Agricola Bacau group, one of Romania's largest poultry producers, has budgeted 10% higher turnover for 2008, up to 120m euros. The target depends, however, on the company's decision on a possible production capacity cutback.
"Grain prices have tripled in the past year, which is putting a lot of pressure on costs. Unless moves are made to change this situation, we may have to cut down production next year," stated Gheorghe Antochi, chairman of the group.
According to Antochi, the rising raw material prices will push up prices for finite products, but he chose not to provide further information on the decisions that a production cutback will trigger.
However, from mid-December, the company halted poultry slaughter and raising, laying off around 700 employees.
The Bacau-based producer is running a 12.5m-euro investment programme, with a Sapard 2.8m-euro co-financing in the 2007-2008 period. The funds are largely aimed at the modernisation of production facilities.
"Originally, the total amount of investments scheduled for this year and for 2008 stood at 12.5m euros, but because of rising prices for equipment and the higher environment protection investments, total investments will revolve around 17-18m euros," said Antochi.
Agricola Bacau has this year invested 1.6m euros in a new incubation station and 4.5m euros to retool and raise the production capacity of the former Carbac department, which was turned into a plant focusing on dry-cured salami, with a production capacity of 1,200 tonnes of finite products.
For 2008, the company plans to finalise an 8.5m-euro investment aimed at the modernisation of the slaughterhouse in Bacau, and a 2m-euro investment for the construction of a pig farm to become operational in 2009.
"We are currently in talks with a Dutch company for the construction of a unit turning animal residue into electrical and thermal power, which means investments of around 1.2m euros.
We hope these talks will have a concrete outcome next year," stated Antochi. He would not disclose the name of the future partner company.
Agricola Bacau officials estimate the company will generate turnover worth around 350m RON (some 110m euros) this year, of which 260m RON (75m euros) account for the financial results of Agricola International, with ended 2006 with 70m-euro turnover and net income worth 1m euros.
The company holds a 16% share of the poultry production registered by the specialised units of Romania, and a share of almost 10% of the overall market, according to its own information.
Its competitors are Transavia Alba Iulia, Agisol International and Avicola Calarasi.
Agricola Bacau
Has budgeted 10% higher turnover for 2008, up to 120m euros, depending, however, on the company's decision on a possible production capacity cutback
Total investments aimed at production facility modernisation will revolve around 17-18m euros
For 2008, the company plans to finalise an 8.5m-euro investment aimed at the modernisation of the slaughterhouse of Bacau, and a 2m-euro investment for the construction of a pig farm to become operational in 2009
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