ECONOMY

Chipita dominant in Bulgaria

Food and snack company Chipita International will dominate Bulgaria’s bakery products market with the acquisition of Royal Foods Holding. Subsidiary Chipita East Europe Ltd has signed a preliminary agreement with Royal Foods Holding and a final contract is expected to be signed in May. Royal Foods is the second-largest producer and distributor of packaged bakery products in Bulgaria behind Chipita Bulgaria. It mostly produces different types of cakes – Swiss rolls, layer cakes, cake-bars – and also operates food stands in sports venues. It has an 85 percent share of the Bulgarian cake market but also exports half of its production to other Eastern European countries, mainly Romania, Hungary and the former Yugoslavia. Chipita East Europe Ltd is already active in these countries and in Russia, either as a producer or a trader. Royal Foods had a turnover of 13.5 million euros in 2003. With this acquisition, Chipita Bulgaria will boost its annual production capacity to over 45,000 tons and its sales will exceed 50 million euros, the parent company said in a statement, adding that it believes the sector has great prospects of expansion in Eastern Europe. Chipita International’s consolidated sales rose to 1.7 percent to 202.6 million euros in 2003, from 199.2 million in 2002. Pretax profits rose to 16.1 million euros in 2003 from 13.4 million in 2002, a 20 percent rise. Greece is the biggest investor in Bulgaria, with over 4,000 subsidiaries active. Its share in Bulgaria’s business will increase further if Public Power Corporation (PPC) wins a bid to acquire a 67 percent stake in the country’s seven state-controlled electricity distribution firms.