The year 2008 was marked by “tough decisions” of large international players such as Kraft Foods, Coca Cola HBC, or Colgate Palmolive, who decided to outsource their production lines in countries like Bulgaria and Poland. The workers are the ones who suffer from these outsourcing processes, hundred of unemployed workers, and public actors, who don’t understand aspects such as the role of local and regional community in drawing and keeping an important investor or involving authorities in stimulating a field affected by relocation.
First sign of production outsourcing in FMCG, visible since 2007
Bunge, one of the most important players in vegetable oil market in Romania, was closing down oil factory at Kaliakra (Bulgaria) and was outsourcing its upstream activities in Romania.
Bunge invested some 25 million euros last year in retooling the factory it held in Brasov, where it transferred the oil production from Iasi-based facility, which was shut down. The reorganization plan included the concentration of all operations of crushing, grinding and bottling that Bunge conducts in Romania, at Buzau.
Chosen because of its proximity to the most important sunflower-cropped region and to Constanta seaport, Buzau-based factory has a good strategic position due to its proximity to Bucharest and border with Bulgaria.
Active in Romania since 2002, American-based Bunge group acquired the oil factory in Buzau and its trademarked brands in March last year from Agricover.
As for Unilever, the company was informing its workers in March last year on the board’s decision to relocate the production of Kaliakra brand from Bulgaria in Romania. The decision was part of the company’s plan to concentrate its production activities in strategic locations, capable of supporting long-term growth.
After this decision, the production activities of Dobrich-based plant (Bulgaria) were suspended immediately. All production output of Dobrich-based factory would transfer to industrial platform in Ploiesti, where the company produces now Knorr, Rama and Delma brands of Unilever.
“It wasn’t a decision easy to make. We are aware of the social implications on our employees in Dobrich, and this is why I would like to promise them we will act responsibly and will treat them with all the respects and dignity that Unilever it is known for”, said Marc Engel, vice president for logistic operations of Unilever Europe.
The decision to shut down production operations in Dobrich has directly affected 70 employees of Unilever and 30 workers under collaboration contract.
Colgate-Palmolive chooses Poland over Romania
Earlier this year, in March, Colgate-Palmolive shut down Brasov-based production facility and outsourced production line to Poland, measure included in an activity reorganization program.
Colgate-Palmolive was stating its intention to strengthen its cleaning products manufacturing in Eastern Europe. The roundup was part of the prior announced activity reorganization program, program designed to upgrade and enforce the producer’s operations.
The consolidation plans were gradually implemented, during a transition period, following to be completed by yearend. As a result of this process, Brasov-based facility will be closed, the production following to be outsourced to the company’s factories from Poland.
Article comments "Outlook on major relocations in Romanian FMCG industry in 2008"
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