French dairy major Lactalis plans to close a factory in Romania acquired through the 2016 acquisition of Covalact.
The site earmarked for closure is located in Miercurea Ciuc, sitting in Harghita County in eastern Transylvania.
Around 95 staff will lose their jobs at the milk processing plant.
Lactalis said it is planning to invest at its four remaining Romania sites in Oiejdea, Sfantu Gheorghe, Campulung Moldovensec and Tunari.
“This new stage in organizing our activity is part of Lactalis Group’s long-term strategy to consolidate investments and develop its businesses in Romania,” Onur Barim, the general manager of Lactalis’ business in Romania, said.
“We have invested over €60m in the last five years in Romania and, for the current year, we have planned investments of over €13m. These investments will allow us to be more competitive on the market and further diversify our product portfolios, for the final benefit of Romanian consumers.”
Access the most comprehensive Company Profiles
on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Company Profile – free
sample
Your download email will arrive shortly
We are confident about the
unique
quality of our Company Profiles. However, we want you to make the most
beneficial
decision for your business, so we offer a free sample that you can download by
submitting the below form
By GlobalData
In 2020, Lactalis announced the closure of two plants in Romania. The sites, located in Floreni and Vatra Dornei, were part of a deal struck in 2008 for the Dorna Lactate company, marking the company’s entry to the country.
Lactalis acquired Covalact from US investment fund SigmaBleyzer, with reports at the time suggesting the deal was inked for around €40m ($42.8m today). Prior to that transaction, the company also snapped up Romanian dairy business Albalact.
Alongside Lactalis’ international brands such as President, Galbani, Leerdammer and Parmalat, the company also markets the LaDorna, Covalact and Bardezzi lines in Romania.
In April, Lactalis announced a plan to shut a yogurt and desserts site in Australia.
The same month, Lactalis revealed its results for 2023, noting a “weak” profit performance as the company faced pressure on volumes from private label.
Headquartered in Laval, Pays-de-la-Loire, Lactalis reported turnover rose 4.3% in 2023 to €29.5bn.
Chairman Emmanuel Besnier said consolidated net profit “remained weak”, coming in at €428m, albeit an increase of 11% from the prior 12 months. Profit stood at €384m in fiscal 2022, down 14% year-on-year.
Lactalis explained that “2023 was marked by a change in consumer purchasing behaviour, reflected in a fall in sales volumes and a specific appetite for private labels – to the detriment of national brands (especially in Europe)”.
However, the company said demand for its products “held up well thanks to their quality and affordable prices”.
