Covalact rebrands, changes its strategy for a doubling of business by 2010

“After having been taken over by the American Sygma Bleyzer investment fund, we became part of a group, with Primulact and Lactate Harghita, in which we complement each other. We will concentrate on fresh milk and cream, and Primulact on cheeses. We estimate a doubling of business by 2010,” according to a declaration for Business Standard by Balan.

The dairy producer will invest considerably in the coming year in the promotion and rebranding of the company, which intends to become one of the main fresh dairy industry players, dominated at present by Danone, Tnuva, Friesland and Albalact. Balan added that Covalact will also begin producing dairy desserts as of next year.

“Last year, we obtained some €21 million, and are targeting turnover this year worth €23 million. We revised our financial estimates because we reduced our production of powdered milk and butter, no longer profitable due to imports, much cheaper than Romanian products.” explained Balan. He added that sales were compensated by a rise in fresh dairy, which increased 14 percent in the first nine months compared to the same period last year.

The domestic dairy market is worth some €1 billion.

SigmaBleyzer Southeast European Fund IV (SBF IV) acquired 70 percent of Covalact shares in 2007 for some €7 million.

Romanian annual per capita consumption is 5.4 kilograms of fresh milk, while Germans consume 33.6 kg, France 33.7 kg, and Bulgaria 16.2 kg, according to data provided by producers.