Tuesday, March 8, 2011

Tnuva closing cowshed in Romania

Israeli cooperative halts activity in dairy farm's cattle shed due to poor profitability
Navit Zomer 


Israeli cooperative Tnuva is halting its cowshed activity in Romania due to financial considerations. The cattle shed has 1,200 milch cows which supply 25% of the dairy farm's milk production.

According to Tnuva CEO Arik Schor, the cooperative has enough milk from external cattle sheds.

"The cowshed and cow breeding is not Tnuva's core business, so we asked ourselves whether we should invest efforts in breeding cows. The cowshed is not profitable and was built at the time to ensure the supply of milk to the dairy when there was a milk shortage in Romania. This is not the situation today.

"Our suppliers in Romania include the cattle sheds set up by Israeli company Adama Holding, so the issue of shutting down the dairy was thoroughly examined," said Schor.
The cowshed is located 20 kilometers (13 miles) outside Bucharest, near the Tnuva dairy which was built at an initial investment of €55 million (about $75 million). The cowshed, which stretches over 50 acres, was purchased for €1 million ($1.37 million) from a Romanian cooperative which was dissolved after the collapse of the Ceausescu regime.

An Israeli team renovated the cattle shed structures, set up a modern milking facility and imported the cows through Germany. According to Schor, the Romanian authorities are considering building an airport on the cowshed area.

Tnuva's dairy in Romania, which was inaugurated in 2007, was affected by the financial crisis in the Eastern European country and currently accounts for only 7% of the dairy products market in Romania, while Danone holds 35%. Despite the heavy losses Tnuva suffered, the company has decided to continue operating the dairy.

No comments: