“Local production of tissue paper increased at a higher rate than the European average last year, as consolidation in modern retail continued. The percentage of private label products of the retail chains increased, as well, which drove producers to make sizeable efforts to keep and boost the sales of their own brands,” said Ioan Tecar, the owner of the MG-Tec group, which also includes tissue producer Pehart Tec.
On the other hand, the rise in logistics costs led to a decline in imports in 2013, replaced by domestic producers’ brands and private label products, the Romanian entrepreneur said.
Tecar has been negotiating the sale of the Pehart Tec paper plant to Sweden’s SCA, which owns the Zewa toilet paper and household towel brand, since last year. The deal hit a snag, however, in that the Sebes City Hall opposes the sale of a 3.6 hectare plot of land near the Pehart Tec plant, Tecar said.
SCA is willing to buy Pehart Tec only if the plant can be extended and a logistics facility added to it on the said 3.6 hectare plot, which the Sebes City Hall owns.
Tecar says the Swedish company plans to invest EUR120 million to double Pehart Tec plant’s production capacity from 55,000 tons to 110,000 tons of tissue a year.
“The project is still stuck at the City Hall and I don’t know now if it will ever materialize. I am disappointed with how things turned out, considering the deal was supposed to be completed last year,” Ioan Tecar said.
The problem with the land came up when several city councilors opposed the sale of the 3.6 hectares. In the meantime they changed their minds and green-lighted the project, but the City Hall kept postponing the auction to sell it. The land should sell for more than EUR700,000, according to Tecar.
SCA did not comment on the information.
“The project for the land in question did not get the necessary number of votes to move to the public auction phase in order to sell it,” said Sebes mayor Alexandru Danila. “There is a decision to put it up for auction now and we contacted Pehart Tec, but have not received an answer yet, since the company is still working on its budget for this year. The moment we get an answer from Pehart Tec, we’ll put the project back on our agenda.”
Pehart Tec’s products go to the major retail chains in Romania like Lidl, Auchan, Profi, Metro and Cora or are sold via wholesalers. Exports reach Greece, Hungary, Bulgaria, Germany and Serbia. (EUR1=RON4.5239)
(English version by Loredana Fratila-Cristescu)