Nestle Romania targets European profitability

Nestle this year targets the integration of the group’s pet food unit into its domestic division, Nestle Romania. Until now, products had been imported and distributed on the domestic market.
Through this move, the Swiss group hopes to take on rival Mars, leader of the Romanian pet food market (estimated at over 40m euros).
Paul Nuber, general manager of Nestle Romania, says that one objective is to develop the distribution of pet food products, whilst the company will also consider partnerships to boost the number of distributors.
At present, the domestic distributor of Nestle Purina Petcare is Interbrands Marketing & Distribution, and last year the unit accounted for around 6% of Nestle’s sales in Romania, approximately 9m euros, in line with data provided by Nuber.
The general manager will not rule out the possibility of starting pet food production in Romania.
“I am confident the unit will gain rising importance in Nestle’s Romanian portfolio. In the next 2-3 years, this will be among the top 3 product categories in terms of sales growth,” stated Nuber.
At present, the pet food unit is the smallest unit of the domestic company in terms of sales.
Nuber expects to register double-digit sale growth across all product categories this year. Last year, Nestle reported turnover worth approximately 150m euros on the Romanian market, up 30% on 2006. In the same statement, Paul Nuber specified that targets for income were also overshot last year.
In 2006, the company reported an around 2% growth rate for net income, below the domestic market’s average, after it turned into the black in 2005.
“We are still a long way off the European average level of profitability. This year, we also have quite aggressive targets in terms of profitability growth,” added Nuber, who did not provide any further details.

Nestle Romania
Has around 750 employees, over 300 working in the production unit in Timisoara
Started activities in Romania in 1995, and in 2001 acquired the Joe wafer plant in Timisoara
Reported turnover worth around 150m euros in 2007, up 30% on 2006
Plans to integrate the pet food unit this year