Yioula prepares to invest 50m euros in Stirom

Yioula Glassworks Group of Greece is to invest a total of 50 million euros in the Romanian company Stirom, a producer of glass packaging for the food industry in which Yioula is the majority shareholder.

Yioula Glassworks Group of Greece is to invest a total of 50 million euros in the Romanian company Stirom, a producer of glass packaging for the food industry in which Yioula is the majority shareholder.

"We are investing in technology and cost cutting," said Nikolaos Barlagiannis, Stirom''s general manager.

The investment will increase the manufacturing capacity of the company to at least 150,000 tonnes of glass packaging a year, from the current 110,000 tonnes. Stirom has already contracted a 20 million euro loan from the European Bank for Reconstruction and Development (EBRD) for the completion of its restructuring process and the expansion its production lines.

"The second phase of the contract with EBRD, which will get us a similar funding, will begin in March 2006 as soon as we have started production on three new lines purchased with the first loan," Barlagiannis said. The contribution of the Greek group will amount to 10 million euros.

The main clients for the glass-packaging segment are producers of soft drinks, alcohol and wine, including brewers and companies that make preserves. With glass for household use, Stirom sells its products to wholesalers throughout the country, as well as through retail chains.

The company wants to focus on major clients in the future, Barlagiannis said.

The Greek group has invested 12 million euros since 2003, when it took over the controlling interests in Stirom. "We allocated three million euros to rebuilding the IT systems and to the office building, as well as nine million euros that went to manufacturing," Barlagiannis explained.

The group has been present in Romania since 1999 through a trading company, which reached 35-37% of the market before manufacturing was started, says Barlagiannis. "Stirom currently accounts for 50% of the market, and the group''s market share in Romania has reached 70%," he said.

He added exports were very important to all the factories in the group. "Exports account for at least 15% of production at any of our factories. When the conditions are right, they can reach 50%."

Stirom''s production last year was equally divided between the domestic market and exports, though exports in 2005 fell to 18% primarily due to the depreciation of the euro.

Stirom''s turnover last year reached 121 million RON (30 million euros), an increase of 12% on 2003.

"We budgeted for 10% growth in both profits and turnover for 2005, but I don''t think this will be achieved, at least not in RON," warned Barlagiannis.