Friesland, leader in profit on the milky market in 2007

On a crowded market, most of the milky producers obtained last year profits in decrease in comparison with the previous year. However, for the future the milky market seems promising, so new competitors turn up in Romania.

On the milky market, one of the most competitive markets from the Romanian economy, big profits are hardly being obtained, once with the increase of the producers’ number. Almost every year, a resonant name in domain makes his entry in Romania, hoping that the milky segment will increase and they will get closer to the already existent level in most of the countries from the European Union. As, at least for the moment, the consumption doesn’t record a spectacular growth, the producers are forced to fight for winning and keeping the market shares.

Friesland –absolute champion

According to the financial data recently published by the Ministry of Economy and Finance, the best results for 2007 were recorded beyond doubt by Friesland Foods Romania, producer of the brands Milli, Napoca, Napolact and Oke!. Among those three constituent companies – Friesland Romania, Napolact and Industrializarea Laptelui Targu-Mures - the group recorded last year a turnover of over 600 million lei and a net profit over 111 million lei.

Friesland Romania SA Satu Mare recorded in 2007 a net profit of 87,5 million lei, and a turnover of 272,6 million, in terms in which in 2006 the company recorded only 460.000 lei net profit. Napolact Cluj-Napoca and Industrializarea laptelui Tg. Mures reported profits of 20,5 million, respective 3,35 million lei, and turnovers of 193 million and 143 million lei.

Friesland Foods Romania is the subsidiary of the Dutch group Friesland Foods – one of the top10 world’s milky companies, having subsidiaries in Europe, Asia, Africa and South America. At national level the company has 16.400 employees and entered on the Romanian market at the beginning of 2002, by purchasing the Dutch company Nutricia Dairy & Drinks, company that owned at that moment the companies Somesana from Satu-Mare, Belcar from Timisoara and the majority package to S.C.I.L. Tirgu-Mures. Starting with 2004, Friesland Foods Romania is majority shareholder at Napolact Cluj-Napoca.

The company Danone reported in the balance sheet for last year a turnover of 369 million lei, in increase with 62 million against 2006, and a profit of 31,7 million, a profit that dropped with almost seven million lei against the previous year. In 2007, Danone had to face the scandal related to the carcinogenic guar gum. Although it wasn’t present in the products from Romania, it has affected the company. The group Danone is present in 150 countries and is world leader on the market for fresh milky products, having activities in Romania since 1996.

Hochland Romania can boost with a profit of 8 million lei in 2007, and a turnover of 170,6 million. In 2006 the company reported businesses amounted to 158 million lei and a net profit of 7,5 million lei. The company is part of the German group Hochland, one of the biggest producers and processors of different sort of cheese from Europe.

Albalact –a net profit reduced to a half

The company Albalact, owner, among others, of the brands Fulga and Zuzu, recorded on last year a growth with over 50% of the turnover, from 102 million lei in 2006, to 154 million lei, but a decrease of the profit from 6,02 million lei, to 3,2 million lei.

Set up in 1971, under the name Company for Mill Processing Alba, Albalact was privatized in 1999, the main shareholders being Petru Ciurtin and Raul Ciurtin.

Covalact SA Covasna obtained in 2007 a profit of 3,04 million lei, for a turnover of 71 million, in increase with about half of million lei, in comparison with 2006.

Covalact was set up in 1969 and privatized in 1994 through the MEBO method. A package of 70% from the company’s stocks was bought last year by the American investment fund SigmaBleyzer, as a result of a transaction estimated up to seven million euro.

In loss

Dorna Lactate, company within the group Dorna, recorded on last year a loss of 6,37 million lei, for a turnover of 107,5 million. The other company of the group, Dorna SA, obtained in 2007 a profit of 104.000 lei, a quarter from the one recorded in 2006.

The group La Dorna was set up in 1998 by the businessman Jean Valvis, Swiss enterpriser with origins in Greece. In April 2008, Jean Valvis sold the business with milky products towards the giant Lactalis, from France.

The transaction was estimated to at least 70 million de euro. Lactalis is the world’s second producer of milky products and the first in Europe, with annually businesses amounted to 10 billion euro.

Another domestic producer that recorded losses last year was Brailact – owner of the brand Brenac. So, for a turnover of 31,7 million lei, Brailact recorded a loss of almost five million lei.

Brailact SA was set up in 1955, the main shareholder being the company Tina Intercom, owned by two Greek investors that took over the company in 2004.

The small producers keep the pace

The small producers handled well in 2007 with the big companies in domain. So, Lactate Harghita reported last year a net profit of 311.823 de lei, for businesses of about 50 million lei. Prodlacta SA obtained a net profit of 380.866 lei, for a turnover of 53 million lei, while Tyrom Covasna realized a net profit of 289.639 lei and businesses of 37 million lei.

Tnuva – enters in force

The Israeli company Tnuva entered in force on the market last year, although the company has taken bearings in Romania since 2003. Tnuva Romania, in partnership with the the European Bank for Reconstruction and Development (EBRD), invested 55 million euro in building a milky factory and a farm for growing caws in Popesti-Leordeni, near Bucharest. The products Tnuva entered on the Romanian market in 2007. The factory has a processing capacity of 60 million liters milk yearly. The company Tnuva Romania Dairies, producer of gamma Tnuva, recorded last year losses of 5,65 million lei, for a turnover of 18 million lei, but entered soon in the top of the biggest players of the milky products from Romania. Tnuva is the biggest milky producer from Israeli, and the products Yoplait are ranked among the first positions at fresh milky products in Europe.

The milky market, in increase

Last year, the milky market was estimated to about one billion euro, however it is estimated an increase of 20-25% yearly.

The milky products consumption in Romania reached last year to 6 kilograms per inhabitant; but it is situated much under the average of 20 kilograms, recorded
in the Western Europe.

A new resonant name on the local market

Last month, the German group Muller, the second milky producer company from Europe, has announced its entry on the Romanian market. For starter, the company will bring products processed in Germany, but also takes into account the alternative of building a factory of milky products in our country or to take over an already existent company.