Tnuva eyes top spot on dairy market

Yoram Israeli, the chairman of Tnuva Romania, the newest player on the domestic dairy market, says the decision to invest 55 million euros was made amid extremely low consumption levels.

Israeli wants to turn the Romanian branch of Israel”s biggest food producer into a top player on the fresh dairy products market.

“The Romanian market has a huge potential and there are many things that need to be done here. We are now seeking other investments in the sector of fresh dairy products,” stated Yoram Israeli.

Tnuva Romania made investments standing at 55m euros for the construction of a fresh dairy products plant and a farm in Popesti-Leordeni, close to Bucharest. The company”s representatives are hoping to see annual sales of almost 70 million euros within several years after the start of production. The Tnuva plant will start production early next year. The investment project is 35% financed by the European Bank for Reconstruction and Development.

“The growth and future of the Tnuva business were not in Israel, but outside this state. We sought European markets, and the attention given to East European ones was only natural, considering the fact that they are emerging markets, with a rising level of foreign investments and improving living standards. We”ve come to the conclusion that we can gain a significant market share here,” Israeli also says.

Investments in Romania are thus the first step which the Israeli company, owned by a farmers cooperative, is taking outside Israel.

“We took into consideration European Union integration and we realised that, should we use all resources, the growth potential of the Romanian market is huge,” specified Israeli.

Last year, the yoghurt market rose by 19% in terms of volume and 55% in terms of value, in line with information from the most important players. Tnuva currently controls 45% of Israel”s yoghurt market, being the biggest producer in the food industry, with annual sales standing at 1.2 billion dollars.

In Isareli”s opinion, the biggest hurdle standing in the way of market growth is the milk collection structure in Romania.

“The market is fragmented, most players are small, local companies. There are few multinationals in this domain,” says Israeli. dana.ciriperu@zf.ro