Agricola blames bird flu and floods

The biggest chicken producer on the domestic market has said it will reconsider the 20m-euro investment plan announced for 2006.

“We are reconsidering the investment plan announced for this year, since 2005 was a very bad year for us. We must recalculate the investment budgets and subsequently reorganise our entire business,” says Gheorghe Antochi, general manager of Agricola Bacau.

In the first half of last year, the company was hurt by the floods in Moldova and, in the last quarter, by the emergence of bird flu in Romania.

The company, Romania”s biggest chicken exporter, in early October halted all deliveries to foreign partners, which led to mounting stocks and triggered financial losses.

The company used to export about 10% of its annual chicken production.

Antochi would not disclose the total value of the losses logged in 2005, but said Agricola managed to end 2005 with higher turnover than in 2004 and with no losses.

“We registered some turnover increase, but it was insignificant. We exceeded 300 million RON (82m euros), due to the sales posted in the first three quarters of 2005. These sales largely helped us to post some positive results and offset the problems we faced during the second half of the year,” Antochi also said.

The company”s general manager had originally forecast turnover worth 335 million RON (94 million euros) for last year, up more than 10% on 2004.

However, the forecasts had been drafted in mid-2005, when the company”s sales had surged by 10%.

“Bird flu pushed chicken sales down, particularly after the first official announcements,” Antochi specified.

According to the Agricola official, the significant chicken imports from countries ignoring sanitary-veterinary norms also trigger mounting stocks for domestic producers.

In mid last year, Agricola Bacau said it would launch a 20m-euro investment programme this year, aimed to restructure the pork division. Following last year”s problems, however, the group will reconsider this investment programme.

The company has so far invested more than 53 million dollars (44 million euros), with funds secured from banking loans and from the reinvestment of the entire derived profit.

Last year, Agricola entered the fast-food market, launching the Conagra plant, specialised in meat products manufacturing and Europrod, a unit producing frozen chicken and vegetal products.

The value of investments stood at 4.3 million euros.

In early June 2005, the management of Agricola International said it intended to reunite all the firms of the group under a single name.

dana.ciriperu@zf.ro