Tnuva could exit Romanian market

Newsroom 28/11/2011 | 13:58

Tnuva is considering selling or closing down its local dairy business due to heavy losses, according to the Israeli publication Globes quoting sources from inside the company. This could be one of the first measures taken by new chairman Shlomo Rodev although no official announcement has been made so far.

The Israeli dairy producer is estimated to have invested about EUR 60 million locally since 2005 with the goal of establishing an integrated business – from milk production to product distribution under the Tnuva and Yoplait labels. The intention was also to use the Romanian company as a bridgehead for Tnuva’s international operations.

While the company hoped to reach yearly sales of EUR 50 million by 2008, the figure did not surpass EUR 20 million according to Globes. Following the economic crisis the company had to compete against lower cost dairy imports, while Tnuva Romania Dairies’ output was 50 percent more expensive per liter than that of other local dairies.

This March Tnuva closed its cow farm in Adunatii-Copaceni (near Bucharest) which covered 25 percent of the milk production of its Popesti Leordeni factory, also due to financial considerations. The company announced at that time that despite posting loss for several years it didn’t plan to leave the local market.

Simona Bazavan