Coffee producer Elite will close its facility in Bulgaria in one month's time and initiate a 10 million-euro investment project to boost its productive capacity in Bucharest.
"We will close our Bulgarian factory on August 1 and begin investments in the factory we have in Bucharest this autumn. The factory in Bulgaria is currently employing 30 people and the company will assist them in finding employment. Some of the assets of that factory will be transferred to Romania, while some will be sold," said Eli Rachmut, general manager of Elite's Romanian operations.
He was appointed manager for Balkan operations last year.
The Bulgarian market will be subsequently getting its coffee supplies from Romania as of this August. Exports to Bulgaria should amount to 6-10 million euro a year.
Rachmut said Elite's Bulgarian factory employed as many as 100 people at one point, though the number had gradually gone down. "The news about the closing of the factory came as no surprise to the Bulgarian employees who knew about the company's projects," Eli Rachmut added.
The expansion works on the factory in Bucharest will begin this autumn and are scheduled for completion in 2006. The production space within the factory in Bucharest is to be expanded from the current 5,000 sqm to 20,000 sqm by 2006, including new production facilities and new storage space.
Elite's long-term plans include turning Romania into a regional centre, with exports from the country going to Bulgaria. Other Balkan destinations would be added later.
"The main benefit will be the reduction of production costs, since by concentrating our facilities into a single location we will save a lot of money. We chose Romania because the factory here was larger and more modern than that in Bulgaria," Elite Romania's manager explained.
Elite currently employs about 500 people directly and the investment in the new assembly line will create at least 50 jobs.
Ever since entering the Romanian market nine years ago, Elite has invested about $15 million. Elite Romania is part of Elite International, an Israeli company that has operations running in a number of European countries.
Elite is the leader of the Romanian coffee market, controlling over 50% of it. In Bulgaria it is ranked number two after Kraft, according to data provided by market research company MEMRB Romania and cited by Elite. US-based Kraft is currently the Romanian market's number two.
Elite Romania posted $60 million turnover last year and set out to attain $65 million this year. It branched out into the seeds and peanut market this year, following investments in an assembly line in Bucharest.
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