Zorbas seeks to expand to Romania

Cyprus’ largest bakery chain, A. Zorbas & Sons Pcl (ZRP) intend to expand their operations into Romania. During a presentation held in Athens for institutional investors, the Company’s management team analyzed ZRP’s strategic plan, which stipulates that initially ZRP will open 2-3 retail shops in Romania with the intention to increase them to 5 by the year end.

The cost of the investment is estimated at EUR 3 mln. Additionally, in its effort to increase its local market share (currently standing at 35%), the Company aims to add 3 new retail shops within 2008 to its existing 50 retail branch network.

Marfin Egnatia analysts say they anticipate that the above developments will add to the

Company’s top line by a negligible amount in 2008 and reap the full benefits of its expansion in Romania (and local network expansion) within 2009. Finally, the company’s new revenue line relating to sales in the wholesale sector is expected to gradually contribute a more profound share in Group sales.

In another development, according to the Company’s CFO Michael Michael, ZRP signed an agreement with the ‘McDonalds’ concerning the supply of bakery products to the local restaurants. The Company anticipates additional revenues of reach EUR 1.5 mln with net profit reaching EUR 200.000-300.000 annually.