Cargill Oils, producer of Untdelemn de la Bunica and Olpo vegetable oil brands, has recently increased its share capital by some 20 million RON to cover market growth.
"We've decided to increase the company's capital to finance the investments we want to operate in the future. Our sales have increased quite a lot compared with two years ago and we now need more money to further develop our business," stated Jose Fauda, the company's financial officer.
The representative of Cargill Oils, the domestic arm of Cargill US giant, one of the biggest private companies, estimates its sales surged by 40% in terms of volume in 2006, as prices for vegetable oil brands on the entire market dropped by 5% on average.
Cargill Oils last year invested 2.5 million dollars (1.8 million euros) in employee safety and 6.5 million dollars (4.8 million euros) in acquisitions of new technologies, an investment the company intends to continue this year.
"In 2007, we will invest between 5 and 6 million dollars in technology, to acquire new bottling lines for 2 and 5-litre oil bottles and to improve the bottling line for one litre bottles," explained Fauda.
Two years ago, Cargill bought Olpo vegetable oil producer, whose production centre is located in Podari, Olt county. According to the company's representative, at the moment the acquisition was sealed, one of the objectives was the launch of new products.
"We launched a special oil for cooking and we entered the market of olive oil last year. In terms of product distribution, we are covering almost the entire country," stated Fauda.
He said the company's oils division would boost marketing investments to some 1 million euros.
According to Fauda, the products ready for launch also include brands specially meant to complement the HoReCa (hotel-restaurant-catering) segment ranges.
The producer plans to operate some cost savings, by closing down around 10 silos of the 43 it owns in Galati, Ialomita, Calarasi, Giurgiu, Teleorman, Dolj and Olt counties.
Cargill also develops farmer financing programmes. It now has contracts with 400 farmers and invests between 15,000 and 75,000 euros per farmer.
In recent years, most vegetable oil firms have seen their profits shrink so they switched to biodiesel production or the agribusiness segment. Cargill does not plan to develop on this segment domestically.
According to Fauda, the vegetable oil market will start undergoing a consolidation process this year, posting slower growth.
Cargill in late February acquired LNB International Feed, a producer of premixes for animal food, present domestically through LNB Romania Feed. Acquisitions made by Cargill domestically in the last ten years have reached some 48 million euros, to which 8.1 million euros investments in the silo network and the oil plant are added.
Vegetable oil market
Is put at around 250,000 tonnes oil per annum, with a value of over 200m euros
Annual oil consumption per capita is high domestically, of around 10-11 litres, compared with 7 litres per capita in Bulgaria
Most firms on the market have reported shrinking profits in recent years and switched to biodiesel production or the agribusiness segment
Is expected to witness slower growth this year and start consolidating
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