8 October 2007 - Leading Italian and European rice producer Riso Scotti will not be posting profit this year, warns the firm's managing director Angelo Lonati.
"We didn't generate any profit last year and this year we invested 1 million euro to promote our products; in the wake of this strategic decision we will not be posting profit this year, either," said Lonati in a statement.
Beside investments in promotion, Riso Scotti has allocated almost 20 million euro to develop production domestically this year.
"Next year, we will slow down the pace of investments, with the only directions we will centre on being the opening of new plants and land acquisition," Lonati added.
Last year, in Romania, the firm opened a 3 million euro rice processing plant in Vladeni, Ialomita county. The plant has an annual production capacity of 60,000 tons of rice.
The company also plans to open a new rice processing facility in Olt county.
Lonati said that next to the new facility, several hectares of land will be cultivated in an attempt to become more cost efficient.
“We have to stick to the lowest prices to be competitive and to be able to successfully cope with competition”, stated Lonati.
According to the statement, Riso Scotti wants to maintain and increase its market share in Romania, as well as establish itself as a best-selling brand.
"Our strategy is to maintain the position of our brand at a medium, medium-high level to be able to become a known brand. We’re increasing our market share: our purpose is to hold 13% of the market in the next 3 years," explained Lonati.
Rice consumption in Romania amounts to 100,000 tonnes annually, with the rice market being put at around 50-60 million euros. "The Romanian rice market will consolidate over the next 2-3 years and when this happens we will expand to Eastern Europe," added Lonati in the statement.