Prio Foods, part of Portuguese group Martifer, opened the plant in 2011 following a EUR93 million investment. Bunge has its own plant in Buzau (SE Romania), which it bought from Agricover in 2007. With this deal, Bunge reaffirms interest in the local market, consolidating its vegetable oil market leader position.
“The due diligence has already been conducted. Bunge is buying 55% of Prio’s shares and the deal will be completed in one month at most,” a source close to the talks said.
Prio Foods officials would not comment on the information but did not deny it, either. On the other hand, Bunge Romania officials did not comment in any way.
If the Bunge-Prio deal comes through, it will be the first major transaction in the local vegetable oil industry in two years, after Swiss Alimenta sold Expur to France’s Sofiproteol. In 2010, the French giant with more than 6,000 employees and EUR5.5 billion sales bought Expur plants in Urziceni and Slobozia (southern Romania) for EUR60 million to EUR80 million. This will also be Bunge’s first move after five years.
The Prio-Bunge talks are surprising, considering it has been less than one year since the Portuguese-held company entered the local vegetable oil market via a EUR93 million investment, one of the biggest greenfield projects inaugurated by a company in Romania last year.
The Portuguese company has been operating in this country since 2005 but had focused on biodiesel production in a plant in Lehliu Gara until July 2011. Prio processes sunflower seeds and rape seeds for industrial and consumption purposes. Prio’s oil factory has a capacity of 316,000 tons of oil and 340,000 tons of vegetable oil extraction residues per year. Last year the company sold 60,000 of biofuel. These are the only facts known about the company’s operations in 2011.
The deal will consolidate US-held Bunge’s position in eastern Romania. A presence in the eastern part of the country is strategic for producers of vegetable oil and biodiesel because of the proximity of the areas where Romanian farmers grow the necessary raw material and the proximity of the Black Sea for exports.
Bunge posted EUR373 million revenue in Romania in 2010.
On a vegetable oil market estimated at EUR350 milion – EUR400 million, Bunge and Prio Foods compete with Cargill and Expur, as well as with businesses built by Romanian entrepreneurs, such as Prutul Galati (Marian Andreev), Ulerom (Adrian Porumboiu) and Ardealul Carei (several individual owners).
(English version by Loredana Fratila-Cristescu)