Topway: vinegar goes with margarine

Now that it has sold its margarine, ketchup and mayonnaise division, Topway Industries uses the money to consolidate its position on the edible oil market and go into vinegar.
Part of the money collected by the shareholders (the largest of which is Baring investment fund), following last year’s sale of a “slice” of Topway company to the Norwegians at Orkla Foods, was used to establish a vinegar factory, which produces two brands, Bunica and La Minut.
The investment in this factory is worth more than one million dollars.
“We invested in vinegar, because of the opportunities on the market,” Topway Industries CEO Leonard Gherghina explained.
He believes the opportunity resides in the fact that the other players on the domestic market make vinegar out of alcohol instead of wine.
“The point here is to make vinegar out of wine, which people could use for salads, instead of alcohol. This is how we are planning to compete with the imports on the market, by having an acceptable brand,” the Topway CEO added.
Topway’s archrival on the domestic market is Regal, a brand in European Food’s portfolio. European Food is one of the companies in the European Drinks Group held by the Micula Brothers (Ioan and Viorel). To counteract this offer, the company also makes vinegar out of alcohol, under the La Minut brand.
“We’re going on the retail market, as we have a very powerful brand there. Bunica (Grandma’s) is a wine-derived vinegar pending listing (that is reaching retailers’ shelves) everywhere. We have chosen the quality argument, even though the market is seasonal,” Gherghina said.
He added it was hard to tell how much this market was worth, as the market research companies had not covered it yet.
Besides investing in this factory, the company has also established a special fats factory. Such fats are used for producing consumer and industrial margarine, for the bread, biscuits and chocolate industry (as cocoa butter replacement). The company has invested in a processing technology for oleaginous seeds, as well. Gherghina did not care to provide details as to the exact amount of those investments, though.
Orkla Foods Romania last spring took over the margarine, ketchup and mayonnaise division of Topway Craiova, which kept the edible oil, but did not break its business in two. Subsequently, the two divisions, even though they have different owners, share a common management and a brand (Bunica).
Leonard Gherghina is the general manager of the Baring Private Equity Partners Limited investment fund, which holds about 40% of Topway. He also runs Orkla Foods Romania’s business, which controls the margarine division.
“Our Norwegian partners are confident in the Romanian management, so that they are not planning to come here to run the business. They do run this business, though, but they do it electronically, which is good. This is probably the way to go, after all,” Leonard Gherghina added.