Madalin Simion, brand manager of Biborteni, said: “Mineral water bottlers can be hurt by the problems of distributors and of traditional stores that are short of cash for orders or, worse, have defaulted due to the frozen lines of credit.”
The global financial meltdown has led to the bankruptcy of small distributors that have been unable to control cash flow. The number of insolvent distributors has risen dramatically in recent months, according to market data from Romania. Industry observers predict that cash pressures could drive more water bottlers in eastern Europe out of business in 2009.
“Large companies are not protected against such problems, but on the contrary, large players also have large bank debts,” the manager adds.
At the end of 2008, Biborteni announced it had to put a €7m investment for its Covasna plant on hold as it couldn’t get financing. The project was due to be finalised by 2009 and was meant to double the company’s water production capacity, now standing at 80 million litres a year. The producer also saw sales slow down in the second half of 2008 amid the deteriorating economic climate. The company posted a turnover of €12m in 2008.
The company expects to have achieved growth of 10% in 2008 compared with the previous year. “I don’t know if we can speak of sales increases this year. At best, there will be positive dynamics on certain segments,” added the Biborteni spokesperson. The company plans to launch new products this year, too, in a bid to add new categories to its portfolio.
Biborteni is controlled by some of the shareholders of wine producer Murfatlar and of Salonta, which currently employs about 230 people. Biborteni’s biggest rivals are Romanian mineral water producers Romaqua, Coca-Cola HBC Romania, Bucovina, Perla Harghitei and Apemin Tusnad.
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