Vel Pitar, one of the main players in the Romanian milling and bakery industry, plans to expand its operations through acquisitions on Romania's neighbouring markets.
"Over the next two years we plan to boost our presence in the Balkan region through acquisitions of bakeries with production capacities of 50-60 tonnes per day. The Ukrainian, Moldovan, Serbian and Bulgarian markets are very interesting for us because they have the same features the Romanian market had ten years ago. We have the money and potential to take this step," said Dan Trifu, deputy chairman of Vel Pitar's budget-finance department.
"We have researched a relatively small company in Serbia, but the price was several times higher than normal," said Siminel Andrei, manager of Broadhurst investment fund, the majority stakeholder in Vel Pitar.
Vel Pitar is the first milling and bakery player to have announced an interest in expanding to the Balkans. In recent years Vel Pitar has been one of the top players in terms of acquisitions on the Romanian market.
"In parallel with regional expansion, we will continue with our acquisition policy on the Romanian market," added Trifu.
Several big players dominate the milling and bakery market. However at a local level it is highly fragmented. The wheat crisis of 2003 compounded the problems faced by small and middle-sized players, with many forced either to close down or accept buyouts by larger players.
Sorin Minea, chairman of Romalimenta, an organisation that brings together a number of players in the food industry, believes the expansion plans announced by Vel Pitar are unlikely to succeed.
"It may prove successful at a lower level, but I do not believe major investments can be made on smaller markets like the Republic of Moldova. There are chances of success on the biscuits market, for instance, where there are no powerful multinationals," said Minea.
Over the last two years, a number of Romanian companies have considered expanding onto neighbouring markets, which are less developed and where the top international companies are not yet present. Rompetrol has already entered the Bulgarian and Albanian markets and is looking for opportunities in the former Yugoslavia. Mobexpert has approached Bulgaria and is also about to enter the Serbian market.
The last two years saw Vel Pitar buy Libertatea Panificatie Bucuresti, Panificatie Postavarul Brasov, Panem Giurgiu, Bals bakery, Gorjpan Targu Jiu, Pangran Iasi and Spicul Arges Pitesti. stelian.negrea@zf.ro
Pentru alte știri, analize, articole și informații din business în timp real urmărește Ziarul Financiar pe WhatsApp Channels
