The sales of the company that makes the LaDorna and President brands returned to growth at a very good time for the food industry, which saw a VAT cut from 24% to 9%. The VAT cut was quick to show in consumer spending, which has been rising at a rate of as much as 20% a month at times. As far as food industry companies are concerned, the results will more clearly show in the second half, since the VAT cut that spurred the growth happened in the last month of the first.
Despite the uptick in Dorna Lactate sales, its owner seems unable to return it to profit. Financial results show a RON3.2 million net loss in the first half of 2015, compared with RON3.6 million in the year-earlier period. Since its takeover by Lactalis in 2008, Dorna Lactate has had six years of losses and only one year of profit, even though the French group took steps to streamline the operations by closing plants and milk collection centers and laying off people. Dorna Lactate had 100 fewer employees in the first half of 2015 compared with the first half of 2011, according to publicly available data.
Rival Albalact, the market leader by 2014 results, posted RON237 million net revenue in the first half, an increase of 10% on the year-ago period. Olympus was the dairy business with the highest growth in the first half, 11%, though. Danone, the largest yogurt producer in the country, saw a slight decline in revenue by 1.6% to RON230 million, while Hochland recorded a 4% decline.
These dairy companies are seeing serious competition from private labels such as Pilos (Lidl) and K-Classic (Kaufland). Albalact also notes in its first half report the decline in sales due to imports of dairy products from the EU because of the sanctions imposed on Russia as one of the uncertainties on the market.
Lactalis also owns Dorna SA, Lactalis Romania (sales) and Parmalat Romania, one of the largest companies on the local non-carbonated beverage market. (EUR1=RON4.4442)
(English version by Loredana Fratila-Cristescu)