EU Integration Drives Tuna Distributor Turnover Over 7.5M Eurosff

Serpico Trading, a Romanian distributor of food products and canned tuna, expects sales to advance by 50% this year, which would take the company’s turnover to over 7.5m euros.

”The effects of EU integration have generally been positive. The turnover generated in the first half of the year is way above its estimated value. However, we also expect to see some negative effects. For the time being, we are experiencing a labor shortage (particularly at the middle management level) along with a pressure on salaries. We also expect to see future setbacks, such as market fragmentation, a fall in turnover for certain products and a rising number of competitors,” stated Gabriela Simion, national sales manager and a partner at Serpico.

After integration, distribution costs on the Romanian market increased primarily as a result of rising salaries.

The company centered on partnerships with EU producers several years before integration, in order to prepare for the new market.

”Prior to 2007, we developed only two partnerships outside the EU: we have maintained one (with a supplier of canned tuna from Vietnam) and replaced the other (Olivos Turkey - a supplier of olive oil) with an Italian producer (Salov -owner of the Filippo Berio premium brand),” specified Gabriela Simion.

The elimination of custom duties allowed the company to have a much stronger presence on the market with products that were previously uncompetitive due to the high customs duties (e.g. tomato paste).

”Major investments in logistics, IT, compliance with international standards have all been dealt with in the past. However, in a distribution firm, investments are ongoing, investments are constantly made in logistics. Simultaneously, IT is a process that also requires constant investments,” added Simion.

The distribution company budgeted its 2006 turnover growth at 30%, to 5.2m euros.

Serpico Trading was set up in 1993 by the Simion family and currently has contracts with over 10 food suppliers, including Bonduelle, Olivos, Dr. Oetker and Maseko (tinned fish products).

In 2004, the company entered the segment of frozen food distribution because of a high demand for such products. Now, frozen product distribution accounts for around 15% in the company’s turnover.

Players on the market of food distribution services include Macromex, Whiteland, Elgeka-Ferfelis and Agroalim.