Dan Trifu, development manager with Vel Pitar, one of the top three players in the bakery industry, says the decision to break up the company into three distinct entities targets the transformation of Vel Pitar branches into independent profit units.
Vel Pitar is going to modify an older break-up project this year in a bid to separate the store network and milling units from bakeries. The company will set up two separate companies that will manage the milling activities and the store unit, while Vel Pitar will only handle the bakery business.
"The two companies that are being formed now are practically the more advanced units that have attained the necessary degree of autonomy to operate independently," states Dan Trifu.
According to Vel Pitar development manager, this process will allow the new companies to make better use of the opportunities the market provides in the domains in which they operate.
"A unit within the group, whose main customer is the group itself, is not using up its strength. When becoming a distinct company the unit is more interested in finding the best customers that can generate growth," says Trifu.
Vel Pitar operates on the milling and bakery market, specialises in the production of biscuits, wafers and pasta and at the same time operates a store and a distribution network.
"In a company with thousands of employees, several tens of million dollars in turnover and plenty of distinct activities, the need to specialise is obvious," says Trifu. He specifies bakery activities weighed more than 65% in turnover last year, while milling and retail accounted for equal shares in the rest.
Following the break-up, the companies that split from Vel Pitar will try and be the most profitable in the domain they operate in, according to Trifu.
"The two companies will retain the name of the group, but will make reference to their core business," Trifu believes. He specified the name of the two companies would be approved by shareholders.
Vel Pitar is owned by Broadhurst investment fund, which has implemented in the case of several companies it owns the strategy of externalising the assets that were not related to the core activity.
The retailer's growth will also be sustained by the rising number of specialised bakeshops to 50% of the company's total number of retail spaces, compared with 2-3% at present.
The company will open 15 specialised outlets along the concept of "Neighbourhood Bakery" by yearend, with the company's representatives planning to grant the first franchises for this new type of outlet starting next year. The company is to invest 500,000 euros in the outlet network this year.
After the first half of this year, the company reached 0.81 million-euro net income and turnover worth 34.5 million euros.
Vel Pitar group last year hit 74.3 million-euro turnover and 1.7 million-euro income.
Vel Pitar
Will break up into 3 distinct entities, to make better use of market opportunities
2 distinct companies will manage the milling activities and the outlet network respectively, while Vel Pitar will handle the bakery business
In the first half posted net income worth 0.81m euros and turnover standing at 34.5m euros
Makes produces 10,000 tonnes of bakery products, around 300 tonnes of biscuits, 10 tonnes of wafers and around 120 tonnes of pasta every month
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