SABMiller, whose annual turnover tops $30 billion, owns Ursus Breweries on the local market, with three beer plants in Brasov, Buzau and Timisoara and a smaller facility in Cluj.
“We are now discussing the possibility of boosting our production capacity in Romania. The trend is towards developing, not towards rationing,” Graham MacKay, executive chairman of SABMiller, told Ziarul Financiar in an interview.
This is the first positive signal given by Ursus, the largest beer producer on the Romanian market, with a turnover of over EUR260 million. In 2010, a year of decline on the beer market, Ursus decided to close down its Cluj plant after in the previous year it had shut down its Azuga plant.
Present in Romania for a regional group meeting, Graham MacKay, 63, talked optimistically about the evolution of Ursus and about Romania’s performance in central and Eastern Europe.
Ursus, which has in its portfolio brands such as Timisoreana, Ciucas and Azuga, last year had a turnover of 1.1 billion lei (EUR261 million) and a loss of RON57.66 million (EUR13.6 million), being the largest beer producer on the Romanian market according to the 2011 turnover.
MacKay says things are better now compared with previous years, that the trend is upwards, but that everyone would like a faster rebound.
“We are discussing the possibility of boosting our production capacity in Romania,” he said.
When he talks about “rationing,” the head of SABMiller refers to the fact that the both Ursus and other brewers have closed down plants in the past few years.
“Things are better now then in previous years. (…) This part of the world progressed faster than expected,” said Graham MacKay, mentioning that this growth was based on credit.
“I wouldn’t say [Romania] is risky compared with other places where we operate in the world, Central and Eastern Europe has been the most affected region in the world and it is not very attractive right now, but it is rebounding. (…) Under the circumstances, Romania remains attractive,” the head of SABMiller also says.
He adds that businesses need legislation and fiscal stability.
“Our analysis doesn’t show Romania is difficult from these perspectives, but it is something we are looking at.”
About the Romanian beer market, he says it is standard for Europe, and has a well-developed portfolio.
In the group’s fiscal first quarter (ended on June 30), SABMiller recorded a 15% increase in volumes sold on the Romanian market, and according to Graham MacKay this was the “most solid growth in Europe.”
The return to growth of Ursus comes after an extended period of decline and at a time when the entire beer market returned to growth, posting a rise of almost 9% between April and June, according to ZF calculations based on data of the National Statistics Institute.
Romania accounts for 2%-3% of SABMiller’s total sales, and for more than 10% of sales in Europe.
He says an improvement in economic conditions is noticeable in Romania, a rise in volumes sold and a trend towards premium and towards discount beer.
(English version by Daniela Stoican)