FMCG producer Procter & Gamble will invest over USD 100 million in a new upstream unit for personal care products manufacturing in Urlati, Prahova county. The opening of the plant specialized in personal care manufacturing will bolster workforce by 300.
Urlati-based plant is the first Greenfield investment ever made by P&G in Romania and is designed to supply European markets.
The company analyzed all options of setting up the plant in Urlati since 2007, choosing Romania over Turkey, Russia, Poland and Ukraine.
An attractive economy, costs and fees for production and transport are the major factors that climbed Romania on top of the list.
“Our expectations are linked to the opportunity of working together with Romanian authorities in finding solutions for a constant growth of investment value and to increase workforce,” company’s External Relations Manager, Ramona Brad said in an interview.
She stressed that the new location will fuel the fast-paced climb up on the shampoo and conditioners market in the region.
“Considering that FMCG segment underwent a sustained growth pace in Eastern Europe, the set up of a plant near markets with highest development, it is only a matter of course. We cannot confirm at this moment what products in beauty range we will produce. This will depend on the capacity evolution at the plant, and by the business need evolution,” Simona Brad added.
10% advance for P&G business in 2009
P&G posted in 2007 a 40% market share for detergents and beauty products, over 60% in child care products and body care and approximately 20% in oral health care segment.
For 2008, the company sees a minimum 10% growth on overall business.
Procter & Gamble has 170 years of history. The company was founded in USA and now operational in over 180 countries providing products in household’s cleaning and maintenance, personal and baby care and foodstuff.
Procter & Gamble Romania is active in Romania since 1992, and in 1995 the company carried an investment in detergents and bleachers production worth over USD 40 million.
In 2006, P&G opened in Romania, the Regional Service Center that provide acquisition services to all P&G subsidiaries in Europe, conducting annual transactions of more than USD 150 million.
Popesti-Leordeni-based factory – “More then sufficient” for Israeli Tnuva
Active in Romania since 2007, the fresh dairy producer Tnuva chose to set up here a Greenfield project, pouring EUR 55 million in a factory in Popesti-Leordeni.
“We wanted to set up a factory here starting from zero, as we noticed a growing potential and we considered we must be more flexible. For the moment, we have no intention to expand investment, as the factory near Bucharest covers the full market demand,” Tnuva representatives said.
Most of the 300 employees are Romanians, and the major quantity of raw materials comes from local resources. Tnuva Romania was founded in 2004 by Tnuva Israel in a joint venture with European Bank for Reconstruction and Development.
Tnuva is one of the major competitors on the domestic yoghurt market, together with Danone Romania, Friesland and Albalact. All four companies absorb some 90% of the Romanian market.
Muller Romania plans to bolster its upstream capacity
German-based Muller, Europe’s second biggest dairy producer, active in Romania since August this year, aims at climbing to Top 3 players on the local yoghurt industry by yearend and to set up a factory and own downstream chain.
Muller plans to broaden its products range, according to statements of Muller Dairy’s chairman, Jacob Katz, without excluding the possibility of buying a local dairy producer.
Muller’s headquarters is located in Bragadiru, products shipped from Germany being stored in Bucharest, Cluj-Napoca, Timisoara and Iasi. The company has 80 employees and plans to upsize workforce to 100 by later this year.
Business reorganization plan in Coca-Cola and Nestle
While other FMCG companies show satisfaction with the costs and fees of production and shipping in Romania, other companies, namely Coca-Cola Hellenic Bottling Company Romania or Nestle decided to cut a share of local production mass.
Thus, Coca-Cola HBC Romania decided in mid September to shut down Oradea-based unit in order to upgrade local activities, focusing on raising production capacity in units from Iasi, Timisoara, Ploiesti, and Dorna.
Activity of factory in Oradea will be carried out until mid November, the storage room following to remain a downstream center in the region.
In the time process is completed, all 102 employees will each receive a compensatory pay of seven up to ten salaries according to stipulations in work contract. Furthermore, they will have “the full support of the company and recruitment companies that will help them in finding new positions in terms with their professional training,” according to company representatives.
September this year, Nestle Romania will shift ice cream production from Bucharest to the Varna-based unit, stemming from efforts to reorganize operations in south-east Europe.
Nestle will provide compensatory pay packs to all 76 employees affected by this shift and will carry on investments on Romanian ice cream market, especially in commercial and distribution force.
Colgate-Palmolive and Bunge to reorganize activities in own units
Reorganization of activity was the main reason why Colgate-Palmolive company resorted to halt activity of factory in Brasov and switch production to Poland by yearend.
The company will lay-off its 190 employees by the end of this year, the building and land parcel of the factory following to be sold afterwards, according to own statements.
Earlier this year, U.S. group Bunge closed down cooking oil factory Unirea Iasi, as part of reorganization plan locally.
The factory from Iasi, with approximately 200 employees, is the third unit shut down by vegetable oil producer, after Muntenia Bucharest and Interoil Oradea.
The reorganization blueprint stands for concentrating all operations of cracking, refinery and bottling that Bunge carries out in Romania, investing some EUR 25 million in factory upgrade.
24.8% growth for Romanian fast moving consumer goods in first half 2008
Local FMCG industry rose 13.6% this year in terms of volume, and 24.8% in terms of value, against similar interval of 2007, reads an off-premise study framed by market research company MEMRB Retail Tracking Services.
Food, non-food and beverages market soared two-digits percentage rates each, in terms of sales posted for first half this year.
Thus, biggest advance was recorded on food segment - 27.1%, while beverage and non-food products sectors rose 25.7%, respectively 15,5%.
The first half 16.6% boost of non-food segment was fuelled in terms of volume by cosmetics and personal care products, with 21.8% higher volume than last year.
In terms of sales value, biggest advance was registered by non-food category, 24.7% followed by cosmetics and personal care products (18.6%) and detergents (14.4%).
Translated and adapted by Camelia Oancea.
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