20 Mio EUR Investment In Ostrov Vineyards

SC Ostrovit SA was privatized in 2000 and became one of the growing numbers of private vineyards in Romania. The company gradually built awareness of several assortments of wine generically branded "Domeniile Ostrov" (The Ostrov Domains). The company owns nearly 2,000 hectares of wine-grade grapevine and two wineries in Ostrov and Lipnita, both located on the right bank of the Danube. A third winery in Baneasa completes the company"s infrastructure.

The company"s portfolio is especially famous for a variety of red wines (Merlot, Cabernet Sauvignon, Pinot Noir) as well as white wines (Sauvignon Blanc, Chardonnay, Pinot Gris) and the Romanian varieties Feteasca Alba, Feteasca Regala and Cramposie.

The Ostrov Vineyard is the best known of the company"s properties and has the highest heliothermal resources, which are, nevertheless, not excessive. Proximity to the Danube and several lakes constitutes a supplemental beneficial climate factor. Mild winters also add to the positive balance of the environmental equation.

Ostrovit SA last year harvested 9,203 tonnes of wine-grade grapes from proprietary vineyards and procured 973 tonnes for third parties to make a total of 71,406 hectolitres of wine. In 2006, the company started an EU-driven vineyard rejuvenation programme under which it has replanted Denomination of Origin Controlled assortments on an area of 1,100 hectares of wine-grade grapevine. The programme will continue until end-2010.

Between 2005 and 2009, Ostrovit SA implemented a major investment programme focused on both vineyard and orchard rejuvenation and the acquisition and commissioning of improved equipment. Additionally, the wineries also received technology upgrades.

Following the successful implementation of four consecutive annual rejuvenation programmes, the company planted, in 2006, 700 hectares of wine-grade grapevine, 100 hectares of table-grade grapevine and 100 hectares of orchards on a total budget of approximately 12 million EUR.

By undertaking a SAPARD programme worth 300,000 EUR (already finalized) and a FEADS programme worth 1.3 million EUR (ongoing), Ostrovit commissioned a drop-by-drop irrigation system on a total surface of 400 hectares. The company also commissioned new and more energy-efficient irrigation pumps worth 1 million EUR for the entire surface of 2,000 hectares. Such programmes also materialized in specific machine tools and winemaking equipment.

The wine cellars of Ostrovit SA have also been overhauled through a SAPARD programme worth 5 million EUR. Ostrovit representative Oana Belu told BURSA that the company was planning to become a strong competitor to the leading winemakers in Romania in the near future and subsequently tap European markets.