“I think foreign groups are looking at Romania more carefully mainly because of the consolidation of emerging markets. Romania will be a very interesting market for acquisitions in one or two years,” said Radu Timis, owner of the Cris-Tim group, with revenue of more than 540 million lei (EUR120 million).
“Companies are now selling for a price and prices will change in two years. There is opportunity on the market at the moment. Second of all, the meat industry is consolidating. There will be three major players, several regional ones and several small ones in the future. It seems the meat market will follow in the footsteps of the dairy market.”
Timis says his group has received several offers over the years but he will pass on the business to his children.
“Meat is one of the few sectors of the local food industry still dominated by local entrepreneurs in terms of number of companies and revenue.”
Market leader, however, is the Smithfield group, held by China-based WH Group. The same group has recently bought meat processor Elit Cugir from entrepreneur Dorin Mateiu. Smithfield also bought another company of Mateiu, Vericom 2001. The revenue of the two companies stands at almost RON400 million.
Several weeks before this deal, the El Solh family announced the sale of its remaining 51% in meat processor Caroli Foods Group (RON430 million revenue) to Mexico’s Sigma Alimentos, leaving a business it had started more than two decades ago.
The dairy industry, a EUR1 billion market, is already dominated by multinationals, which gradually bought all the major players, the last of which being Albalact. The Romanian-held companies left are small and they either make private label dairy products or decided to focus on regional distribution to be able to compete.
The meat market, estimated at RON3.7 billion (including the processed meat segment) is dominated by entrepreneurial companies that developed relying on their own store chains, on added value products and entered the major retail chains or on exports.
“I am honestly sorry (for the sale of Romanian businesses i.e.) because the meat processing industry was about the last stand of the food industry not to give in to the lure of multinationals. It’s not easy for Cris-Tim either, knowing you have world’s biggest meat business – WH Group on your market, as well as Sigma Alimentos, the largest meat processing business in Europe and one of the largest in the world. This also motivates us to improve. If I sell, too, what will become of the Romanian food industry?”
Radu Timis, Ioan Popa (Transavia), Vasile Lucut (Unicarm), Bogdan Stanca (Aaylex Group), Craciunescu family (Diana SRL), Naghi family (Aldis), the Romanian group of investors behind Agricola Bacau are the top ten entrepreneurs who have yet to give in to the multinational temptation.
Most of them have received bids from major players, ZF has found. For instance, Profi and Mega Image are courting Vasile Lucut’s Unicarm’s 100-store chain.
(English version by Loredana Fratila-Cristescu)