Agricola Bacau to beef up own brand store network, steak out export market

Local meat producer Agricola Bacau managed to increase its turnover by 12 percent last year, after re-organizing the group of companies. The producer is planning to open new stores under the Agricola Bacau brand this year, says GRIGORE HOROI, president of Agricola Bacau, and intends to increase exports of poultry.

Corina Saceanu

To what extent did Agricola Bacau feel the financial crisis last year? What were your financial results, compared to 2008?

Last year’s economic developments triggered, as expected, changes in consumption patterns. Customers became more price-aware and the number of promotions increased. Agricola International posted a RON 304 million turnover last year, which was up 12.6 percent on 2008. The entire group of companies posted RON 413 million. The amount is not indicative, as from 2009, after we restructured the group, we didn’t include the intra-group turnover.

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What were the best sold products last year? To what would you attribute that?

We saw turnover increases on all business segments and products. The chicken meat segment saw a 30 percent increase; boiled and smoked products, 8 percent; salamis, 48 percent; semi-prepared food was up 20 percent; eggs, up 27 percent. The best sold and known product was the Sibiu salami Agricola Bacau, which held a 31 percent market share among Sibiu salami products in Romania in the second half of last year.

What were the most active sales channels last year? What percentage of sales did they bring?

In Romania, we generate 42 percent of our sales from cash & carries, hypermarkets and supermarkets, 35 percent through traditional trade outlets and 11 percent from our own stores, Agricola Bacau. The international markets cover 12 percent.

What were the results of the restructuring in 2009?

How do you expect this to be reflected in this year’s activity and results?

The Agricola Bacau group of companies restructured its activity at the beginning of 2009 by organizing around business units, each with its own sales force. Each unit is run based on a revenues and expenses budget approved by the group’s management. Also, in January this year, Conagra and Salbac Dry salami firms merged into Salbac SA Bacau, which is our boiled-smoked and salami product division. The results of this restructuring process were reflected in a better management, which allowed us to keep our turnover on this segment and even increase it.

What are your sales objectives this year compared to last year?

We are targeting a 17 percent sales increase this year compared to 2009, with a net margin of 3.5 to 4 percent, given that the market will accept the inevitable price rises. A drive for this increase will be the growth in poultry sales through supermarkets, hypermarkets, cash & carry outlets and discounters, from 42 percent in 2009 to 53 percent this year.

We would also like to focus on the traditional market, which we haven’t in the past due to problems in recovering debt from the market. We are also planning to open new stores in large Romanian cities, adding to the existing 38 units. On the semi-prepared products segment, this year’s objective is to increase our market share from 18 to 23 percent.

How much did exports make up of the total volume of sales and how do you expect this to evolve in 2010? What were the main export destinations last year?

Last year we delivered 197 percent more poultry meat on the external market than in 2009.

Sales volumes outside Romania were 184 percent higher, reaching EUR 4.2 million. The main

export destinations were the Netherlands, France, Spain, Greece, Bulgaria, Hungary, Vietnam and Hong Kong. Exports covered 12 percent of our poultry meat sales, and we expect this indicator to grow to 15 percent.

This takes into account the sales evolution for the first two months of the year, when Agricola Bacau exported around 20 percent of production on important European markets, like Germany, the Netherlands, the UK and Greece.

corina.saceanu@business-review.ro