The emerging markets in CE, SE and Eastern Europe include Romania, Poland, Hungary, Turkey, Serbia.

The emerging markets in CE, SE and Eastern Europe include Romania, Poland, Hungary, Turkey, Serbia.
The emerging markets in CE, SE and Eastern Europe include Romania, Poland, Hungary, Turkey, Serbia, Lithuania.

Friday, 26 January 2018

M&A Opportunities in the Meat Processing Sector in Romania



How to enter the Romanian meat processing sector? How to acquire a local meat processor and producer of quality meat products? As one of the pioneer privately owned market entry and M&A advisory firms in Romania, operating for over 15 years in this market, FRD Center has high competencies in buy-side advisory and is quite well placed to assist foreign buyers with their Deal Origination and Acquisition Target Search in Romania and the region. FRD Center has been assisting foreign investors with their acquisition target origination in Romania and has operated under several buy-side mandates. 
 
Romania is the most dynamic economy in the EU, with highest GDP growth in
Europe of 8.8% in Q3 2017 and a 7% GDP growth in the first none months of 2017.

The Meat Processing Sector in Romania is one of the most dynamic sectors for a variety of reasons, including:
- local market demand for meat and meat products
- availability of finance for investments and development, including non-reimbursable grants from EU funds
- increasing preference of the local consumers for the traditional recipes

The output of Romanian meat processing sector is estimated at over 1.2 bnEUR. Over 90% of the urban population in Romania eats meat on a daily basis.

At the end of 2016, the Romanian meat processing sector output reached more than 345 thousand tonnes, which according to the FRD Center analysis was 6% higher than in 2015. In the first five months of 2017, this registered over 134 thousand tonnes, 3% more than in the same period of 2016.

According to the FRD Center analysis based on MADR data, in 2016, the production of local raw-dry Romanian speciality salami called "Sibiu salami" was 69% superior to 2015, while the production of liver sausages and similar products and food preparations based thereon has registered a 20% growth.
Due to local market demand for such types of products, the output of local raw-dry Romanian speciality salami called "Sibiu salami" as well as of liver sausages and similar products and food preparations based thereon has been constantly growing in the recent years.

Similarly, the production of sausages, dried sausages and similar meat products as well as of other sausages, salami, baloney, polish sausages and other home-made style specialities have been steadily growing in the recent years. The trend is expected to continue in 2018-2020.

The companies operating in the Romanian food and beverages industry, with production activities in Romania, registered a turnover of 12.2 bnEUR in 2016, up 3% from 2015, according to Trade Registry data.

According to the FRD Center analysis based on official data, the cumulated turnover of the strongest twenty meat processing firms in Romania was 6.3% higher in 2016 compared to 2015, reaching over 1.4 bnEUR. 

The Romanian Meat Processing sector is quite fragmented, counting over 120 players in 2017. Most of the meat processors in Romania are registering increasing turnovers in the recent years.

Here is an analysis of the turnover dynamics of the largest ten players done by FRD Center based on the official data:
For 2017, majority of meat processors in Romania estimate a growth of 8-10% of their business. Considering the market dynamics, the growing trend is expected to continue in 2018-2020.

Carniprod, one of the largest local meat processors, estimates a higher turnover of at least 10% in 2017 compared to 2016, reaching almost 19 mEUR.

Meda Prod 98 sausage maker is in the process of implementing an investment of three mEUR to build a raw-dry cold cuts production line. Meda's businesses climbed 10% in 2017, confirming the market's demand for such meat products.

Meat cold cuts producer Ana si Cornel owned by local entrepreneurs expects to see its revenue up about 8% in 2017, to 37.7 mEUR. 

On this fragmented market, several consolidations have been noticed recently. Some of them are:

Angst Group, controlled by local entrepreneurs, has completed the takeover of the majority shares (88%) of the raw-dry cold cuts plant Salsi Sinaia - the oldest meat processor making the famous Salam of Sibiu in Romania for more than 100 years. The Angst Group now comprises three productive units: Angst Ro, Angst and Salsi Sinaia.
Carmistin AgriFood Group, specializing in meat production, processing and marketing, took over Avi Instant, the former Avicola Târgu Jiu, in a transaction of 4.4 mEUR.
Cris-Tim, one of the largest meat processors in Romania, completed the acquisition of Diavist Product, a local family-owned meat processing business.
The Romanian Meat Processing sector has been attracting the interest of international buyers for a few years. Crossborder M&A deals in the in Romania in 2017 include:

Smithfield, part of WH Group (China), acquired local meat processors Elit and Vericom.

Mexican company Sigma Alimentos has acquired 51% of the shares of Caroli Foods Group, one of the main packaged meats producers in Romania.

Are you interested to acquire a local meat processing firm in Romania or in Eastern Europe? Perhaps we could collaborate.

Since 2000, FRD Center offers market research and M&A consulting services to foreign buyers and investment funds interested to enter Romania and the emerging markets in Europe as investors or joint-ventures.

More details about our Deal Origination services are available at: http://market-entry-romania.blogspot.ro/2017/02/deal-origination-in-romania-and-region.html

For tailor-made market research, deal origination, B2B matchmaking with players in the Emerging Markets in Europe, for M&A assistance and target origination feel free to contact the FRD Center team at: email: europa@frdcenter.ro or tel: +4021 411 1459/60/61

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