The Ramnicu Valcea-based Boromir group, one of the biggest Romanian bakeries, paid 1.2m euros for the Morarit Panificatie Ialomita company. In the wake of the deal, Boromir shareholders say the plant needs at least 3 million euros to bring it into line with European norms.
"We participated in a tender against Vel Pitar and we managed to buy the company for 4.4 million RON (1.2 million euros). The tender started at 3 million RON," stated Dinel Boromiz, a shareholder in the group.
Boromiz explained that this is a strategic acquisition for the group. "The plant is located 100 km away from Buzau, a city where the group owns other production centres. Moreover, it is situated in the heart of one of the most important grain regions in the country and allows for a better coordination of activities," added Boromiz.
In April 2005, Ialomita Tribunal launched receivership and bankruptcy procedures in the case of Morarit Panificatie Ialomita and designated PricewaterhouseCoopers Management Consultants as the legal administrator.
Morarit Panificatie was one of the biggest plants in the south of the country, with their production centres covering a total area of more than 20,000 square metres. Until April 2005, the company''s shares were traded on the RASDAQ, whose website states that in 2004 Morarit Panificatie registered turnover worth 5 billion ROL (135,000 euros) and losses standing at 4.6 billion ROL (120,000 euros).
According to Boromir representatives, the Ialomita county plant will reach full capacity production in 2007, while retooling and adjustment to European standards will demand investments of more than 3m euros. The group ended last year with turnover of 78 million euros, 8% higher than in 2004. As early as last year, Boromir shareholders announced moderate turnover growth, after the leap seen in 2004, when the company''s business surged by almost 25 million euros.
The development of the group was based on the expansion of some production capacities, on the diversification of the product range and the acquisition of the pasta manufacturer ProPasta Iasi.
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