Since 2005, when Vrancart floated on the bourse, until 2013, the company saw its revenue go up 3.6 times, from RON51 million to RON184 million, owing to output investments partially funded with EU money.
The company has three distinct business lines, with their own budgets, namely production of paper for corrugated cardboard, corrugated cardboard production and toilet paper production. Production of paper for corrugated cardboard is the rising activity segment. Around 60% of production is used by the company for its own line of corrugated cardboard and the rest is sold to other companies, mainly abroad.
The corrugated cardboard market is split between 10 domestic players and Vrancart in 2013 ranked third, with 14% of the market.
“The corrugated cardboard market is a regional market owing to high long-haul transport costs. It is a highly competitive market and in Romania consumers focus on low-price, medium-quality products,” reads Vrancart’s report.
“The overall production capacity of the 12 plants reporting to the Romanian association of corrugated cardboard makers (ARFCO) stands at 723,000 tons annually. 2013 consumption amounted to 271,000 tons, namely 37% of output. The figures reflect the higher offer against demand, leading to major pluses for buyers”.
The only positive mentioned in the report is the 13% consumption increase of 2013.
On the toilet paper market, Vrancart filled the third position in 2013, with a 16% share. The company’s market share declined in the past two years as its products address the medium-quality market segment. Vrancart is also threatened as new production capacities will be installed at Petrocart Piatra Neamt and Pehart Tec Petresti.
Despite the constantly rising revenue, Vrancart’s profit margins have kept thinning in recent years and the company ended 2013 in the red for the first time since listing. The RON6.82 million negative figure came, however, on asset reassessment which triggered expenses of RON13.8 million.
For 2014, Vrancart has budgeted gross income of RON8.1 million.
At the end of last year, SIF Banat-Crisana changed Vrancart’s management, bringing Ionel Ciucioi, who worked for nine years in the audit field, on the position of general manager.
(English version by Catalina Apostoiu)