In 2002, when it paid Jean Valvis 40m euros for Dorna mineralwaters, US giant Coca-Cola made a major step on the only marketsegment it did not have in its portfolio. Dorna Apemin added thethree mineral waters that Coca-Cola still owns, Dorna, Poiana Negriand Izvorul Alb, to the group's portfolio.
Six years on, Coca-Cola is still the only multinational battlingBorsec (Romaqua) and Izvorul Minunilor (European Drinks) domesticbrands on a market of above 300m euros and annual consumption of 60litres per capita.
Coca-Cola does not provide data on the weight of mineral watersales in its domestic business, but production data from theNational Mineral Water Company (SNAM) point to turnover of around100m euros for the company from the three mineral waters.
Thus, during January-April 2009 period, Coca-Cola produced,through Dorna Apemin, 49.3 million litres, down 8% from 2008,according to the SNAM data, and Dorna Apemin last year bottled 141million litres.
On a market put at one billion litres, the market share ofRomaqua, the biggest player, revolves around 33%, meaning thatmineral waters bring the company around 100m euros, according to ZFestimates. According to Coca-Cola officials, Dorna Apemin sales aresimilar with those of Romaqua, meaning that mineral waters bringthe only multinational on this market 100m euros.
In 2008, Coca-Cola HBC Romania posted income worth around 66meuros, up 19% year-on-year, while turnover rose to around 552meuros. Given that mineral water sales brought the group around 100meuros in 2008, mineral water operations can be said to account foraround 18% in Coca-Cola's turnover. Keeping the same proportion inthe case of profit, mineral waters could be "responsible" forincome of around 12m euros per annum, according to ZFestimates.
Coca-Cola officials say they have invested 60m euros in themineral water business located in the Eastern Carpathians since2003.
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