Azuga Waters: We Have To Be Aggressive To Achieve 50-100% Growth

07.26.2011 By David Ioana

Violeta Moraru, who together with husband Valerii Moraru, controls the mineral water business Azuga Waters, says the local market is very competitive and everybody vies with everybody just to get an extra percentage on the segment.

On the mineral water market, where the Morarus own the Azuga Apa de Izvor and Perla Covasnei brands, brands such as Borsec (Romaqua), Dorna (Coca-Cola) and Izvorul Minunilor (European Drinks) call the shots.

"The first year translates into few sales through store chains and the costs exceed the revenues and any presence (in the big store chains i.e.) amounts to losses. The second year you break even, and only in the third year we can talk profitability," Violeta Moraru told Ziarul Financiar.

The Morarus have only recently started to focus on the mineral water segment, after in 2009 they exited the Azuga beer business they had been involved in since 2001. In 2009, the Morarus sold the company to Ursus, leader of the beer market, and now are preparing to strike another deal with the beer producer, but this time as a buyer. The owners of Azuga Waters are interested in Azuga assets, where they are already bottling water based on a rental contract.

Ursus closed the Azuga plant shortly after takeover, but rented out the equipment to the Morarus, who produce still and carbonated mineral water here. At the beginning of 2010, the Morarus started to bottle the Azuga Apa de Izvor water brand, which is positioned on the low-priced segment, through Azuga Waters. This year, the company also inaugurated the Catalina plant (in Covasna county) where it bottles Perla Covasnei mineral water brand, in the wake of a EUR5 million investment, to which another EUR2 million were added for distribution and advertising.

Last year, Azuga Waters posted sales of over EUR5 million and estimates will double the figures in 2011.

"We came late on the market and we want to grow by 50% to 100%, so we have to be aggressive. But this aggressive approach entails significant spending."

The company intends to start an advertising campaign in the media in 2012, for which it has allocated EUR1 million.

(English version by Daniela Stoican)