Unirea Iasi, the edible oil producer, owned by the US giant Bunge, last year logged losses standing at 3.4 million euros (12.37 million RON), compared with net income worth 2.2 million euros in 2004, due to the domestic currency''s growth against main foreign currencies and rising raw materials prices.
The company in 2005 derived turnover worth 44.8 million euros (162.1 million RON), 10.6% lower year-on-year.
Bunge representatives specified that Unirea had slipped into the red because of the domestic currency''s appreciation, which hurt the revenues collected from seed exports. At the same time, the company in 2004 had bought raw material from the Romanian market at prices higher than last year''s import prices.
"The turnover slump was also triggered by the fact that edible oil prices did not have the same rate of growth as seed prices, and we kept our prices at the level of the market," specified Mihaela Galatanu, corporate affairs manager with the company.
Bunge representatives say Unirea will no longer accrue losses at the start of this year, especially considering that since the last quarter of last year the company has been delivering its entire production to Bunge Romania SRL, after sealing a processing contract with Bunge.
"According to this contract, Bunge is to provide all raw materials for Unirea and then take over the entire production of the company at a certain profit. Bunge will absorb all production costs and as a result Unirea will no longer be in the red," says Galatanu.
Last year, most companies operating on the vegetable oil market reported weaker financial results and lower incomes than in 2004, despite the higher volumes delivered onto the market compared with the previous year.
The growth of the domestic currency and the rising supply of edible oil on the market generated some price changes, sometimes even below costs.
This situation pushed Bunge Romania representatives to close the Muntenia Bucharest plant, in an attempt to boost production efficiency. According to the company''s representatives, Muntenia plant costs were 200,000 euros higher than those of the other plants in the group, Interoil Oradea and Unirea Iasi.
Bunge Romania did not give up any of its brands after the plant in Bucharest was closed, as production was transferred to the other two units of the group.
The main brands of the company are Unisol, Floriol, Muntenia, Horea and Raza Soarelui, with the US group''s market share standing at 36%, according to the company''s own information.
As shown in the US group''s preliminary reports, Bunge Romania last year posted turnover worth 530 million RON (147.2 million euros), 14% higher in RON than in 2004.
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