One of the oldest dairy processors in Romania asked recently for insolvency at Arges Court. Lactag Costesti can not pay its debts of RON 67.38 million, an announcement of Bucharest Stock Exchange (BVB) reads.
With a history of about 60 years, the company holds one of the largest dairies in the south of the country, with an annual production capacity of 500,000 hl of raw material milk and is under an implementation period of an upgrading and streamlining program that will lead to a doubling of production capacity and diversification of the assortment.
During 2013-2015, the turnover of the company increased from RON 60.9 million to RON 70.8 million in 2014, reaching to RON 35 million at mid last year. Also in H1 of 2015, the company reported a net profit of RON 1.2 million.
However, the company did not have cash availability to pay its debts to suppliers (RON 15.5 million), banks (RON 23.3 million), public institutions (over RON 883,700), other creditors (RON 22.9 million).
Among the reasons that have generated the liquidity shortage include recurrent delays in payment to suppliers that led to giving up their cooperation with the company, low turnover generated in relation to certain distributors, aggressive marketing system of the competition, weak notoriety of Lactag brand, but also faulty supply of its own stores.
The company has 323 permanent staff to which has debts of over RON 1 million.