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Sep 21, 2007 15:02 EEST
SOFIA (Bulgaria), September 21 (SeeNews) – Bulgarian lavender oil and cosmetics producer Lavena plans to enter several new markets by the end of the year, focusing mainly on lavender oil exports, a senior company official said.
“Our aim this year is to sell this oil in the widest geographical area possible. We are looking to export to Australia, the United States, Germany, Great Britain and the Far East,” Lavena board chairman Constantin Shalamanov told SeeNews in a recent interview.
Shalamanov said the lavender oil segment was of strategic importance for the company’s development, while exports to various geographical regions would allow for hedging the foreign exchange risks.
“Lavender oil is probably the most widespread ethereal oil, which is gaining even bigger popularity with the spa centres industry and the idea of leading a healthy life. Demand is rising on a global scale,” Shalamanov added.
The company expects significant growth in its lavender oil sales this year, while sales of cosmetic products are expected to grow by 10% or 15% from nearly 1.8 million levs ($1.3 million/920,000 euro) for last year.
“We expect that the 2008 sales [of cosmetic products] will be much higher because we have sealed a contract for exports to Russia (…) We expect to export a small amount this year but it is enough for entering this type of market, which is very competitive,” Shalamanov said.
He added Lavena was also researching prospects for exporting its cosmetic products to neighbouring Romania, Serbia and Greece.
However, the company, which posted a net loss of 132,000 levs for the first half of 2007, may end the year in the red, Shalamanov said.
“In the most optimistic case we would break even,” he said.
Shalamanov said Lavena last year exported about 95% of the three tonnes of lavender oil it produced, mainly to France. The company has so far this year produced 11 tonnes of lavender oil.
Bulgaria produces some 20 to 30 tonnes of lavender oil per year, according to expert estimates, he added.
Lavena expects the price of lavender oil to rise by 30% this year from the 25 euro ($35.1 million) per kilogramme for 2006 due to the weaker crop in the region because of unfavourable weather conditions, Shalamanov said.
This year's crop in southeast Europe will be significantly reduced due to the unseasonably dry and hot weather in July when for two weeks temperatures exceeded 40 degrees Celsius.
“The amount of lavender oil produced [by Lavena] this year is four times larger than last year but what part of it will be reflected in this year’s financial statement is not known yet. It can be sold until February or March, and the later it is sold, the higher the price is,” Shalamanov said.
“We are not in a hurry to sell... We would rather wait to receive better revenue,” he added.
Lavena is considering launching new cosmetics products but no particular plans have been made yet, Shalamanov said, adding lavender oil output capacity could also easily be raised if demand for the product increases.
The company may finance the investments through a bond issue, but neither the sum of the planned investments nor the value of the possible bond issue are defined yet, he added.
“If there is external financing, it would most probably be by issuing bonds, because it will be cheaper than bank financing, but if that is not enough (…) we will also raise our capital,” Shalamanov said.
Lavena (www.lavena.hit.bg), which is based in Shumen in northern Bulgaria, was set up in 1972 as a unit of rose oil producer Balgarska Roza Karlovo. The company is listed on the Bulgarian Stock Exchange.
($ = 0.7119 euro)
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