Boom time for Nestlé Bulgaria
has made a clear break into profitability, having announced a 70
per cent increase in its net profit for the 2003 period.
Nestle started manufacturing in Bulgaria in 1994 and for the next seven years the company sustained continued losses as it struggled to recoup the investments it had made. Now, however, the company is hoping that last year's strong performance and an even better performance in 2004 will help it to bring the company into a sustained long-term profitability.
In 2003 the division's net profits jumped to BL 3.4 million (€1.7m), said CEO Yannis Lazaridis at an event to mark the 10th anniversary of Nestle's presence in the country. This figures came off the back of a sales turnover of BL 86 million, which in turn marked a 27 per cent increase on the figure for 2002.
Currently Nestle Sofia holds approximately 80 per cent of the market for coffee in the country, 65 per cent of the market for instant soups and 50 per cent of the cereals market. In the fragmented and highly competitive confectionery sector the company has not achieved such a high degree of success, managing to carve out 17 per cent of the chocolate products market and just 11 per cent of the market for biscuits.
The company's increasing footprint in the country has been fed by a concerted sales and marketing campaign which has been matched by an investment in its production facilities. In 2003 the division invested BL 9 million in upgrading and expanding its plants, and in 2004 it says that figure should rise to BL 10 million.
Nestle established itself in Bulgaria by investing in a small chocolate operation in 1994. Currently the division employs a staff of 1,000 and total investment during the ten years is put at BL 54 million.