The company's decision is based on market expectations that Romanian beer consumption will increase by more than 20 percent in coming years.
"We plan to develop our business and buy an older factory in Romania. The investment needed to develop and renovate is higher than that for building a factory," Shachar Shaine, President of URBB, told Business Standard. According to Business Standard estimates, the investment could rise to some $55 million (€40.07 million), considering investments made in similar projects. Shaine said the opening of the factory could take place in two years. "At present we are conducting a study to see if we should expand our production capacity in Bucharest, or if it is worth changing and developing a greenfield project in the western part of the country," he added.
URBB intends to invest €50 million to expand its beer production by 2011. The company has been operating on the Romanian market since 1997, posting net sales worth €100 million in 2006, and estimating a 30 percent increase in sales for 2007.
The domestic beer market is estimated to be worth €1 billion, and main players are Heineken, Ursus Breweries, URBB, and InBev.
