THE MOLDOVANS BREAK THE SILENCE Solomiţchi: "We want Prodlacta to become a market leader in three years"

• JLC wants to bring the dairy factory of Braşov to peak capacity and to complete the portfolio with new products

The JLC of the Republic of Moldova is very close to gaining control of Prodlacta dairy maker of Braşov, after the plan for the reorganization of the dairy maker proposed by the three companies in the group was accepted by creditors.

Oleg Solomiţchi, the representative of JLC in Romania, said that the intentions of his group are quite clear. "We want to invest in Prodlacta. We have demonstrated our commitment by having already invested nearly four million Euros. We want Prodlacta to become one of the leaders of the dairy market in Romania in the next three years", the quoted source said. One of the first steps which the company will make after JLC takes control will be to build a direct distribution system on a national level, starting with Braşov and Bucharest, which will then be extended to the entire country. "This will mean warehouses all over the country, our own sales force with all that entails. We feel that the fact that the Prodlacta brand comes from Braşov provides remarkable advertising opportunities, which we will fully use", the quoted source also said.

The Moldovans have made it their goal to bring production back to the maximum level of the last few years, which will mean hiring back the staff which was laid off over the last few years. In 2007, prior to the crisis, Prodlacta had an average number of 468 employees, whereas at the end of last year, its number fell to 164, a number which is now half of that, according to information from inside the company.

"We will continue the program to invest in the plant in order to add new products to the portfolio. Some of these products exist on the market, but Prodlacta does not have them in its portfolio, others are produced by JLC in other countries, but they don't exist on the local market. We will develop the ice-cream market which hasn't been developed by Prodlacta over the last few years", Solomiţchi also said.

• They tried to take over the company two years ago

The interest of the group from the Republic of Moldova in Prodlacta is nothing new. Two years ago, JLC tried to take over control, and had negotiations with the representative of the majority shareholder- the Employee Association- Mariana Eftimie.

"We had agreed on a price for the block of shares, and Mrs. Eftimie was offered a position in the management of the company. But at the last minute, Mrs. Eftimie refused to sign the contracts which had been prepared by the lawyers of both sides. Apparently, the same thing happened with many companies (between 6 and 8 of them) interested in buying Prodlacta between 2004 and 2011, according to information from the press and the market", Solomiţchi also said. Over the last few years, international companies such as Tnuva, Lactalis, Muller and others expressed interest in the dairy maker of Braşov.

• The disagreements between the shareholders - the cause of the insolvency

Solomiţchi considers that Prodlacta has reached insolvency due to the disagreements between the two important shareholders of the company - the Employee Association and the Olympus group. "Over the last 3-4 years, we have seen a struggle between them. Thus, in 2009, in order to increase the current assets, in the General Shareholder Meeting it was decided to sell some assets outside exploitation , a decision which was challenged by Olympus in court and subsequently annulled. In 2010 and 2011, Olympus proposed share capital increases to solve Prodlacta's financial problems, but these proposals were blocked in the General Shareholder Meeting by the ASMC", the representative of JLC in Romania said. "It is surprising that the two shareholders have agreed to supporting a common plan for helping the company recover after so many years of infighting", the quoted source also said.

Solomiţchi is certain that the reorganization plan proposed by JLC will be confirmed by the bankruptcy judge, after it was "supported by all the four categories of receivables, whereas the plan proposed by the debtors was rejected by three categories of receivables and was approved by the employees through legal assumption".

"We were surprised by the support and the confidence which was granted to us by the creditors who supported our plan. These include farmers, packaging makers, transport and construction companies, construction, retailers and even competitors in the dairy industry. I don't see why the plan of JLC would not be confirmed because it clearly represents the will of the creditors".

• "What are Olympus' intentions?"

When discussing the intentions of the Greeks of Olympus, Solomiţchi said that he doesn't understand why they waited so long to attempt a takeover. "One year ago, Olympus commissioned a new, high capacity modern plant, near Braşov. According to market information, it is currently far from being used at its full capacity. Why would they need another plant? Olympus has been present in Braşov for a long time. They were close when the insolvency procedure began. Why didn't pay off the company's debts and waited for us to do it?", Solomiţchi concluded.