The over 50 million-euro investments CrisTim, the leading player on the charcuterie market, has operated to expand its business were secured through ongoing income reinvestment and by raising banking resources, says Radu Timis, chairman of the group.
"We ended all years in the black because otherwise we wouldn't receive funds from the bank, and capital from the bank is the healthiest from our point of view," says Radu Timis.
This year, the company plans to invest 5-7 million euros exclusively in production activities, in order to boost the daily capacity of the plant of Filipestii de Padure.
"When bank resources are no longer enough, resorting to an investment fund is the next step. We are not considering such a solution right now, because the resources we have already make the company's development possible. Of course everything depends on aggressiveness on the market, the arrival of some multinationals, which may make such a move more urgent," says Timis.
However, CrisTim chairman considers the world's major players in the charcuterie industry will not enter the domestic market sooner than in several years' time, adding to investments started by US giant Smithfield in Timisoara, the presence of Campofrio Spanish group through the Tabco-Campofrio arm, and to the only greenfield project Germany's Reinert started on the market.
"Companies competing on the European market will wait for the 600 plants operating on the black market to be closed before looking at the domestic market," he says.
CrisTim will also benefit from the closing of the plants that do not comply with the European regulations, estimating it will reach production capacity of 300 tonnes per day by 2010, from some 180 tonnes at the end of this year.
"We're targeting 15% sales growth this year, to 32,000 tonnes from 27,000 tonnes last year," he says.
CrisTim last year generated consolidated turnover worth 118 million euros and an operating margin of 11%, down from 14% in 2005, amid rising investments in production. The company expects consolidated turnover to hit 130 million euros this year.
CrisTim chairman considers one of the biggest problems companies in this industry are coping with is related to the fact that shareholders have not handed over business management to some managers.
CrisTim has a managing board and managers for each department. According to their own estimates, the value of the company last year stood at 140 million euros.
The company is exclusively focusing on the domestic market, which is still boasting solid growth potential amid the boom of modern retail.
CrisTim this year started a process whereby it splits activities along independent business lines to boost the efficiency of each entity.
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