Only three major Romanian manufacturers are left on the Romanian ice cream market put at EUR200 million a year, along with several hundred small businesses making ice cream. This used to be one of the few sectors of the local economy where local entrepreneurs managed to stave off multinationals.
The latest deal announced – the takeover of Betty Ice by Unilever from owner Vasile Armenean, along with the acquisition of the majority stake in Alpin 57 Lux by Latvia’s Food Union group from the Istrate family put almost half of the value of local ice cream production in the hands of two multinationals.
Betty Ice, which is now waiting for the Competition Council to green light the deal, is the largest Romanian player on the local ice cream market, whose production stands at more than EUR100 million a year, according to ZF’s calculations based on Trade Registry data. The analysis only includes those companies operating under NACE 1052, `Manufacture of ice cream’. Five manufacturers built by Romanian entrepreneurs – Betty Ice, Top Gel, Alpin 57 Lux, Kubo Ice Cream and Ice Dyp Balas, account for 75% of the EUR100 million.
Top Gel, Kubo Ice Cream and Ice Dyp Balas are among the few Romanian players that could be put on the list of acquisitions of multinational companies. Top Gel, of Petre Popa, has been courted by Unilever, Food Union, and by private equity fund Abris Capital Partners, ZF has found.
Asked by ZF, Top Gel denied a potential sale of the company at the time when Betty Ice’s sale negotiations were in full swing. Top Gel is a company established in 1994 by Petre Popa and posted 87 million lei (EUR19 million) revenue in 2016, when it had almost 500 employees. The company is among the top three local ice cream manufacturers.
A new deal is expected on the local ice cream market, as the entrepreneurs are willing to sell to take advantage of a good moment to do so, while Romania is becoming increasingly attractive to foreign investors.
Moreover, companies like Unilever and Nestle, as well as Romanian-owned Macromex (La Strada, Corso) do not have their own production facilities in the country. Unilever and Food Union can also be expected to seek consolidation of their local operations after having signed the first deals and to continue to look for acquisition targets. However, there are few manufacturers left on the ice cream market that can be attractive to multinationals.
One of them is Ice Dyp Balas in Timis County, which posted RON36 million revenue in 2016 and is held by the Balas family. The company has as many employees as 600 during the summer, according to the corporate website.
On the other hand, Kubo Ice Cream, whose owners wanted to sell two years ago, went insolvent. The company posted RON18 million revenue in 2016, down 34% on the previous year, according to Finance Ministry data.
The first deal on this market happened in 2016, when Food Union bought the majority stake in Alpin 57 Lux.
The ice cream market is heavily fragmented, with the top six players (manufacturers and importers) accounting for some 60% of the sales put at EUR200 million a year, ZF has found. The top three account for 40%. The competition is between several local players and two international giants, Unilever and Nestle. The Romanian ice cream market is also underdeveloped as 90% of consumption happens during the summer. (EUR1=RON4.6551)
(English version by Loredana Fratila-Cristescu)