Constantin Boromiz, the entrepreneur behind the EUR100 million group, is at a Moscow fair, taking the first steps towards signing contracts.
“I’ve been here for two days, meetings are being scheduled, contracts are being concluded, information is being exchanged about clients and prices. We have not made deliveries to this market yet, but are examining it, looking for growth outlets through exports,” Boromiz says.
Exports of bakery and pastry products amounted to EUR8-10 million for the Romanian economy last year, according to ZF estimates.
It is important for a Romanian producer to enter the Russian market because the volume of the entire bakery industry in Russia is 7 million tons, according to data in a report of Intesco Research Group. This compares with a bakery production of 1.8 million tons in Romania, four times less than in Russia, according to data of market research company Euromonitor.
The exports of the Boromir group are not significant enough yet to be considered a true growth driver for the company.
The milling and bakery industry, where the black market is around 70%, has been doing business since two weeks ago with its VAT cut to 9% from 24%.
Producers have been asking the Government to take this measure for two years amid pressure from tax evasion and the lower taxation is seen as a weapon against those who sell their production without issuing an invoice.
However, no producer has so far publicly said that the VAT cut will be felt on the market or that there has been a visible decline in non-loyal competition. “I have not had time so far to analyze the concrete impact of the measure,” says Constantin Boromiz.
(English version by Daniela Stoican)