dokas

An ever increasing number of Athens-listed companies are expanding their activities in a bid to increase their profit margins in the context of the lingering financial crisis. Firms that own substantial real estate property which is proving hard to sell are turning to agricultural activities such as the cultivation of tomatoes, mushrooms, grapes for wine, olives for oil and even bottling mineral water.

The shareholders of Kyriakidis Marbles decided at their annual general meeting last June to boost the firm’s corporate profile with the establishment and operation of a unit to bottle mineral water for sale.

In January 2014, listed mining company Elastron’s subsidiaries Elastron Agricultural and Thrace Greenhouses planted their first cucumber and tomato crops in greenhouses covering 40,000 square meters. The hydroponics units are located on a plot of 225,000 sq.m. at Neo Erasmio, near Xanthi, and make use of nearby geothermal fields. The hot water from the geothermal fields can be utilized to cover 100 percent of the greenhouses’ needs for heating while being also used for irrigation.

The plot was leased at auction from the Agricultural Development Ministry for a 25-year period. The annual rent amounts to 40 euros per 1,000 sq.m.

In early 2013, Thrace Plastics, another listed company, announced it was setting up a new firm to cultivate hydroponic tomatoes in greenhouses. The original investment amounted to 1.7 million euros. Listed textiles firm Lanacam has entered the mushroom cultivation sector, enjoying satisfactory profit margins, while marble company Iktinos has now turned some of its attention to exporting wine and olive oil to China, and

Mevaco, another listed mining firm, has expanded to the production and placement of electronic signs, given that the cost of entering the sector was limited. It is done via the acquisition of know-how from a company in the sector with the gradual absorption of its activities.