Tuborg will invest 50 million dollars (over 41 million euros) next year, to boost the production capacity of its Bucharest plant, so as to reach 2.3 million hectolitres in 2011, double the current capacity.
"Looking at the beer segment, and at the drinks market in general, there are two strategic investment opportunities: either to purchase an older plant, or to make another greenfield investment, in Bucharest or in another area," says Shachar Shaine, Tuborg chairman.
Shaine says the decision to make new investments on the domestic market was made a year ago. Originally, the company was planning to buy some land in the centre or western region of Romania.
"We thought of Timisoara, as there would soon be no borders left between Romania and Hungary. We also knew that the Carlsberg group, which we are part of, holds no plants in the neighbouring country. Consequently, we are likely to become a major supplier for the Hungarian market," Shaine says.
The decision to build a plant in the same location, namely Bucharest, where the company holds another production facility, does not affect the plans of the Romanian management to become a major supplier for Hungary.
"For the time being, Carlsberg is supplying Hungary from Poland, Serbia and Bulgaria, but things are going to change in two years, the more so as there will be no more taxes," Shaine believes.
He says that he decided to build a plant in Bucharest so as to better control production.
"This is an advantage for our company, which can better control its entire activity from a single location. Should there have been two plants, production unity would have been harder to achieve," feels the Tuborg official. According to Shaine, he has two missions in the entire process: to persuade shareholders and to convince banks to participate in the new investment by Tuborg.
"I had to convince shareholders that the decision to build in the same location was the best. On the other hand, I must persuade banks, which will secure part of the financing.
"Our results and current market conditions make this an easier task than in the previous years," believes Shaine.
In his opinion, the construction of new production lines within the plant Tuborg owns in Bucharest is beneficial in terms of profitability, too.
"It is more profitable for us to build here, where all details linked to infrastructure have been already set, and the land we own allows us to expand. The advantage of greenfield projects is that one can plan for the long term," Shaine also said.
According to Tuborg representatives, the company owns another land of 6.5 hectares, on which the new facilities are to be erected.
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