The general manager of Contec Foods, one of the leading producers of canned vegetables and fruit on the local market, says he is not interested in acquisitions, as the plant acquired in Tecuci allows for the production to at least triple.
"We are not interested in acquisitions because our asset is big enough for us to build more than three or four plants. To my mind, it is more difficult to work with several production centres in different areas because you don't have the same control," he says. According to Aifun Suliman, the potential of the Tecuci-based plant is not yet being taken full advantage of.
"We also have the advantage of having at our disposal one of the biggest vegetable-cultivated areas. We left Bucharest (where the company had a production centre until 2005) because operating costs were too high there," believes the manager of Contec Foods.
The company had its first production centre in a small town in Dolj county. The shareholders later decided to move production closer to Bucharest, due to logistical problems, to the shortage of raw material and to the rather long distance to its main market. After starting production in a rented space close to the Capital, the two Contec shareholders found out that the Tecuci-based plant was for sale.
"We acquired the plant in Tecuci in 2004, following an auction organised by the AVAB (Bank Assets Resolution Authority). We then paid about one million dollars. After this acquisition, we gave up all our other production centres and we concentrated our activity in Tecuci," says Aifun Suliman.
According to the Contec shareholder, the plant acquired in Moldova was the biggest in Romania before 1989, also being the main vegetable and fruit exporter.
"We bought 18 hectares of land and 6 hectares of buildings. It's a big asset, but this also brought us problems when refurbishing the plant, which is why we only moved our operations there in 2005," he says.
With the acquisition of the plant, Contec Foods shareholders also bought 135 hectares of orchard, which is now undergoing a rejuvenating process.
"Shortage of raw material is one of the biggest problems we are facing. We have to go to Hungary for example, to buy cucumbers, so as to meet our orders," says the manager of Contec Foods.
The company has a production capacity of some 20,000 tonnes per year, over 85% of which is under its own brand. "We also work as a private-label company for key-accounts networks," says Aifun Suliman.
The portfolio of products of Contec Foods includes three categories: tomato paste and tomato-based products, pickles and sweet products (jam and compote). "In the beginning, tomato paste had a bigger share in the sales, but the exit of some of our competitors helped us balance our production," he says.
Contec Foods
Is not interested in acquisitions as its assets can sustain at least three times the current production
Posted 11.3 million-euro turnover in 2005, and expects it to grow by at least 30% in 2006
Acquired the plant in Tecuci in 2004 in an auction organised by the AVAB (Bank Assets Resolution Authority).
The company has a production capacity of some 20,000 tonnes per year, over 85% of which is under its own brand.
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