Vel Pitar, one of the leaders of the domestic bakery market, intends to invest over 25m euros this year in retail, logistics and administration, as well as in acquiring production equipment.
"The investment plans for our three companies (Sapte Spice, Vel Pitar and VP Magassin) include projects worth over 25m euros, excluding the possible acquisitions of new companies. Investments included in annual budgets are strictly technological ones, which are aimed at the retail, logistics and administrative segments, excluding marketing and research activities," stated Dan Trifu, strategy vice-president of Vel Pitar.
According to Trifu, marketing investments will be higher this year, with a heightened focus on promoting products such as the mini-cakes brands (launched last year), namely Roll4Ever and Alma Dolce, as well as a new category of pre-baked bakery products including French Rolls and the packaged bread brand French Toast. "The promotion activity itself, related to the company and its products, will require a budget of around 3m euros," said Trifu. Amid these investments, Vel Pitar representatives expect to witness a turnover growth of around 25% for the group's three companies against 2006.
"We expect the cumulated turnover of Vel Pitar's three companies to increase by around 25% against 2006, but it may not happen as forecast because of the problems the market of our main raw material, the wheat, is experiencing," added Trifu.
According to the information supplied by Vel Pitar, the companies part of the milling and bakery group generated a cumulated turnover worth $110.6m (around 82.2m euros) last year. If the results remain in line with the estimated growth rate then Vel Pitar's turnover could reach $138.2m, exceeding the 100m-euro mark.
The producer operates 12 bakeries and 7 mills throughout Bucharest and 10 counties in Romania. The company also has its own network of 170 stores, which covers around 10,000 square metres of retail space, as well as a national distribution network for its packaged products (bread, biscuits, wafers and pasta). Of the 170 stores, 151 have been modernised over the past three years. In the first half of this year, Vel Pitar divided its business into 10 separate firms.
As a result, two distinct firms operating in the milling industry were created- Sapte Spice and Moara Rahova, and the store unit VP Magassin- while Vel Pitar retained responsibility for production and distribution of bakery, biscuit, pasta and mini-cake products.
Vel Pitar is owned by the Broadhurst investment fund, which has applied, for several companies it holds, a strategy of spinning off assets not part of the respective companies' core business.
New Century Holdings (NCH) manages Broadhurst and holds a stake of around 80% in each of the 10 companies formed as a result of Vel Pitar's separation.
Vel Pitar
7 operational mills
12 bread production facilities in Bucharest and 10 counties
25m euros earmarked for investments this year
170 own stores, namely 10,000 square metres of retail space
25% turnover growth forecast for 2007, 151 of its stores modernised over the past three years
450 tonnes produced daily including 300 tonnes of bread, 20 tonnes of biscuits and 2,5 tonnes of mini-cakes per day
Pentru alte știri, analize, articole și informații din business în timp real urmărește Ziarul Financiar pe WhatsApp Channels
