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Dec 04, 2007 14:36 EEST
December 4 (SeeNews) - Bulgarian brewery Lomsko Pivo, part of local engineering, construction and energy group Enemona, plans to set up a subsidiary in neighbouring Romania early next year to tap the rising market demand, a senior Enemona official said on Tuesday.
"Lomsko Pivo is to set up a subsidiary trading company in Romania to meet demand on the part of smaller distributors there who have difficulties with excise duties payment," Enemona's corporate policy director, Prokopi Prokopiev, told SeeNews. "We will pay their excise duties and then sell directly to them."
Prokopiev added that the company would avail itself of the opportunities provided by Romanian legislation to halve the excise duty payments, which is expected to boost its competitiveness and increase profit.
Lomsko Pivo, which started exports to Romania in April, plans that its exports exceed 30% of the total output in 2008.
"Next year we expect that output will approach 200,000 hectolitres," Prokopiev said. The brewery has a total capacity to produce 240,000 hectolitres.
Next year's exports will be mainly focused on the Romanian market, Prokopiev said, adding that the company is in talks to start sales in other EU markets.
Lomsko Pivo sold 78,700 hectolitres of beer in 2006 and 123,000 hectolitres through November. Its eleven-month output totalled 135,000 tonnes.
The company has already secured more than 70% of the barley it will need for production next year at prices lower than the market ones. This is expected to raise next year's sales and profit, it said in a statement.
Lomsko Pivo boosted its ten-month net profit over 55 times to 1.0 million levs ($751,000/511,000 euro), backed by a 52.5% rise in sales revenue.
"So far, we have significantly exceeded full-year [profit] forecast for 2007, as at the end of the year we will almost near the 2008 forecast figures," Prokopiev said.
The brewery has previously forecast a net profit of 567,000 levs this year awith the figure reaching some 2.6 million levs in 2011.
Lomsko Pivo is majority-owned by Agro Invest Engineering company, in which Enemona has a 99.9% stake. Agro Invest Engineering company held 98.3% of Lomsko Pivo before an initial public offering (IPO) of 20% of its shares on the Bulgarian Stock Exchange (BSE) in July. Enemona said last week it will raise on Thursday Lomsko Pivo's free-float to over 45%. A total of 900,000 shares will be offered at an auction at an issue price of 3.5 levs each.
Enemona, which said earlier this year it would exit the brewery business as part of a plan to focus on its core operations, is currently in talks with an unnamed candidate for selling a 51% stake in the brewery. The sale of the majority stake is due to be completed by the middle of next year, the company said in the statement.
Shares in the company traded at 3.8 levs at 0900 GMT on Tuesday, a 6.2% drop from Monday's close.
(1 euro = 1.95583 Bulgarian levs)
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