Tuborg Romania, part of Danish brewer Carlsberg, has completed a $10m investment aimed at boosting the annual production capacity of its Bucharest-based plant from 750,000 hectolitres to 1 million.
The company’s total investment in Romania has thus reached $85 million, and is set to come to $100 million in the near future.
“The plant can reach a production capacity of 1.2 million hectolitres, but we need to invest another $15 million to get to this level. We will thus come to invest 100 million dollars in Romania,” said Isaac Sheps, president of Tuborg Romania.
The Bucharest-based Tuborg plant has been operating since 1998, starting out with an annual production capacity of 500,000 hectolitres.
The company originally had 1% market share back in 1998, but grew to 7% this year. Consequently, as sales surged, the production capacity was first increased to 750,000 hl and then to one million hectolitres.
The increased production at Tuborg Romania (owner of the Carlsberg, Tuborg and Skol brands) occurs during one of the best years for the beer market since 1990. After the plunge recorded in 2001 and 2002 (as compared to 2000), the market has made a spectacular comeback this year.
Should the first-half evolution continue, consumption would increase 10%, to a record-high of 12 million hectolitres.
The market boom boosted the expansion plans of Tuborg and European Drinks (which opened new production units), but failed to change the restructuring plans of other brewers.
For instance, Austrian group Brau Union, the market leader, decided to close down one of its seven Romanian-based plants, quoting the company’s production overcapacity.
Tuborg started building its Bucharest plant in 1997, aiming to get 7 percent of the Romanian market by selling only international brands.
The company may even exceed its target this year, if the first eight months’ growth pace keeps up by the end of December.
“We sold 645,000 hectolitres of beer in the first eight months, up 22% from the year-ago period. We forecast a solid growth pace of the company’s sales and market share by the end of 2003,” said Isaac Sheps, president of Tuborg Romania.
Should the market grow to 12 million hectolitres this year and if Tuborg maintains its 7% market share by yearend, the company will sell 840,000 in 2003.
The ascending trend taken by Tuborg Romania’s sales in the past two years, although the market stagnated (this year’s level may climb back to the 2000 figures), proves that consumers favoured (besides cheap beer) premium and superpremium brands.
On the $550m Romanian beer market, Tuborg Romania competes mainly against international groups Brau Union (32-33% market share), SABMiller (15-16%) and Interbrew (14-15%). laurentiu.ispir@zf.ro