European companies in the natural juice and nectar market are ready to invest in fruit processing facilities in Romania but will first wait for an increase in consumption, currently among the lowest in Europe.
Representatives from the soft drinks industry say the fruit-processing sector is almost “empty” in Romania. In order to produce natural juices and nectars in Romania all existing bottlers – Coca-Cola HBC Romania (Cappy), QAB (Prigat), Parmalat (Santal), European Drinks (Frutti) and La Festa (Tedi and Carotella) – need to import most of their concentrates due to the limited supply on the local market.
However, European companies are starting to show an interest in the Romanian market, with Austrian natural juice producer Pfanner having already considered an investment. Ultimately it did not go ahead with the investment due to the low level of consumption in Romania.
“The owners of Pfanner seriously considered investing in a fruit processing and bottling factory in Romania, but the low consumption does not justify such an investment at the moment. Consumption of natural juices will increase quickly in the next two years and will probably have doubled by 2007,” explained Catalin Tapi, sales manager for Platinum Leaf company, the importer and dealer for Pfanner juices in Romania.
Together, Pfanner and Rauch, another Austrian producer, account for a large share of the natural juice and nectar market in Central and Eastern Europe.
Consumption of natural juices and nectars in Romania comes to about 3 litres per person every year, which is in stark contrast to Germany, where consumption is 37 litres per person. The Romanian market amounted to 24 million euros last year.
The causes for this are consumption habits, which in Romania favour carbonated drinks, and the high customs duties of between 20% and 40%. These duties are set to be reduced gradually, before being dropped completely in 2007.
One of the few companies to invest in fruit and vegetable processing is La Festa Romania, a branch of the Polish Maspex Group. It will complete a 2-3 million euro investment in a fruit and vegetable processing facility in Valenii de Munte next year.
“The fruit and vegetable processing industry is an empty sector in Romania, but I believe it will develop strongly from now on. In Poland and Hungary, this industry is highly developed and competition is strong. We will process fruit and vegetables in Valenii de Munte for our juice factory,” said Cristoph Grabowski, La Festa Romania chairman.