Procter & Gamble sets up its own distribution company

Consumer goods manufacturer Procter & Gamble Romania has set up its own distribution company, P&G Distribution, as part of a programme to make its operations on the Romanian market run more efficiently.

“The establishment of the P&G Distribution is part of an internal reorganisation process intended to help make commodity traffic fluid. The establishment of this company was the result of the increase in the product portfolio after the Wella and Londa brands had been incorporated,” said Ecaterina Safarica, P&G”s external relations manager.

Following the acquisition of Germany”s Wella by Procter & Gamble, Wella”s Romanian branch was integrated into the operations of the US group in Romania last year. Another acquisition, the takeover of Gillette, was made this year, which will boost P&G”s portfolio, following integration of the Gillette brands.

P&G Romania posted turnover of more than 150 million dollars (100 million euros) for the 2003-2004 fiscal year, with an average annual growth rate over the last few years of 15%.

P&G”s products in Romania are distributed by a number of companies, including Interbrands, cash & carry chains and hypermarkets.

“P&G Distribution”s operations will not have any impact on the companies to which it sells its products. The newly created company will allow for better organisation of the way in which P&G operates in Romania,” Safarica explained.

The new company has a share capital of 36,000 RON (360 million ROL), and its majority shareholder is Procter & Gamble International Operations, of which Procter & Gamble Romania is a subsidiary.

“The distribution company is rather small,” Safarica said, though she did not reveal the number of employees at the new company.

Since 1995, when it bought its detergent factory in Timisoara, the company has made more than 35 million dollars in investments. The factory makes detergents and bleaches.

More than 50% of the output of the factory in Timisoara goes to Serbia and Montenegro, Russia, Bulgaria, Bosnia, the Republic of Moldova and Ukraine.

Corporate data show P&G”s products account for more than 45% of the detergent segment (Arial, Tide and Bonux), 45% of the shampoo segment (Pantene, Head & Shoulders), 60% of the sanitary towel segment (Always), and 65% of the disposable nappy segment (Pampers).

Its main competitors are Unilever, Beiersdorf, Colgate-Palmolive and Henkel.