European Drinks company, part of European Food & Drinks food industry group owned by Micula brothers, is tapping into foreign markets with small prices to be able to withstand competition from major international brands.
"On foreign markets, where there's cutthroat competition and our brands do not enjoy the awareness they have in Romania, one can only enter through very low prices," said Adrian Rotar, managing director at European Drinks. He also stated that the domestic market has proved to be more profitable for the company so far owing to the lower shipping costs than in the case of exports.
At present, the company's exports account for around 3% of its overall sales worth around 300 million litres per year.
European Food & Drinks group distributes its products in over 20 countries in Europe and is in talks to start mineral water exports to Japan, as well.
Micula brothers opened group subsidiaries in eight countries of the region, namely Moldova, the Czech Republic, Slovakia, Hungary, Poland, Russia, Ukraine and Bulgaria. The first company implanted abroad was created in 1995, and the latest subsidiary was opened around two years ago, in Poland. These companies have more than 100 employees.
The group also exports its products through partnerships with local distributors. As a matter of fact, the company's representatives are present at almost all international food fairs, which bring them more partnership contracts for foreign markets.
The group's exports have surged by almost 50% this year from 2006, with export growth outpacing domestic sales growth. Micula brothers previously stated partnerships with major store chains had a major contribution to export growth.
The producer started exporting soft drinks to Jordan, Italy, Ireland and Spain this year.
Sales of European Drinks soft drinks, both on foreign markets and the domestic market, advanced by 25-30% in the first half of this year from the same period of 2006.
The company posted turnover worth 139.2m euros last year, up almost 17% from 2005, ranking third at present on the Romanian soft drinks market, after Coca-Cola and Pepsi.
European Drinks saw its net income double in 2006 year-on-year, to 1.4m euros, according to company data.
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