Alba Iulia-based Albalact, one of the major players in the dairy industry, saw its turnover climb by 25% in the first half of this year from last year's H1, to 11.9m euros (42.3m RON).
This was because of the sales of the Zuzu brand it launched early this year.
"Zuzu sales are far higher than our initial estimates. We have to act even faster to sustain growth. We plan to expand our warehouses countrywide and particularly in Bucharest, where most orders come from," stated Raul Ciurtin, Albalact chairman.
He says the new brand is going to post better results than the Fulga brand since it is positioned on a much more dynamic segment than that of UHT milk, namely that of fresh dairy.
In the first half, Albalact's income dropped almost three times, to 170,000 euros (600,000 RON), from 425,000 euros in the period January-June 2005. The profit decline was triggered by the bigger marketing budgets, according to the company's representatives. In the first six months, Albalact spent almost 600,000 euros to promote Zuzu and Fulga brands, with the expenses weighing 5% in the company's turnover.
Albalact shareholders invested more than 2.5 million euros to create Zuzu brand positioned in the category of yoghurts and fresh dairy. Zuzu range includes 23 products, milk and yoghurts and primarily targets young persons and families living in cities.
"While over the past two years we have directed the raw material and sales particularly toward the Fulga ultrapasteurised milk (UHT), which propelled Albalact to an important position, starting this year we are going to largely focus our investments on Zuzu. We will add another five products to Zuzu range," Ciurtin also said.
According to the company's representatives, investments aimed at promotion would increase by at least four times this year, with around 70% of the budget being earmarked for Zuzu brand. Beside Fulga and Zuzu, Albalact also sells pasteurised milk and cheese under Albalact brand.
Albalact concluded last year with turnover worth 16.5 million euros, up 50% year-on-year, while the company's net income amounted to 825,000 euros, 16% higher than in the previous year.
In the wake of investments topping 7 million euros in a new plant, the company is going to double its production capacity this year. The investment will be financed through Sapard funds, the company's own resources and a banking loan, as well as through a share capital increase worth 1.2 million euros. The plant will process 200,000 litres of milk daily, double the company's current production capacity.
The dairy market last year reached a value of over 800 million euros, with Friesland, Danone, LaDorna, Hochland, Albalact and Covalact as the main players.
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