December 16, 2008


Romania's Albalact sets eye on local dairy market

Romania's dairy company, Albalact, is looking to complete its consolidation process while having a less-than-positive outlook for 2009.


Albalact reported 20-percent growth in turnover in the first three quarters of 2008, to 134.08 million Romanian lei. Overall earnings of the company also grew 22 percent to RON146.19 million this year.


The company had also completed major phases for the consolidation process that required two important investments - opening a new production facility at Oiejdea and sealing the acquisition of 77 percent shares of local firm Raraul Campulung Moldovenesc to enter the cheese segment, according to Albalact managing director Traian Simion.


Although the local dairy industry is not yet consolidated, all dairy segments followed upward trends, said Simion.


The Romanian dairy industry has not been affected by the economic crisis yet, but the situation is likely to change next year.


Simion said the market evolution next year will be slower due to the economic crisis, and the growth margin will be lower while consumption will focus around basic dairy products.


Simion said milk is the second staple food for Romanians, and that consumers will choose cheaper products that will lead to a slower growth pace of the industry in general and to a lower profit margin.


Simion said although the company's strategy was adjusted to market conditions, it was hoping not to be affected by the current financial crisis.

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