Will Romania host Elite's new plant?

Coffee company Elite International is planning to build a plant in Eastern Europe, with Romania among the possible locations. Eli Rachmut, general manager of the Romanian-based subsidiary, has just been appointed to run the company’s business in Croatia and Bulgaria and provide consulting for the Serb branch. Rachmut is rooting for the new plant to be built in Romania, but says everything is up to the support Elite International will receive from the Romanian Government for solving the problems affecting the coffee industry. However, Rachmut did not disclose the investment’s value.

“We have the opportunity to double or even triple production and to export products to the entire Balkans area,” Rachmut told Ziarul Financiar. “But I am powerless, as we have received no help from Government officials so far. They must understand that, if we make coffee here and export it abroad, then we are bringing money to Romania.”

Coffee producers operating on the Romanian market are complaining about excises and taxes. For one tonne of coffee acquired from the international markets, the producer pays more than 1,700 euros, as variable excises add to the original price, depending on the type of coffee. For green coffee, excises range between 800-5,000 euros per tonne, revolving around 1,250 euros for ground roasted coffee and 5,000 euros per tonne for instant coffee.

Given the high excises, the market of packaged coffee has posted a dramatic slump in the past few years, culminating in last year’s 20% plunge. And the decline continued at the beginning of 2003, when the market lost another three percent.

According to Rachmut, the consumption of bulk coffee is “stabilising.” “It is not decreasing yet, but, at least, growth has stopped,” he mentioned. To counter the increasing sales of bulk coffee, the biggest companies have even ordered a TV ad, singing the praises of pre-packaged coffee. The advertisement was, however, pulled by the National Audio-Visual Board.
claudia.covaci@zf.ro