“It is hard to say whether there will be any acquisitions in the dairy industry. Many producers have enough potential to grow on their own,” said Jan Willem Kivits, managing director of FrieslandCampina Romania, the third largest player on Romania’s dairy market.
Friesland cemented its local position through an acquisition policy completed in 2014 with the “pearl” of dairy of Ardeal area, Napolact brand, while French group Lactalis entered Romania by taking over LaDorna in 2008. Since then, the industry has witnessed the bankruptcy of Tnuva, the insolvency of Prodlacta Brasov (now the company is no longer insolvent), but also the investment from scratch of Greek Olympus.
No further major deal has been signed on the market worth almost EUR1 billion, where the biggest players are Danone Romania, Albalact and FrieslandCampina Romania.
The battle between the top three players has tightened in recent years on a market where there are several large players and a lot of companies with revenue of several million euros. The market holds around 10 companies with revenue of above RON100 million, according to ZF calculations based on Trade Registry data.
“The dairy market is fragmented, there are few large players and many small companies. We do not see market shares of 30% or more. Our market share ranges between 10 and 12%,” said Kivits, who has worked with the Dutch group for around 18 years.
In 2014, FrieslandCampina Romania saw revenue go up by 7%, to 387 million lei (EUR87 million), according to ZF calculations based on company and Finance Ministry data. Napolact was the growth driver of the Dutch group’s local business in 2014 as well.
Overall, we had growth of around 10% by volume and looking at Napolact, the brand advanced by as much as 20%, added Kivits, who mentions he targets similar growth for this year.
The manager says the company has focused in recent years on Napolact brand, one of the oldest in the local dairy industry, for which he plans to boost the product portfolio. According to FrieslandCampina official, the overall growth of Napolact brand against three years ago reached 40-50%.
In recent years, the Dutch-held company reshuffled its Romanian operations, closing down five plants. At present, the company operates two plants in Baciu, Cluj county and Targu-Mures.
(English version by Catalina Apostoiu)