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Romania Food and Drink Report Q1 2008Published by: Business Monitor International Published: Feb. 4, 2008 - 66 Pages Table of Contents
AbstractThe Romanian beer market has been attracting strong interest from international investors in recentmonths thanks to booming growth, which has led a number of the industry’s key players to invest inincreasing their production capacity. In September Anglo-South African brewer SABMiller announcedits plans to invest EUR50mn (US$69mn) in expanding production at its Timisoara brewery in Romania.The company’s Ursus Breweries subsidiary will use the funds for modernising its facility, and toincrease capacity by around 200%; the weekly production capacity at the Timisoara brewery is currentlyaround 21,000 hectolitres. Ursus will build a new store warehouse and also invest in a new brew house,and fermentation, filtration and storage tanks. Also in September, Belgian brewer InBev announced thatits Romanian sales were up by 27% in H107. InBev is one of the top players in the Romanian beermarket, with an estimated share of 23%. This impressive jump in sales was the biggest registered in theCEE, followed by Ukraine and Russia.Meanwhile, rival beer company Heineken announced that its Romanian unit reported a strong rise insales for the first half of 2007, on the back of the expansion of its product portfolio. Gross turnover in thesix-month period grew by 36% year-on-year to reach EUR120.2mn (US$167.8mn), and volume saleswere also up by 20% to 2.3mn hl. Sales of the company’s flagship mainstream brands rose by 40% involume terms, while market share rose a marginal 0.6% to 26.5%. Heineken also announced plannedinvestments to expand its annual production, with EUR40mn (US$58.7mn) earmarked to raise productioncapacity from 5.2mn hl to 6mn hl. Finally, in early November United Romanian Breweries Bereprod,bottler of Carlsberg in Romania, announced that it will invest between EUR60-90mn to double itsproduction capacity to 4mn hl annually, which would represent just under one quarter if the total capacityof the Romanian beer market. The decision follows strong growth in the first nine months of 2007,boosted in part by high temperatures. Turning to the agricultural sector, the picture is not as bright, as recent poor performance in this sector hasbeen dragging on GDP growth. Not only is agriculture an important contributor to economic growth, butits effects are felt on consumer spending, since much of the population is directly involved in foodproduction or exposed to the sector in some way. Some 10% of the Romanian economy is agrarian, witharound one in five Romanians owning a small farm and as many as one in three involved in subsistencefarming. Although high global wheat prices are currently helpful to the country’s farmers - as wheat andmaize form a high proportion of arable output - heavy droughts have decimated crops so far this year, andthe country looks set to become a net wheat importer in 2008. Therefore, while some categories withinthe food and drink industry are booming, others will continue to struggle in coming years. Get Full Details About This Report >> |
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