Raul Ciurtin, chairman of dairy producer Albalact, which owns the milk brands Zuzu and Fulga, expects the dairy market to exceed 2bn euros in around three years after it reached one billion euros last year.
"We expect the dairy market to register an above 25% growth rate in 2008, maintain last year's registered rate, and top 2 billion euros over the next three years," stated Raul Ciurtin, Albalact chairman and company shareholder.
Therefore, according to Ciurtin's estimated growth rate, the dairy market will be worth 1.3bn euros at the end of the year due to rising consumption, particularly on the yoghurt segment, but also due to higher shelf prices as a result of the increased cost of raw materials.
"At a European level, the dairy market is experiencing a crisis in terms of raw materials, which is why domestic milk prices increased by over 35% last year against 2006. Prices will certainly continue to remain high this year, and we'll be forced to raise the price of end products," said Ciurtin.
He explained that the company would continue to invest in agricultural development this year in order to secure the necessary flow of raw materials.
In 2008, Albalact plans to invest around 7m euros to increase the capacity of its farm in Vaidei, Hunedoara, and develop a new farm in the same county, which will allow it to produce 50,000-60,000 litres of milk per day.
"Investment that boosts milk production as a raw material is a strategic decision in the context where prices are rising amid a shortage of milk," explained the company's representative.
The Alba-based company, which finalised investments worth above 10m euros last year in order to build a new dairy plant in Alba-Iulia, has also earmarked 1m euros to start production of Albalact-branded cheese products in March in its first plant.
In 2007, Albalact shareholders also proposed the appointment of Mihai Miron, founder of Europharm pharmaceuticals producer, to the company's board of management.
The move will support Albalact's entrance onto the baby food segment; a market that the Europharm founder is well acquainted with.
In the wake of this year's proposed investments and the launch of new product ranges, the producer expects to derive turnover worth approximately 70m euros, up over 50% against 2007, according to ZF estimates.
Raul Ciurtin would not comment on Albalact's 2007 turnover, but the company's previous estimates indicated turnover worth 42m euros.
Albalact (ALBZ) is listed on RASDAQ. Over 50% of the company is held by Petru Ciurtin and Raul Ciurtin, while the most important minority shareholders are investment funds RC2 and Julius Baer which hold 13% and 5%, respectively.
Albalact
Will continue to invest in agricultural development this year in order to secure the necessary flow of raw materials
For 2008, Albalact plans to invest around 7m euros to increase the capacity of its farm in Vaidei, Hunedoara, and build a new farm in the same county, which will allow it produce 50,000-60,000 litres of milk per day
Has also earmarked 1m euros to start production of Albalact-branded cheese products in March in its first plant
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