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Biscuit maker targets EU market via Romania

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Related links Romania homepage Agribusiness homepage Eurex Alimentare S.R.L. [Project Summary Document] Turkish delight: $13.15m for food deals [Press Release]

High standards apply, right down to the perfect biscuit size.

Eurex buys ingredients for its biscuit dough from local suppliers.

When Turkey’s Ulker Group wanted to expand into south-east Europe, Romania was clearly the place to be. The Anatolian food giant’s new plant in Romania, which is soon to join the European Union, will support its strategy of gaining easier access to new markets. It’s also providing jobs for hundreds of people living south of Bucharest.

The gleaming white building that is Eurex Alimentare stands out as a beacon of excellence in an industrial park which, for the most part, houses dilapidated buildings with smashed windows and crumbling facades.

Inside the new 20,000 square metre biscuit factory in Popesti Leordeni, a small town nine kilometres south of Bucharest, production lines annually churn out 12,000 tonnes of Biskrem, Petit Beurre, Tempo, and Clip - some of Romania’s best know biscuits, sweets and other treats.

Nicola Anca, one of the company’s first Romanian employees, remembers how rumours circulating in her neighbourhood first fuelled her interest in the factory.

“I had heard the gossip that a new factory was opening locally, so I decided to investigate to see if there was any truth in it,” says the 38-year-old, who at the time was in search of employment.

Local production

Today she operates a production line, making many of the country’s popular biscuit brands.

She is also one of more than 200 people from nearby towns and villages to gain employment through the expansion strategy set out by Ulker, the parent company of Eurex Alimentare. Ulker decided to switch from exporting its products to Romania to producing them within the country.

“When Ulker Group wanted to get a foothold in south-east Europe, there was only one real contending country,” says Ender Bolat, General Manager at the new factory which began operating at full capacity in early 2006. The best place was Romania.

“In Romania we already had a good business going, with a strong turnover, plus a large consumer population of around 22 million people. And the country has good momentum for the time being. It is developing very fast, growth is consistent, and the country has an excellent workforce.”

Selling into the EU

An important decision in Ulker’s strategy was Romania’s planned accession to the European Union, expected in 2007 or 2008. 

As well as capturing a large share of the Romanian market, the company plans to use its Bucharest operation as the springboard for expanding sales into Germany, Hungary, the Czech and Slovak Republics, Moldova, the Baltic States, Bulgaria, Albania and ex-Yugoslav countries.

“Ulker wanted to take advantage of Romania being part of the EU, which will bring access to a very large market. It is much more convenient to export to, for example, Germany from Romania than it is from Turkey,” says Mr Bolat.

The new factory was funded in part by an $8.9 million loan from the European Bank for Reconstruction and Development, one of the largest investors in central and eastern Europe.

Bringing best practice

Eurex Alimentare is an excellent example of the type of company the Bank supports, says Paul Pehr, an EBRD banker. “Ulker’s expansion to Romania is important not only for creating jobs, and boosting the local economy, but as a global food giant the company is bringing with it best industry practice, and raising competition and standards within the sector.”

Eurex Alimentare also draws its raw materials from local suppliers. Competition between suppliers is intense, even though they have to work hard to meet Ulker’s standards which are second to none. Coming up with a short-list of potential flour suppliers in Romania took 8-10 months. A selection of flours from several local suppliers was tested in Turkey to identify the best. “The quality of flour produced locally was good, but not good enough,” says Dana Dumitru, in charge of quality control at Eurex Alimentare. “But the suppliers adjusted, and they were keen and willing to adapt.”

Eurex Alimentare’s expansion plans do not stop in Popesti Leordeni. As retail sales grow, and markets expand, so will production and the company will open more warehouses throughout the country through which its products will be distributed.

When Mr Bolat reflects on the beginnings of the plant, he is astounded at the pace at which it grew. “It was hard to keep count in the early days. We started off with just seven employees, and when we started we were growing at such a fast rate. I was pretty certain numbers will be different again in a few weeks, and they were.”

Mr Bolat can probably relate more to Eurex Alimentare than most. Like the factory, he was born in Romania, of Turkish origins. “This is a dream job, and most likely it is the best fit for me,” says the general manager staring out the window of his 2nd floor office, no doubt pondering about the challenges and opportunities that lie ahead.

Written by Jazz Singh, an EBRD Press Officer.

Contact:

EBRD Romania Office

11 May 2006