Currently Bunge is Romania's largest producer of edible oils, a position it has built upon in 2003 following the announcement that its turnover for the year grew a solid 12 per cent to $58 million (€31.6m) when compared to the figures for 2002.
The figures came despite challenging market conditions which saw oil consumption fall significantly at the start of the year. "Oil consumption dropped 6 per cent in the first half of 2003, mainly because the income portion spent on food actually shrank. However, the growth posted in the second half largely made up for this decrease," said Robert Arsene, general manager of Bunge Romania.
Retail market experts GFK Romania say that Bunge brands in Romania - represented by the Floriol, Unisol, Muntenia, Horea and Raza Soarelui labels - accounted for approximately 36 per cent of the market last year, up from the figure of 27 per cent at the end of 2002. The 9 per cent increase in its market share has meant that the company has managed to strengthen its position as the number one player in that country's market segment.
However, speaking to Romanian journalists Arsene added that the sale price of sunflower seeds in 2004 could make it an even more challenging year. This would probably stand for both its Romanian division and its other eastern European operations in view of the fact that the spring crops of sunflower seeds are widely expected to be down on last year's harvests.Currently Bunge Europe has three processing plants in Romania - the Muntenia Bucharest and Interoil Oraddea facilities which it bought last year and the Unirea facility in which it became a majority shareholder at the end of 2002.Currently Bunge has three main competitors in the $300 million edible oils market in Romania, Topway Craiova, Ulvex Pandarei and Argus Constanpa. Currently total edible oil production capacity in the country is estimated to be around 410,000 tons a year, but last year only 210,000 tons was produced.
At the beginning of the month Bunge Europe signed a preliminary agreement to acquire Polish edible oil and margarine producer Kama Foods from bankruptcy receivership, through EWICO, a limited liability company in Poland. Bunge Europe owns a 50 percent stake in EWICO, with the remaining shares owned by an individual investor. "This strategic acquisition is part of Bunge's continued expansion in Eastern Europe," said Jean-Louis Gourbin, CEO of Bunge Europe. "It will allow Bunge to build closer relationships with farmers and to better serve customers and consumers in Poland."
The €17.4 million transaction is expected to close by the end of June 2004, when EWICO will pay the outstanding debts believed to total some €4 million. From 1 March until the transaction closes, Bunge said that EWICO will operate Kama Foods under a lease agreement.