Albalact Alba Iulia Posts 70% Increase In Turnover In 2006

Albalact To Increase Share Capital By Over 10 Mln RON

Alba Iulia-based dairy producer Albalact will increase its share capital by 10.855.253 RON (3.192.721 euros), following the Extraordinary General Meeting of Shareholders held last week. Shareholders in Albalact approved the increase of the company"s share capital from 9.439.350,3 RON to 20.294.603,5 RON by the issuance of 108.552.532 shares, with a face value of 0.1000 RON.

The capital increase is needed, as the company will open this year a new factory - one of the most modern dairy production facilities in Eastern Europe. The investment in the new dairy plant, which complies with EU requirements, amounts to almost 8 million euros. Albalact will also invest in logistics and marketing in order to sustain the development and expansion of partnerships with several distribution channels.

Albalact"s financial results for 2006 exceeded all estimates after the launching of the Zuzu brand, which was created for a wider and more diversified consumer range than the UHT Fulga products. Preliminary data for 2006 indicate a 70% increase in turnover, from 16.826.930 euros in 2005 to 29.088.177 euros in 2006. The same estimates show a 64% increase in profit, from 850.000 euros in 2005 to over 13.000.000 euros in 2006.

In 2006, Albalact made massive investments in marketing and advertising, the cost of brand promotion exceeding 1.300.000 euros last year.

The company"s "Zuzu" brand includes 23 fresh pasteurized dairy products (milk and yogurts). Zuzu brought a novelty on the Romanian market, namely the packaging solution from Tetra Pak called Tetra Top. In 2004, Albalact invested approximately 2 million euros in the Tetra Top installation and other investments were made in fleet, warehouses, farm equipment and maintenance of Albalact"s farm in Vaisei-Huneadoara, from which 8500 litres of milk are collected daily. 70% of the milk Albalact uses in the production process complies with European standards and is safe for consumption.