Covalact, a major player on the dairy product market, ended last year with lower turnover compared with the 2007 results as the company underwent a reorganisation process after its majority stake was taken over by SigmaBleyzer US investment fund.
"The turnover we ended 2008 with was between 8 and 10% lower than the 2007 results as we cut production of powder milk and butter by reducing raw material purchases by as much as 12%, while income was as scheduled. This year, we want to finalise the investments we started in 2008 and we expect to see turnover rise again," stated Ioan Balan, general manager of Covalact.
Judging from the decline pace disclosed by Ioan Balan, the producer ended last year with turnover worth around 64 million RON (approximately 18 million euros), considering that the company in 2007 generated turnover standing at 71 million RON (21.3 million euros), up by 23.1% in RON and 30.6% in euros from the previous year, according to the Finance Ministry. At the same time, income climbed from 2.5 million RON (0.7 million euros) in 2006 to 3 million RON (0.9 million euros).
The results are below the company's initial projections of a turnover growth by 10-15% in 2008 year-on-year, to approximately 22 million euros, after in the first half of last year turnover had advanced by around 15% against the similar period of 2007.
Balan added this week that the representatives of Primulact and Lactate Harghita dairy producers, which SigmaBleyzer took over last year through Covalact, would start discussing on the two companies' merger. However, he did not say when the process was due to be finalised.
The American investment fund intends to specialise the two companies of Harghita county on the segment of cheese and consumer milk production, planning to double both the turnover and production capacity of the plants owned in Miercurea Ciuc and Cristuru Secuiesc by 2010.
The main rivals on Covalact are Friesland, Danone and Albalact, and also Tnuva, Lactalis or Müller, firms that have recently entered the Romanian dairy product market, estimated to be worth 1.3 billion euros.
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