Companies, however, are still suffering from the lower purchasing power of Romanian consumers. Therefore plant closings continued and the profitability of the largest companies remained affected by the fiercer and fiercer competition over consumers. While Romanian brands like Napolact and Albalact continue to grow, La Dorna, another major Romanian brand is losing ground to less known brands.
Albalact climbs to second place in industry ranking
Albalact, the largest Romanian-owned company in the dairy industry, climbed to second place in the company ranking by revenue, beating Dutch-held FrieslandCampina but behind Danone Romania, whose core business is yogurt manufacturing.
Albalact, which makes yogurt, milk, butter, cream and cheese, ended last year with RON423 million revenue, an increase of 23% on 2012 and budgeted more than EUR100 million revenue for this year. The company launched a number of products in 2014, including Zuzu Max (yogurt for men) or the two-litter Zuzu plastic milk container.
LaDorna cheese brand replaced by President
French group Lactalis, the owner of the LaDorna group since 2008, replaced the LaDorna cheese brand with President, which is well known in Europe. The change comes in the wake of a rebranding process that the French group started in 2013 and completed this year. Besides the replacement of the brand, it also decided to close several dairy production facilities. According to the latest information available, it closed three milk-processing centers in Suceava and Neamt Counties, two plants, as well as several milk collection centers. Lactalis bought LaDorna group from businessman Jean Valvis six years ago.
Stephane Batoux returns to the dairy industry
Stephane Batoux, the French executive who came to Romania in 2009 to run the local branch of France’s Danone, returned to the dairy industry this year, after spending two years at the helm of Coca-Cola HBC, the local soft drinks market leader.
In mid-2014, Stephane Batoux took the job of Albalact chief executive officer, replacing founder Raul Ciurtin, who kept only chairman duties. Raul Ciurtin owns about 42% in Albalact indirectly via two companies registered in Cyprus, Crisware Holdings (26.86%) and Croniar Holdings Limited (15.67%).
Olympus investments in Brasov reach more than EUR75 million
Fabrica de Lapte Brasov (Brasov milk plant), the local subsidiary of Greece’s Olympus group, has invested more than EUR75 million in the Halchiu plant near Brasov, which ships 75% of its production abroad. This is the biggest investment in the dairy industry in a decade when hundreds of other dairy plants closed.
Export turned out to be a winning strategy for the Greek group, considering dairy consumption in Romania was one of the worst hit segments by the crisis. The export bet made Olympus a top five dairy producer by revenue. The company posted EUR54 million sales last year and ranked fourth in its industry, behind Danone, Albalact and FrieslandCampina.
Current estimates point to EUR70 million revenue in 2014, thus narrowing the gap to FrieslandCampina, which posted some EUR82 million revenue in 2013.
Muller started to make yellow cheese in Romania
Germany’s Muller, which arrived in Romania in 2008 via a joint venture with Central Bottling Company (CBC), a shareholder of Coca-Cola Israel, began a partnership with Five Continents, which owns a plant in Botosani (northern Romania) to make Romanian yellow cheese branded as Das Kaskaval.
Muller wants the brand to get a 3% market share by yearend. Its rivals on this particular product category are Hochland, the yellow cheese market leader, and Delaco Distribution. Muller’s other products include yogurt, cream and milk drinks. Muller Dairy accounts for about 15% of the fruit yogurt segment, a category in decline in Romania.
Muller has three plants in Germany, one in the UK and one in the US. Muller Dairy Ro posted RON51.4 million revenue and about RON11 million loss in 2013.
Prodlacta begins exports
Brasov-based dairy producer Prodlacta, of businessman Vladimir Jardan, will sell yogurts to a retail chain in Germany and plans to enter other foreign markets. The company is already shipping a quarter of its production to the Republic of Moldova. Besides exports, Prodlacta has also focused on retail and already has about ten stores of its own in Brasov, which it opened in 2013 and 2014.
Prodlacta exited insolvency in May last year, after being forced to file for it in 2011 due to losses in the previous years.
It ended the first nine months with RON29 million revenue, up 60% on the year-earlier period. It cut down loses by 6% to RON6.5 million. Prodlacta budgeted double revenue and lower losses, RON3.1 million in 2014.
FrieslandCampina keeps only two plants in Romania
FrieslandCampina announced this year it would relocate cheese production from the plant in Carei, Satu Mare County in northern Romania to the facility in Baciu, Cluj County in January 2015. The plant is the fifth the group has closed in the last few years, so it will only have two left next year.
FrieslandCampina also dropped the partnership with Unilever for the manufacturing of the Napoca ice cream. The factory in Taga, which ceased operations in 2013 reopened for business this year but production will be handled by Fabrica de Branzeturi Transilvania in partnership with the owner of the facility.
Danone Romania in the red
The year 2013 was the first year of losses in six years for market leader Danone Romania. It posted RON5 million loss in 2013, and did not do any better in the first half of 2014, either, when the net loss stood at RON13.7 million, six times higher than the year-earlier period. Sales were down, too, by almost 2% in the first half, reaching RON234.4 million.
Napolact dairy brand takes on retail
Napolact, one of the oldest dairy brands in Romania, which has been part of the brand portfolio of FrieslandCampina for the past decade, has grown its retail chain to seven stores in Cluj County. The last store opened takes up 100 square meters and includes a coffee shop.
Napolact has five stores in Cluj-Napoca, and two more in Dej and Huedin, according to the latest data available. Napolact is the most important brand in FrieslandCampina’s Romanian portfolio and has the highest contribution to its sales. According to the company’s estimates, Napolact accounts for more than 60% of FrieslandCampina’s business in 2014.
Napolact is one of the few local producers, which managed to open stores that stock only its own products.
Turkey’s Sutas postpones opening Tnuva plant for 2015
Turkish dairy producer Sutas, which bought the former Tnuva plant in Popesti-Leordeni, 9 kilometers away from Bucharest, in 2013, this year decided to postpone the reopening of the production facility for 2015.
It had initially planned to open it in the first half. Sutas registered a local company, Balkan Dairy, in the second half of 2013 and came up with the first EUR10 million for its capital in form of a loan taken out from the European Bank for Reconstruction and Development. It has not done anything since then, so the former Tnuva plant is still closed.
(English version by Loredana Fratila-Cristescu)