European Drinks set to start production abroad

European Food & Drinks group, owned by brothers Ioan and Viorel Micula, is now visiting countries such as Poland, Bulgaria, Ukraine and Russia to launch foreign production as part of regional expansion plans.
“We will make further investments to support the group’s regional expansion, which envisages distribution in the first phase followed by production,” stated Ioan Micula, chairman of European Food.
At present, the group, whose production facilities are located in Bihor county, distributes its products to around 20 European countries and has partnerships with international retail networks on foreign markets. The partners include Metro, Tesco, Kaufland, Billa, Auchan and Delhaize, according to company data.
On regional markets, European Food & Drinks could start production either through the acquisition of companies, plants or greenfield projects.
“The decision to invest in production abroad depends of course on negotiations with financial institutions that can provide capital for this project,” specified Ioan Micula.
After the company started investments worth around 10m euros to create a new brand image for Izvorul Minunilor mineral water (one of the most important products in European Drinks’ portfolio) the group’s shareholders also announced a change in European Food’s corporate image.
“With the new image of European Food we want to get closer to the standards of European design. We’re investing several hundred thousand euros in this project and intend to promote the new image in 2008,” explained Ioan Micula. “We’re working towards improving brand images, which will also help boost exports. Next year, imports will rise by over 50% against this year,” added Micula. At present, the growth rate for exports is 2-3 times higher than the domestic level registered by the group, but domestic sales still hold the heaviest weight in the group’s turnover.
The group, which includes European Food, European Drinks, Scandic Distilleries and Transilvania General Import-Export, could generate turnover worth above 800m euros this year, from 680m euros in 2006.
Micula brothers opened group subsidiaries in 8 countries in the region. The group, set up in 1993, has expanded through several market segments and via exports.