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Oct 22, 2007 15:17 EEST
October 22 (SeeNews) - German conglomerate Henkel plans to invest at least 100 million euro ($142.7 million) in two years in strengthening its performance and further expanding in the region of southeast Europe (SEE) where it expects its turnover to reach 270 million euro next year, a senior company official said.
Henkel plans investments in new facilities for the production of adhesives, cosmetics and detergents – the three main types of products the company manufactures -mainly in the European Union newcomers Bulgaria and Romania and in Serbia, as well as in exports to smaller countries in the region, Henkel corporate senior vice president Peter Ruiner told SeeNews in a recent interview.
“Our total investment in that [SEE] region was more than 100 million euro this year and we will proceed like that. In two years, we plan to invest at least 100 million euro in these three [production] areas - in plants, in the total structure, the people, in marketing and advertising,” Ruiner said.
The company entered the SEE markets 10 years ago. It has six production facilities – one in Bulgaria, two in Serbia, two in Romania and one in Slovenia.
“For the next five years, the strategy would be to invest primarily in these three countries – Romania, Bulgaria and Serbia. We will export to Albania, we will export to Macedonia, even export from here to Greece but for the small countries we don’t plant to build new plants,” Ruiner said.
“In all three areas we will make about 270 million euro [in turnover] next year in this region,” Ruiner said, adding that this would be a 20% increase on this year's forecast figure.
Earlier this month, the multinational company opened its first Bulgarian plant, for construction materials, which cost over 16 million levs ($11.6 million/8.2 million euro).
The plant, whose construction was completed within a year, has a designed annual capacity of 150,000 tonnes of building materials. Half of that capacity is expected to be reached in 2008, while full capacity is targeted in the third year of operations. It is built on a total area of 32,000 square metres and is located near the capital Sofia. It will initially manufacture adhesives and construction materials, most of which will be sold on the local market.
Henkel is already prepared to expand the plant, Ruiner said, adding that it will start producing liquid chemical products and the initial investment will be two million euro.
“Let’s see how the business will develop in the next two to three years. If we fill this 150,000 tonnes then will decide for a further extension or even for a second separate plant in Bulgaria,” Ruiner said.
The investment in a second unit, which would most probably be located in the eastern parts of Bulgaria, would be identical to the existing one, Ruiner added.
For next year, Henkel sees a 40 million euro total turnover from the sale of adhesives, detergents and cosmetics sales in Bulgaria.
Next year's turnover will be 20-25% higher than this year's. "We grow more than 20% on an annual basis,” Ruiner said.
Henkel (www.henkel.com) is active in 127 countries, in 60 of which it has production operations, and has a staff of over 55,000 people. For 2006 Henkel reported an operating profit of 1.3 billion euro, up 11.7% on the year, and sales of 12.7 billion euro, up 6.4%.
($ = 0.7009 euro)
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