1. The Ferrero company started using Serbian hazelnuts in its products – how significant is this step for Treesury and for the wider community of hazelnut farmers in Serbia?

The Ferrero company came to Serbia 11 years ago and started the development of this highly promising branch – hazelnut production. Based on the strategic agreement with the Ministry of Agriculture, Ferrero developed an entire network of cooperators with whom it managed to plant around 5,000 hectares of hazelnut plantations in ten years.

Last year, they held a ceremony – a ten-year anniversary of their presence in Serbia, which was organized for their partners, friends, and officials. On that occasion, they shared the information that the hazelnut from Serbia is of exceptional quality and that it passed all tests necessary for it to be used in Ferrero products. What is interesting is that the Serbian hazelnut passed the tests in only a little over a year, even though that process generally lasts much longer. They also announced their commitment to further development and a desire for a significant bulk purchase of this raw material in Serbia, as hazelnuts have shown to be an exceptionally high-quality raw material.

It is also important when such a company, a multinational corporation such as Ferrero, which uses around 25 percent of all hazelnuts produced worldwide for its own production alone, is present in Serbia. That is exactly what confirms Serbia’s potential as a hazelnut farmer, because we have ideal conditions here – both in terms of climate and soil quality, which are proven to lead to the production of high-quality hazelnuts.

As a large multinational company, Ferrero sells the highest-quality, certified planting materials, which is the basis for successful production, and also ensures successful placement. I would say that this is the biggest stumbling block for all agricultural producers, because, when they produce any culture, they need the assurance that they will manage to sell it and that the selling price will be adequate.

In terms of hazelnuts, this is exactly the case, because the largest consumer of hazelnuts in the world, Ferrero, is directly present here, makes bulk purchases of the product, and prices are formed based on the formula applied globally. So not in Serbia, but on foreign markets. And why is this the case? Due to the shortage of hazelnuts as raw materials, the confectionary industry in particular, but also Ferrero as the largest consumer of hazelnuts, has a great need to secure the highest-quality raw materials and that is where the big opportunity for Serbian farmers lies. The significance for Treesury is the same as for all other hazelnut producers – to be able to rely on a multinational, stable company, which has a long tradition and commitment to quality, which also demonstrated significant stability and commitment to its suppliers. This way, practically one support pillar is the assurance that the produced raw materials will be marketed.

2. Treesury successfully completed its first initial public offering of tokens – what do you see as key factors of that success?

I believe that the key factors of that success are the different areas of expertise of our team, all of which are put to use in one single project. Also, through the use of technology (sensors, drones, satellites, etc.), we receive a huge amount of data that is processed by artificial intelligence, and, based on such data, we can make much more precise and informed decisions, all with the purpose of getting better production results. I would also like to mention the importance of ecological sustainability of the project, and naturally the necessary finances, i.e. the financial expertise to structure such a financial product and market it the right way in accordance with the law.

Along with such interdisciplinarity of the team, I think that proper preparation is also key, or I should say, these two things go hand in hand because, in a way, we have been preparing for this project our whole lives. We have expertise in the field of hazelnut production and our own methodology that has been developed and refined over the course of 25 years, which results in 30–50% higher and better quality yields than industry standards. The last eight years were dedicated to intensive work on experimental plantations so that we could improve the quality and quantity of the yield. Also essential was the ample experience in finance and investment, especially alternative investments and the investment fund industry. We spent three and a half years working on this project before marketing it to ensure everything was professionally set up with maximum transparency and minimized risks. Expertise and preparation are the factors behind the success of this initial public offering. As a third factor I would add the selection of the right partners who supported us on our journey.

3. How does the concept “one token = one hazelnut tree” work and what kind of income can the investors expect during the 40-year duration of the investment?

One token equals one hazelnut tree. The buyer, i.e. investor, earns the income from that hazelnut tree for the next 40 years. With this investment, citizens can make greater return on investment compared to classic savings plans with banks or purchasing property. Investors can expect an annual income between 12 and 15 percent, which is significantly above the expected inflation rate, and this way, people are protected from property depreciation.

4. How does Treesury combine agriculture, technology, and sustainability and why do you believe that combination in particular is the future of investing?

At Treesury, we believe that the short-term approach to business and striving to maximize profits is absolutely the wrong approach, and that it cannot yield good results in the long run. We also believe that precisely this approach is the cause of many of contemporary problems, such as excessive pollution or consumerism, i.e. overproduction of low-quality products that have long-term consequences for the planet. We firmly believe that only the so-called triple bottom line approach is a sustainable and financially viable business model in the long run and that it will always yield the right results long-term. When profit goes hand in hand with the well-being of the planet and of course the society in which we conduct business, that always produces results and is the right way. This is the way in which we built our entire business model, which we believe covers all of these aspects in the right way. When we were designing our business model it was imperative for us to have a positive impact on the community we conduct business in and for our business to be ecologically sustainable. In that sense, Treesury put the technology in the service of agriculture as a fundamental branch, in order to make it more efficient and transparent, and in order to make it possible for a larger number of investors to invest in this key branch, making it more sustainable and resilient for future generations. By introducing innovation such as carbon credits, we also made the profitability in agriculture rise by opening a never before explored source of income for farmers, which has great potential. It is precisely this approach that separates Treesury from other business models, because by using technology, we are increasing the efficiency of agriculture and preventing the use of unnecessary resources.

For example, agriculture is the biggest consumer of fresh water. Up to 70 percent of world water consumption goes to agriculture. Using smart irrigation systems and sensors, water savings can be drastic, and at the same time, sensors can allow us not to overuse fertilizers or any supplements we use, therefore saving resources. On the other hand, we employ young people in rural areas where life is not so easy and from where young people usually emigrate to urban areas. We now make it possible for them to stay on the countryside, the place where they were born, and to have a quality and respectable life doing what they love.

We also provide them with additional education because, in order to use modern technologies, they need to go through training, and that is how they become competent on a global market. By using all technologies and such an approach, but also methodologies of regenerative i.e. sustainable agriculture, we protect natural resources. We pay equal attention to improving the soil quality and to renewing the organic matter in order to return the soil properties to what they once were. For example, in the last eighty or so years in Vojvodina, the level of organic matter in soil has decreased from 5 to only 1.5 to 2 percent. For those purposes, we use the regenerative agriculture methodologies – planting of cover crops and wind-protective layers which additionally contribute to the increase of biodiversity and prevent aeolian erosion, reduce the rise of temperature and clean the air from carbon-dioxide, and improve the soil quality. During the process of photosynthesis, hazel trees absorb a large amount of carbon dioxide, while, through the conversion of land used for the production of field crops into land used for growing hazel tree forests, we achieve an even greater positive effect on the carbon footprint due to increased biomass and reduced disturbance of the soil.

With this approach, we can ensure the sustainability and appeal of investing in agriculture, which attracts an increasing number of investors who recognize such business models as sustainable and profitable on a long-term basis. Therefore, green investments like Treesury tokens, which represent tokenized green bonds, are becoming more and more interesting to investors, because they fit into the investment strategies that many institutional investors have to make compliant with legislation.

5. You were a participant at GITEX GLOBAL in Dubai and EBRD Star Venture Summit in London – what opportunities came out of your participation and how do you view the internationalization of your model?

Participation at such events in the largest financial centers in the world such as Dubai and London greatly helps us understand which direction we should further develop in and how we should shape our financial products so that they would be appealing on the global financial market. These events represent an ideal opportunity for us to connect with the international community of investors, especially institutional investors, which is very important at this point of our development, so that we could form the right strategy for further development of our company.

Participating in such investor-oriented events has a two-fold importance for us. Not only in terms of forming our offer for investments in agriculture itself, but also from the aspect of providing capital for the rapid development of our company. For now, I can say that we have had tangible benefits – we have established connections with a large number of global investors from different parts of the world, which has initiated numerous concrete discussions about cooperation.

From the aspect of internationalization, in the short- to medium-term we look at internationalization in terms of raising capital from the whole world and placing said capital through agricultural projects in Southeast Europe. In the medium- to long-term, we also plan to expand to particularly the African continent, but also to Latin America, where we recognize really fantastic potential and we see big needs for our services, both on the part of local farmers and on the part of supply chains, to which our model ensures higher resilience and never-before-seen scaling in agriculture. Our current partners recognize the value that Treesury can provide them in other regions as well.

When it comes to the internationalization of investments, I would like to mention that the first initial public offering of Treesury tokens was open to both the citizens – residents – in Serbia and non-residents, that is to say foreign investors, and that exactly this was our idea from the start – to open ourselves to the global market. I can say with great pleasure that in the first emission, we had investors from three continents.

6. What are the particular benefits of hazelnut farming compared to other fruit cultures, from both the agronomic and the investment side?

We decided to go with hazelnut primarily due to the high demand and a certain market placement. Also, our region offers ideal conditions for hazelnut farming due to the exceptional quality of the soil and suitable climate for this crop. Hazelnut production is by far the simplest out of other crops, since it can be mechanized and requires significantly less maintenance. We have fewer problems in terms of labor and there is also the aspect of resistance to weather and diseases. Our multidisciplinary team has 25 years of experience in hazelnut production and its own production methodology which produces yields that are from 30 to 50 percent higher than industry standards. And there is also the positive impact on the environment, which can be additionally monetized by selling carbon credits. That is why we were confident the Treesury project would succeed.

7. Tokenization and blockchain are often linked to the high-tech industries – how did you manage to apply them in a traditional field such as agriculture?

Tokenization and blockchain offer much greater possibilities and flexibility to the economy. Specifically in agriculture, there is a problem of production financing, not only in our region, but on a global level. Agricultural producers mostly rely on their own funds or focus on traditional banking products that generally require significant collateral and have very rigid terms and high costs. With the help of security tokens, which represent digital securities, we made simple financing of agricultural production possible since farmers can directly address the open market using our solution and raise capital from the broader public. Also, the added value is that we follow farmers through the modernization and digitalization of agricultural production, which increases the efficiency of production itself, as well as the quality and quantity of yields, and creates the most transparent investment framework that investors expect. This model allows us to ensure the placement of manufactured goods through long-term contracts with industrial buyers, which require compliance with rigorous standards and large quantities of the product. In short, farmers raise capital through tokenization, digitize production and can be certain of the placement of goods.

The new generation of the blockchain capital market is available 24/7 and is far more efficient because it is automated, it guarantees the fulfillment of the obligations of the smart contract to the parties, and it implies a much faster transaction settlement with significantly lower costs. We have removed the major barriers that stopped investors from investing in agriculture: we have significantly reduced the minimum amount of capital, made it possible to invest without any necessary knowledge in the field, as all projects are managed by known professional agricultural producers, and improved liquidity, as digital tokens can be traded much easier and faster. Industrial buyers now get a stable source of high-quality raw materials that meet the most rigorous standards and can be scaled as needed.

8. In what direction are you planning further expansion of business? Are you planning to tokenize crops other than hazelnuts as well?

The priority in further expansion of business definitely remains on hazelnuts, since they are the raw materials that have a strong demand and in that sense, we have great potential to expand our business to tens of thousands of hectares. That is definitely the niche in which we will remain for at least a decade with, hopefully, an exponential growth in areas where we will plant.

Apart from hazel trees, we are planning to tokenize to other cultures as well, with a caveat that in that case, we will not be the agricultural producers, rather we will work on such projects together with proven agricultural producers. They will use our business model and be responsible for the production itself. They will be the issuers of tokens to investors. We already have several different cultures we are considering, which are mainly projects where we have known buyers that care about securing high-quality raw materials in ample quantities. If Treesury’s business model is followed, they will guarantee the bulk purchase of such raw materials.

9. How important is the role of state institutions and international organizations, such as the Ministry of Agriculture and EBRD in supporting your business model?

The role of the Ministry of Agriculture and all other state authorities as well is important for our business model, but also for all other market participants, because those are the institutions that create the business environment. In that sense, they are able to remove administrative barriers, but at the same time create a more stimulating environment for business development.

One specific example of these administrative barriers is the registration procedure for agricultural holdings. Our case was a bit more specific, as the agricultural holding is owned by a legal entity and in that sense, the registration process and certain technical limitations really caused us a lot of problems. But I have to commend the constructive approach of the Ministry, since we managed to overcome those problems in an appropriate amount of time so that our business would not be jeopardized.

Also, the Ministry of Science, Technological Development and Innovation, together with the Innovation Fund, created a stimulating environment for the development of innovative startups such as Treesury. We have a significant number of support programs at our disposal, from financial, professional and knowledge transfer ones, to support for entering foreign markets.

The role of international financial institutions such as the European Bank for Reconstruction and Development with its Star Venture program, and the World Bank with the Katapult Accelerator program, which is a part of the broader SAIGE project, is really crucial for a company like Treesury. Not only in the aspect of financial support, but also in the aspect of credibility those institutions carry with them. Investors investing in Treesury tokens see the support of international financial institutions to our company and because of that they gain greater trust, since they know that we have to conduct business in accordance with high standards and level of transparency in order to garner their support in the first place. In the finance industry, investors’ trust is paramount, as everything is based on whether the investor will have trust in a certain business plan, but even more importantly – whether they will have trust in the organization standing behind that business plan and its capacity to realize it.

10. Treesury allows citizens to invest in a greener future – how are you educating the market and building trust in such an innovative and still relatively new investment model?

We have invested a lot in market education, mostly in the domain of retail investors having in mind that in our region, the capital markets are not developed and that financial literacy is still not at the level it is expected to be.

We conducted education by transparently showing information and pointing out the benefits of these kinds of investments, benefits of the business model, sustainable investment... We made each segment of our business transparent and tried to introduce it and explain it to the investors in a simple way.

We also had a lot of help in that process from our partners – international financial institutions and other credible institutions, such as the BioSense Institute, which have been on the market for a long time and supported us in our project. That is an important element which contributed to the credibility of the Treesury company and our story, which we presented to investors.

Evidently, such an approach from us led to a positive result and attracted a large number of investors to our community, and secured support we needed for the realization of the first emission of Treesury tokenized green securities.