Turkey to invest in Romanian chicken industry

Turkish chicken processor Banvit wants to invest $40 million in a greenfield-type production facility in Urziceni.

The investment comes amid problems on the domestic chicken market, shaken by a series of bankruptcies last year that peaked with the current hardships being faced by the second biggest Romanian producer in the industry, Tec Miaco, ($37 million sales in 2003). The Romanian Investment Fund (RIF) and Romanian American Enterprise Fund (RAEF) backed out of the Tec Miaco venture and the company is now negotiating with several investors for a direct investment or possibly a sale.

Banvit submitted a $40 million project to the Board of the International Finance Corporation (IFC), the World Bank’s investment arm, to which this institution is to contribute $15 million. Banvit previously secured IFC funding for a $25 million project in recent years, which it used to expand and upgrade its production facilities in Turkey.

The Urziceni investment will comprise poultry farms, automated poultry feeding lines and a processing factory with a capacity reaching 40,000 tonnes of chicken/year, which will turn the Turkish company into the leading producer in Romania. Agricola International and Tec Miaco, the top two Romanian producers registered about 40,000 tonnes in output last year. The Banvit project also comprises a sales centre and a cold storage space in Bucharest and will employ 210 people upon completion.

“Any investment is most welcome, because we’re fed up with importing chicken legs from overseas,” says Ilie Van, chairman of the Union of Poultry Farmers in Romania (UCPR). He added the location chosen by Banvit for its new production facility is particularly well suited. Banvit plans to buy both cereals and chickens for its farm from the farmers in the area.

What is interesting is that a few months ago an IFC delegation visited several major Romanian chicken producers, scouting for possible investments.

The problems experienced by chicken farmers were brought about by the doubling in cereal prices worldwide. Furthermore, the industry also has to deal with massive chicken leg imports from the US and Brazil, which accounted for 80% of the total imports of chicken in Romania last year, some 90,500 tonnes. The IFC is experienced in providing backing for the chicken farming industry, as it has made large investments in Ukraine, Russia and Turkey recently.

Banvit has been researching the Romanian market for several years now and last year announced plans to invest $20 million in a production and distribution network on the Romanian market, though it hasn’t provided further details since.

Banvit is Turkey’s largest chicken producer. It was established in 1968 and went public in 1992 when it listed 15% of its shares on the Bourse in Istanbul.
stelian.negrea@zf.ro