Czech OTK group, which bought the flexible packaging unit of Tiger Somes of Dej, plans to triple the turnover of its Romanian branch in five years at most, says Petr Ryska, general manager with OTK Group.
"The flexible packaging unit boasts the biggest increase within OTK group and we expect the same to happen on the Romanian market, as well. Moreover, we have a significant plus in the fact that after acquiring Tiger Somes we have a mixed customer portfolio, that is we work both for smaller companies and for international groups," Ryska told ZF.
According to him, the flexible packaging unit last year accounted for a third in the group's 50 million-euro sales.
In the wake of the acquisition, the Czech group announces investments of around 5 million euros in the domestic unit of Tiger Somes, with OTK's representatives saying one of the company's first projects for next year is to start producing labels in Dej.
"At this moment, investments will be mainly aimed at the development of production facilities and their volume will not be very large, but in 2-3 years we will have to invest in new technologies as the flexible packaging market is under constant development," specified Petr Ryska.
OTK Group, specialised in the production of packaging and labels, entered the Romanian market by acquiring the flexible packaging unit of Tiger Somes accounting for 40% in the Cluj-based company's turnover. According to company information, turnover on this segment last year topped 3 million euros. Total sales Tiger Somes generated last year reached 10.2 million euros, up 20% year-on-year.
OTK Group representatives chose not to disclose the value of the deal with Tiger Somes, but specified the sum they paid for the packaging unit amounted to several million euros.
"Takeover talks started last March. We originally wanted to operate a greenfield investment in Romania, but we subsequently decided we'd acquire an existing company. It was relatively easy for us to choose the Dej company as there are only several producers of flexible packaging on the Romanian market using the technology we require at the moment," stated Ryska.
He also said another reason that prompted the decision to buy a part of Tiger Somes was the fact that the company also had Italian shareholders, beside the Romanian ones, which gave it extra credibility.
"We want to keep everything as it is, namely keep the management team and employees. Employees are well trained, but we want to operate know-how transfers (...)," specified Ryska.
Tiger Somes was set up in 1992 as a Romanian-Italian joint venture. To develop its business, it acquired a plot of land of 3.8 hectares in 2001. The greenfield construction and the acquisition of equipment took 2.8 million euros.
OTK Group owns three plants in the Czech Republic, one in Romania, and is to form a joint venture in Russia in the coming months.
The deal in brief
OTK Czech group bought the flexible packaging unit of Tiger Somes, accounting for around 40% in the Dej company's turnover
Talks for the takeover of the unit started last March and were finalised last month; OTK had initially planned to operate a greenfield investment in Romania
The value of the deal was not unveiled, but OTK representatives specified the sum they paid for the flexible packaging unit of Tiger Somes amounted to several million euros
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