Orkla buys Romanian meat processor

Related tags European union

Orkla Foods Romania (OFR), the local subsidairy of Norwegian food
processor Orkla, has acquired one of Romania's biggest meat
processing groups in a bid to garner a market-leading position
there ahead of the country's expected EU accession in 2007,
writes Bogdan Tudorache.

OFR has acquired 100 per cent of the shares of Ardealul, the second largest Romanian producer of pâté and canned meat with sales of around €10 million in 2004. The purchase price was not disclosed.

"The facilities at the Ardealul platform are brand new, and include all the latest processing technology. There will be no need for further investments there in the immediate future,"​ Aliz Kosza, chief executive officer of Orkla Foods, told CEE-foodindustry.com​."Ardealul is the second-largest pâté brand on the Romanian market, and our own brands Bunica and LaMinut are an excellent complement to it, offering a more 'home made' style and using a wider variety of ingredients and higher liver content,"​ Kosza said.

"Our target is to consolidate our position as number two on the market and gain additional market share with the Bunica brand."

Kosza stressed that the Ardealul acqusition, like all of Orkla's investments, was in line with its strategy of building on exisitng areas of expertise within the company. "Orkla only targets successful companies with leading brands in their domestic market. There is perhaps more of a focus on CEE due to the level of market development and greater opportunities there,"​.

Orkla prefers to buy a well-known brand, rather than start a greenfield investment. "The most valuable assets of a company are its brands. We are not interested in buying production equipement and plants - we want to buy market share,"​ Kosza said.

In Romania Orkla' currently sells margarine, ketchup, mustard, sauces, tomato paste, jam, pâté, ready meals and snacks.

"We expect to see an increase in sales of 20 per cent this year compared to 2004, excluding the new acquisition,"​ Kosza added. Orkla entered the Romanian market in 2002 through the acquisition of Topway Food.

Ardealul was formed in 1994 by Ovidiu Costea and Staicu Olteanu, two successful entrepreneurs with considerable experience in the meat industry. The company prides itself on its production facilities, all of which already meet the food safety standards required by the European Union, well ahead of the country's expected entry into the Union in 2007 (and ahead of many other Romanian manufacturing facilities to boot).

The company's staff, including the management team, have agreed to stay with the company after the acquisition.

"We have built up the business virtually from scratch,"​ said Costea. "Orkla will give it more value,"​ added Staicu Olteanu.

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