INTERVIEW – Macedonia's Vitaminka Expects 2008 Sales Revenues to Rise 12%-15%, Global Crisis To Hit Next Year

"Operating costs will also be higher this year, compared with 2007, causing a negative influence on the overall company’s operations”, Naumoski said in a statement e-mailed to SeeNews.

Vitaminka ended 2007 with sales revenue of 1.051 billion denars ($24.4 million/17.4 million euro), 12.2% higher on the year. The company’s pre-tax profit in 2007 was 39.6 million denars, 28.6% up from a year earlier, Vitaminka's audited 2007 financial report said.

Naumoski expects Vitaminka’s gross-profit in 2008 to be similar to last year.

“Currently, the global economic crisis causes no tangible disturbances in our company and in the Macedonian food industry as a whole. We expect the consequences to be felt at the end of the first quarter next year, and to be more prominent in the second quarter…”, Naumoski said.

He voiced fears that the crisis may cause a fall of Vitaminka’s sales, firstly abroad, and then on the domestic market.

“Lay-offs already seen in the most part in the metal and textile industries will cause a drop of purchasing power of citizens, our consumers, that we will feel through sales”,  Naumoski said, adding that the extent of this negative influence will depend on possible further closures and subsequent layoffs in Macedonia and in Vitaminka’s foreign partners.

“Anyway, lay-offs are not in the interest of the food industry”, Naumoski said.

Vitaminka exports to around 15 countries worldwide, with the main export markets including the former Yugoslav republics of Croatia, Bosnia and Herzegovina, Slovenia and Serbia.

“We export to all continents, except Asia. For now, we have no problems with the placement of our products abroad, in view of the crisis. But, it does not mean there will be no problems next year…”, Naumoski said.

According to him, a possible price rise of raw materials may worsen the situation in 2009.

However, he praised the measures adopted by the Macedonian government, worth a total of 330 million euro ($462 million), to help the country's economy cope with the impact of the global economic crisis.

The measures include one envisaging that businesses would pay profit tax only if they distribute their profit as a dividend payment. Part of the package is the lowering of import duties on nearly 500 products.

“It is good that measures are considered as initial, which means we expect new ones to be taken to help the companies to keep their 'shape' in surviving the next year and 2010 without bigger consequences”, Naumoski said.

In addition, Vitaminka has taken its own measures to facilitate its working, he said.

“In the next 3-5 years, we plan no investments using loans from domestic or foreign financial institutions. We have just realised an investment in a soft cakes production unit financed with a EBRD loan. The sale of these products will start in 2009”, Naumoski said.

The total worth of this investment was 5.5 million euro, of which four million euro were financed through a loan from the European Bank for Reconstruction and Development (EBRD).

"In the next mid-term period of five years, we plan investments from our own funds, aimed at production’s expansion and modernisation, purchasing machines to increase productivity, implementing HACCP standards for food safety, bigger energy savings and improving ecological protection," Naumoski announced.

Vitaminka (www.vitaminka.com.mk), based in the central city of Prilep, has been licensed by Slovenian food processing company Droga Kolinska  to manufacture some of its products. Vitaminka's product portfolio includes snacks, chocolates, puddings, sweeteners, soups, filter teas, instant drinks and food additives. It employs 480 people.

(1 euro = 60.5597 Macedonian denars)