"The real value of the dairy market in the following years is forecast at around 3-4bn euros, with estimates based on the population's consumption requirements," states Valeriu Steriu, chairman of the Romanian Milk Industry Employers' Association (APRIL).
According to Steriu, last year the dairy market reached 900m euros, which also includes a volume of over 1.7 billion litres of milk, directly offered onto the market from farmers to consumers.
This quantity could bring the level of consumption in Romania in line with EU levels.
Industry players this year expect a 25% sales increase in the context where over the past two years specialties, as well as milk-based desserts, have boasted the highest growth rates in the food industry.
Moreover, the solid growth rate has also attracted the attention of global dairy players and investment funds, with LaDorna group's takeover by French giant Lactalis being the latest deal.
This is the biggest domestic dairy deal so far, as Friesland paid 17m euros to gain control over Napolact, Somesana Satu Mare and Industrializarea Laptelui Mures when it entered the market. At present, the three companies generate an annual turnover worth around 130m euros. Another important deal recently on the dairy market was the acquisition of Covalact of Sfantu Gheorghe by US investment fund Sigma Bleyzer. At present, the fund owns 95% in the company but plans to acquire several medium-sized dairy players and merge them in order to set up a group that is able to compete with the domestic subsidiaries of multinationals.
Tnuva Israeli group entered Romania through the largest greenfield investment operated by a foreign company in the industry, after it earmarked 55m euros for the construction of a plant in Popesti-Leordeni.
After the recent acquisition of LaDorna, Albalact is now the only independent producer among the top five largest domestic dairy producers. Through floatation, the company attracted Julius Baer International Equity and RC2 investment funds in its shareholder structure.
In the following years, Albalact may become the favourite takeover target of foreign players that have yet to arrive on the market.
What is certain, however, is that after several years of probing the market, Lactalis and Meggle now own production facilities in Romania. The two companies have not offered any details of possible deals on the domestic market.
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