Lemarco to buy a sugar factory to increase production

Lemarco owns a sugar factory in Liesti, Galati County, which can process an annual 53,092 tons of raw sugar, according to the quota allocated by the Ministry of Agriculture, representing almost half of Lemarco's production capacity. The company currently has a 15.5 percent market share on the domestic market, compared to 30 percent before the allocation of quotas by the Ministry of Agriculture.

"We are considering taking over a unit that does not have Lemarco's financial possibilities or its profitability," Dan Popovici, Sales Manager of Lemarco, told Business Standard. He added that company shareholders have been contemplating this move for some time now, although no decision has yet been made. Popovici did not mention how much money is available for such a transaction or the name of the unit being considered for takeover.

The Romanian sugar market is estimated to worth €250 million, and other main players on this market are Agrana, part of the Austrian Agrana group, and Zaharul Oradea, controlled by the German-French Cristal Diamant group.

Romania received a quote from the European Union which includes 109,164 tons of sugar from sugar beet, and 329,636 tons obtained from refining imported raw sugar.xxxxxFactories processing sugar beet have been assigned quotas according to the quantity of beets they have been processing from 1998 to 2002.

There are presently nine operational sugar factories in Romania, of which five process only raw sugar (Buzau, Liesti,

Urziceni, Calarasi, and Corabia), two (Roman and Oradea) that use raw sugar and sugar beet, and a further two (Ludus and Bod) which process only sugar beet.

Lemarco posted net sales worth €66.5 million and net profit of €5.4 million ixn 2006. The company was founded in 1990, and is also involved in furniture production, making up 3 percent of the Lemarco business, according to company officials.

Sugar consumption in Romania is about 550,000 tons per year and the average per capita is 25 kilograms, compared to 35 kg in the EU, and 30 kg in Bulgaria.