Could you briefly tell us the history of "Tutunul Romanesc" and what have been the main changes that have happened in the past few years?
I think it would be appropriate to talk about a more recent history of Tutunul Romanesc because there were a lot of changes after the Revolution in 1989 regarding the production of cigarettes and tobacco as well as in the tobacco market. The period before this - for almost 50 years - you could say it was almost insipid, being the only producer on the market.
Our main activities are to cultivate and process tobacco and the manufacture of cigarettes. These are integrated activities. Generally there is a clear delimitation between the production of tobacco and the production of cigarettes but we still are tributaries of a socialist vision - we still have the old organization. We have recently started to change this through a very deep restructuring program. The activity of our administration until the appearance of transnational companies was really calm - no competitors - but things got more complicated when these companies that represent serious competition for us entered the Romanian market. When the international companies started to produce inside the country, our administration "woke up" albeit a little bit late and started worrying about one and a half years later, when they realized that they started to lose the market.
How are you actually competing with the big international companies such as Reynolds, British American Tobacco among others?
Our company produces cigarettes that are directed to the medium segment of the market. Theoretically we should not worry that the products of the international companies are of higher quality than ours but rather because they have started to steal from our market segment which decreases year by year. Our main aim for the moment is to stabilize the production and to stop the regression.
What is your market share nowadays?
Our market share is 45% in terms of production, and approximately 25%-30% in terms of value taking into consideration that our cigarettes are cheaper than the international ones.
Has any anti tobacco campaign affected the Romanian market?
So far its effects have not seriously affected us, especially when compared with other former socialist countries like Poland where these campaigns have been much stronger.
In which way do you think that the entrance to the European Union is going to affect "Tutunul Romanesc"?
We know the regulations of The European Union, and we have adjusted in order to meet them in our country . We are making an effort preparing the future production in order to meet the European standards in terms of quality. We would like the process of integration to find us with our "homework" well done.
Are you a private company or in the process of privatization?
We are in the process of privatization. One of the
main reasons why I have been appointed here together
with a new superintendent is to successfully end
up the privatization process. My personal opinion
is that wherever there is private property this
leads to the manufacturing of high quality goods. |
Can you give us some more details about this privatization process you are being involved in?
We have signed a contract with ABN-Amro Securities in virtue of which they will realize the memorandum and effectively take care of the privatization process. On December 21st 1999 an announcement was published in the newspapers letting everybody know that everything is ready for those who are interested in knowing about the company and want to participate. The intention of the Ministry of Agriculture is to end up this privatization within 4-5 months.
Are you ready to be absorbed by another company or would you rather sell shares?
At the beginning we would like to sell a big amount of shares to a strategic international investor who would help us to capitalize the company.
Could you give us some figures about your operations in Romania?
Our company is right now undergoing a restructuring process. As a result of the restructuring program approved by the Minister of Agriculture on November 20th 1999, our company's main activities (the processing and manufacture of cigarettes) were redefined. In this moment we have four big branches where we produce tobacco and five cigarette factories (the restructuring program has resulted in the shutdown of the sixth one). Annually we produce 18.500-19.000 tons of cigarettes while the market absorbs around 42.000 tons/year. We have 3.500 employees although 1.300 jobs have been suppressed after closing down some non-profitable centers.
What are the non-traditional methods of promotion that you are using?
Taking into consideration that we were a State Company, our possibilities have been very limited. Sometimes we have to fight with the mentality of the Ministry of Finance to be able to advance in this promotional area. For the time being we only use a traditional advertising method.
Is there any product from the neighboring countries on your market?
The Romanian market did not absorb any products from outside. 98% of the products on the market are produced in Romania. International companies like Reynolds (JTI), British-American Tobacco or Philip Morris already have factories here.
Is there any other information you would like to add?
Our company works with a lot of international suppliers. All the auxiliary materials are imported and are of a very high quality. The tobacco used in our mixtures is imported in proportion of 40%, mostly coming from Italy, India, Turkey, Greece and other countries. We can offer to our potential clients Romanian tobacco, particularly Burley tobacco which is one of the best tobaccos in Europe and which is going to be massively exported next year. |
TUTUNUL ROMANESC