European Report: International petfood partnership in Romania
Petfood manufacturers with investors from different countries are quite rare in Europe
Petfood manufacturers with investors from different countries are quite rare in Europe. However, there is an example in Romania that is even more unusual because it can also claim to have had the backing of a European government.
"Our company was established about four years ago in a project that was led by a group of Dutch investors," reported Constantin Toporiste, director of Bucharest-based Nordic Petfood Group, when in Brussels recently to attend Kemin's latest European petfoods symposium. "Today, 51% of the shares are held by Romanians and 49% by Dutch.
"We had also received Dutch government support. The Romanian input was to build the factory on a green field site, while the Dutch helped us on the equipment side," Toporiste continued. "The grinders we use, for example, came from Ottevanger.
"The equipment for extruding and drying was bought secondhand in the Netherlands to be refurbished and installed in our new building. The rest of the line (dosing, milling and mixing, packaging) is brand new, and more than 75% of the units were manufactured in Romania," he added.
"We enlisted the help of Professor Mian Riaz of Texas A&M University in the United States to spend two days at the factory and explain to us how we could improve our extrusion process. The improvement we wanted to make was in quality, not in capacity. Our total focus is to supply a premium dry product."
The total investment in the project was around 4.5 million Euros, Toporiste continues, and was devised to make Nordic a local producer that could compete with the big multinational corporations for a share of the Romanian market. This market is developing very quickly, as more of the country's population is buying ready-made petfood products for their dogs and cats. Unofficial estimates put its size at around 35,000 metric tons per year for complete dry diets and therefore suggest it is starting to be large enough to justify the entry of a Romanian manufacturer challenging the imported brands.
Despite its name, Nordic has no Scandinavian connection. Toporiste reveals the name was chosen simply because the headquarters would be situated in a building at a location where one of its shareholders had been born, near Bucharest's north railway station. The newly formed company has since become both a producer the biggest under local ownership and a wholesale distributor of high-quality petfoods to small shops and supermarkets throughout Romania.
Today, all industries in Romania are preparing as the country enters the European Union as a full member effective this month. Among other effects, petfood and animal feed interests must organize themselves to meet the EU's directive on good manufacturing practices (GMP). For the Nordic factory that has meant working with its Dutch partners on understanding and implementing HACCP and GMP systems before membership in the European Union arrives.
Belonging to the expanded EU of 27 countries could additionally give the company some exporting opportunities for its premium products. "It is something that we look at very closely," Toporiste comments. "However, I think for the moment we will concentrate on increasing our share of the home market. Our sales in Romania have already exceeded the targets we set ourselves at the start, but there is always work to be done to expand the business even further. Customers in Romania are not really interested if the product is of Romanian origin or comes from abroad. They are far more concerned about quality and price. Fortunately, we can compete with the international brands in both respects."