Agricola Bacau group, one of Romania's largest poultry producers, has budgeted 10% higher turnover for 2008, up to 120m euros. The target depends, however, on the company's decision on a possible production capacity cutback.
"Grain prices have tripled in the past year, which is putting a lot of pressure on costs. Unless moves are made to change this situation, we may have to cut down production next year," stated Gheorghe Antochi, chairman of the group.
According to Antochi, the rising raw material prices will push up prices for finite products, but he chose not to provide further information on the decisions that a production cutback will trigger.
However, from mid-December, the company halted poultry slaughter and raising, laying off around 700 employees.
The Bacau-based producer is running a 12.5m-euro investment programme, with a Sapard 2.8m-euro co-financing in the 2007-2008 period. The funds are largely aimed at the modernisation of production facilities.
"Originally, the total amount of investments scheduled for this year and for 2008 stood at 12.5m euros, but because of rising prices for equipment and the higher environment protection investments, total investments will revolve around 17-18m euros," said Antochi.
Agricola Bacau has this year invested 1.6m euros in a new incubation station and 4.5m euros to retool and raise the production capacity of the former Carbac department, which was turned into a plant focusing on dry-cured salami, with a production capacity of 1,200 tonnes of finite products.
For 2008, the company plans to finalise an 8.5m-euro investment aimed at the modernisation of the slaughterhouse in Bacau, and a 2m-euro investment for the construction of a pig farm to become operational in 2009.
"We are currently in talks with a Dutch company for the construction of a unit turning animal residu
