Leo Lambrea: Compliance with internal processes is essential for growth

In-depth interview with Leo Lambrea, the CEO of UBM Agri Trade SRL

UBM Holding Nyrt, Hungary’s largest trader of feed raw materials and market leader in the feed production sector, continues its expansion in Romania. UBM Agri Trade SRL, the Group’s Romanian subsidiary, acquired a storage facility for 30-50 thousand tonnes of agricultural produce in Budești, with a total area of more than 104 thousand square meters. As a result of the acquisition, UBM Agri Trade SRL, which generated revenues of RON 261.02 million, i.e. nearly HUF 20 billion in the previous financial year ending 30 June 2022, will be able to further increase the profitability of its activities.  We spoke to Leo Lambrea, the company’s CEO, about the acquisition and the operations of UBM Agri Trade, covering the road to success and Lambrea’s career to date.

UBM Investor Relations, Hungary: With the acquisition of the new plant, what are the opportunities for UBM’s further growth?

Leo Lambrea, UBM Agri Trade SRL: The purchased facility is a warehouse for agricultural crops, which will significantly increase UBM’s potential in terms of both commercial relations and logistics. In practice, this means that from now on we will have direct contact with producers and farmers. There will be no need for any intermediaries. The Budești investment focuses mainly on the market in Constanta, which is currently the most liquid market in the region. The acquisition will significantly simplify the delivery of goods to Constanta. The development also includes the renovation and reconstruction of the railway track, which will allow us to transport the goods practically directly from the silo to the port of Constanta, enabling us to optimise transport costs.

What is the specific added value resulting from this acquisition?

LL: Six years ago, UBM entered the Romanian agribusiness market as a new participant. We tried to promote the UBM brand in the most efficient way possible, which soon started to deliver the expected success. With this investment, however, UBM has become an irreplaceable business partner in Romania. We have made it clear that the Group’s presence is not simply a way of exploiting a few strategic opportunities, but to become a powerful market partner with significant economic influence.

Can you give us some insight into your career path and your professional background?

LL: I graduated from the Bucharest University of Economics in 2007 and obtained my Master’s Degree in Economics and Management and in International Economics from the same university. Following that, I was offered an excellent internship opportunity at Cargill, which was basically my first employment. Over time, I worked my way up the ranks from commercial trainee to salesman, to commercial manager and then to regional manager. During this period, I had a few opportunities to work with UBM through brokers, but never had direct contact with the company. I was not unfamiliar with UBM though, I knew about UBM as a very important participant in the Hungarian market. After leaving Cargill, I had a short detour of less than a year as an employee of a local trading company. Then, in 2017, I was approached from UBM by Norbert Costea – a former colleague of mine at Cargill – and Andor Botos, saying they would like me to head the Romanian office opening at the time. At first, I was hesitant to accept their offer, but eventually I said yes to it. I actually got my career launched thanks to a personal connection. It was Norbert who recommended me for the job, while Andor saw the potential in me and put his trust in me.

UBM puts a strong focus on how it treats its colleagues. What is your personal HR strategy?

LL: This is one of my key strategies. In commerce, it’s all about the way you treat people. We normally choose colleagues who have an ownership mindset and can embrace a good work-life balance. Balance is crucial. Assets should never be more important than people. We want to create an environment where no one works overtime. Not once have I seen any of our employees leave after six in the evening and never a colleague come to work before 9 in the morning. Holidays are also essential, no matter which season or time of year it is. We want to create a working environment in which employees feel supported and encouraged to relax and recharge.

In most cases, success is not linear. What have been your biggest personal challenges?

LL: For me personally, most of the challenges came from being an employee for most of my career, for more than 10 years. Then I became a semi-entrepreneur, a managing partner, which required a completely new approach. I had to change my mindset so I could be an employer and an employee at the same time. It took me two or three years to get to the point where I started to see the company simultaneously as my own, the owners’ business and the employees’ source of income, so to say, one shared business.

What has been the biggest challenge for you?

LL: It’s been difficult for me in the last six years since we started the company to find people I can trust and who will be committed to me and the company in the long term, people who we can grow with. There are moments in the commercial life when you lose money and when you gain money, but no matter how hectic the pace is, you as a leader must remain the fixed point by maintaining the same discipline and enthusiasm.

What was the point at which you reached a milestone and felt you needed to change some of your thought patterns?

LL: That’s a good question. I felt I needed to change the way I thought about myself, while I was in the process of going from employee to entrepreneur. In the beginning I was like, “Look, I need a Plan B. What if this doesn’t work? What if I’m not good at company building?” It took me a few years to realize that it was all up to me, I was in charge.

Acquisition is a new stage, a step forward, part of the expansion. I told Peter Horváth, one of the owners and CEO of UBM Group, that in six years we have achieved the maximum of what could be achieved without assets and significant investment under the circumstances. At that point development has reached its upper limit, so we need some type of investment, whether it is a warehouse, a small plant or a factory. We agreed on that. I know that I may have many challenges with this investment, but it is ultimately something that I wanted and that I have to take responsibility for.

What are your plans for the future?

LL: We want to grow. Our main goal is to make reliability one of our greatest corporate values, which we can achieve through growth. By this I mean that if the expansion goes at the pace we have outlined to shareholders, we can become a highly reliable supplier of goods in Romania in the long term, both locally and in the export market.

We want to seize every opportunity that presents itself. Since last year we have seen a lot of new investments in the Romanian market. Since the outbreak of the war in Ukraine, more and more Ukrainian companies have moved their headquarters from Ukraine to Romania. Other foreign partners are also showing a strong interest in the market in Constanta, given that they can no longer use most of their Black Sea ports. Multinational companies have also become interested in the Romanian market. Romania is a European country, a member of NATO, we have access to the Black Sea, Constanta is the largest port on the Black Sea, we have the Danube, we possess 8 million hectares of arable land, and we are witnessing economic development. Recently, GDP has exceeded that of Hungary, which is an outstanding achievement for us. There are a lot of business opportunities in Romania.

Can you name a business or professional challenge that UBM Agri Trade is currently facing?

LL: This is not exclusively our challenge: it is usually difficult to find employees. We encounter more and more that the prospective employee wants to receive more than to give. When I graduated college, I remember I would literally take any job just to earn money. Now, when you interview a candidate coming out of college, all you get is demands. They require bonuses, home office, high payment and the list of demands is quite lengthy. Obviously, the people who work for us fit into UBM’s collective creed and they are also clearly committed to the greater good of the company. We currently have 12 “white collar employees” working in the office, with an additional five or six through the acquisition of the Budești silo.

In addition, there is a growing mobility within countries.

LL: We are witnessing a demographic change, more and more Romanian citizens are migrating to work abroad, and simultaneously we observe the influx of foreign employees into Romania.

Generally, the inhouse processes are business critical. Can you name a process or process element that can add value and is quite extraordinary and unique to UBM?

LL: One thing I understood when I spoke to the owners of UBM Hungary is that Enterprise Resource Planning (ERP) is not negotiable. If you want to grow as a company and become a multinational company over time, you need to control everything. It is inconceivable that processes are not complied with and therefore damage is done to the company. There is an imperative need for ERP. Its implementation can be quite burdensome, but it pays off and is useful in the long run. Control can bring significant efficiency gains.

What do you think might be the reason for a company’s failure to grow?

LL: If the source of the problem is not the first line manager, it could be the employees or the processes. It’s a trust issue, and I definitely focus on making my working relationship with my colleagues better and healthier. Until now we have been a small team, and I am aware that above a certain number of employees, 20-30, new or different challenges are bound to arise. These will be handled as well.

How do you replenish yourself, what do you do to relax?

LL: Mens sana in corpore sano, “A Healthy body holds a healthy soul and mind”, I believe in that, which is why I go to the gym four times a week, no exceptions, discipline is very important to me. Even if I had a challenging day at work, I’m still at the gym at 6 pm. In my opinion, training is especially important when you have a hard day. The body is able to regulate and recreate itself, all the support hormones are released during exercise. Besides, both my wife and I like to cook and eat a healthy diet. I’m not vegan or vegetarian, but I eat within a single calorie range every day, which might sound crazy. I have been doing this for the last 10 years and it has worked.

It’s little things like watching my kids go to kindergarten that fill me up. Continuously following the progress of my two little boys, watching them learn, playing sports. Hearing good news from my friends, being happy for their successes, and also knowing my family is in good health. And to add to the whole picture, I am also absolutely delighted with business success and the profits.

What is essential for a lead management position at UBM? What is it that led you to a senior management position?

LL: My ethics. I grew up with it. It’s what my first job at Cargill taught me. On the very first day, I was told their slogan, which happened to coincide with my personal creed: “my word is my bond”.

If you have any questions, please do not hesitate to contact us at investors@ubm.hu.