Unirea Iasi sees 40% decline

Vegetable oil producer Unirea Iasi, which is owned by US giant Bunge, saw its turnover decline steeply in the first quarter of the year to 9.8 million euros (374 billion ROL), from 16.2 million euros (660 billion ROL) in the corresponding period of last year.

The company also turned in gross losses for the same period of more than 125,000 euros (4.8 billion ROL) after reporting first-quarter gross profits of over 180,000 euros (7.3 billion ROL) in 2003.

According to Robert Arsene, Bunge Romania”s country manager, Bunge sold less overall, but some of the company”s brands saw their performances improve nonetheless.

“In terms of company sales, Bunge saw a slight decline compared with the same period last year, however the main brands, Floriol and Unisol, performed better than last year. Overall, the lower sales volumes witnessed by Bunge were caused by the decline in oil consumption for the first quarter of this year compared with the first quarter of 2004.”

The fall in sales, says Arsene, came as a result of the strong local currency. “Financially, the growth of ROL against the dollar hindered traditional exports of Romanian oil, which account for around 30% of the total domestic production, and negatively influenced the balance between supply and demand, eventually leading to overproduction. Due to this trend, there was a steep reduction of retail prices this year for all processors and bottlers in the industry.”

He went on to explain that that there had been a market slump compared with the first quarter of 2004. “The lower prices for bottled oil – to the extent that this is fairly reflected by the retail sector – are good for the final customer, but will be extremely harmful to the industry, hitting all players equally.”

Bunge Romania, which also owns the oil plants of Interoil Oradea and Muntenia Bucharest, turned over 90 million dollars (72.5 million euros) in 2004, nearly 40% higher year-on-year. The company”s brands – Unisol, Floriol, Muntenia, Horea, Raza Soarelui – enjoyed a market share last year of 40%.