Faced with massive losses, of over 22 million euros in 2009 - bigger than its turnover, dairy producer Tnuva Romania has outsourced the department in charge of arranging products of shelves, and is leaving distribution in the hands of local companies. This entailed letting around 70 employees go and cutting costs by 40% in the first half of this year, i.e. by 4 million euros.
"Amid a diminished purchasing power, consumers bought less products in the first half of this year. We are hoping to preserve the first-half results until the end of the year," said Shmulik Porre, president and CEO of Tnuva România, a company with 280 employees and 21.2 million euros in turnover in 2009, which fell by 15% in the first half of this year.
The subsidiary of the Israeli producer will record around 58 million RON (14 million euros) in losses in 2010, according to ZF calculations, compared with the over 20 million-euro losses recorded by Tnuva last year, following significant investments in production and promotion since the producer entered the Romanian market, which have yet to be recouped. In addition, the producer has recently tapped into a new product segment - the cheese segment - and announces a rise of at least 30% in promotional investments next year.
Faced with massive losses, of over 22 million euros in 2009 - bigger than its turnover, dairy producer Tnuva Romania has outsourced the department in charge of arranging products of shelves, and is leaving distribution in the hands of local companies. This entailed letting around 70 employees go and cutting costs by 40% in the first half of this year, i.e. by 4 million euros.
"Amid a diminished purchasing power, consumers bought less products in the first half of this year. We are hoping to preserve the first-half results until the end of the year," said Shmulik Porre, president and CEO
