Tsvetan Lajanski: Devin Has Established Itself In Bulgaria, Now We Are Targeting Neighboring Markets

Tsvetan Lajanski: Devin Has Established Itself In Bulgaria, Now We Are Targeting Neighboring Markets

Profit.bg talked to Devin JSC's CEO Tsvetan Lajasnki about the company's market share in Bulgaria and the management's intention to enter the markets of Bulgaria's neighboring countries.

Mr. Lajanski, what has changed since the company went public?

Devin JSC has shown excellent financial results since it became public. Revenues grew 75% in Q3 versus 2006 figures, EBIDTA rose to 6.868 mln leva (3.511 mln euros), and profit stood at 2.2 mln leva (1.124 mln euros), versus a loss in the amount of 318 thousand leva for the respective period in 2006.

Meanwhile, we attracted a lot of capable professionals, which we believe can help us implement our aggressive strategy for the following year.

Have the new machines entered into exploitation and to what extent do you believe their introduction will boost Devin's production capacity?

All contracts on the modernization of production have been completed and the new machines will enter into exploitation in the first half of 2008. The brand is the German Krones, and they will turn our bottling plant in Devin into one of the most up-to-date factories on the Balkans, our production will be completely automated.

What is the company's market share during the Jan – Sept period, and how is it changing with time?

Devin is still the leader on the market holding about 31- 32% of it, and we are witnessing a considerable hike on the segment of water to offices.

How much has the consumption of mineral water and soft drinks increased in Bulgaria?

The market is growing at a stable pace. Demand for bottled water in Q3 rose 15%, compared with the respective period last year, i. e. 74 mln litters. For the nine months between January and September consumption of bottled water stood at 532 mln litres (according to statistics announced by the Bulgarian Soft Drinks Association – BSDA).

Do you think your absence from a certain segment of the market is a disadvantage?

Our aim is to make Devin JSC the leader on the market of soft drinks in Southeastern Europe. We are planning to acquire several companies in order to strengthen our product portfolio. This also includes entering market segments, new to us at this stage.

Q. Are any changes around the concessions of mineral springs being discussed?

Bulgarian legislation differs greatly from the European practice as far as concessions are concerned. We are continuing to be very active, incl on a EU level, in trying to urge the government to introduce changes.

What is the value of Bulgarian soft drinks market?

The market research consultants Canadean value our market of retail sales of bottled water at 256.16 mln leva (130.97 mln euros) in 2006, and prognosis for 2007 is at 271.23 mln leva (138.677 mln euros).

At what stage are the procedures for acquisition of companies in Bulgaria and abroad?

The negotiations we lead are on different stages, but we are hoping to be able to announce good news soon.

Is Devin a recognized brand outside Bulgaria?

Devin has been exporting to the USA, Germany and other countries for years, but so far export has not been top priority for us. We were focused on being number one in Bulgaria.

Now, after we have already achieved that, we are turning to the next logical step. We are planning an aggressive expansion to Romania and Greece.

The markets of the capital cities of these two countries alone are “another Bulgaria”. We think that with an adequate strategy and the right approach we will be able to establish ourselves among the leading companies in those markets as well.

In less than 2 months Devin became one of the most liquid issues on BSE. Why do you think you were able to achieve that in such a short time?

Our company has clear objectives, professional management, a wise financial policy, and operates in a sector that is developing very fast in the region. This is triggering a lot of interest from investors.

Do you agree with recent comments about overrating of Bulgarian companies?

We are more comfortable with analyzing the market of soft drinks, I would not engage in making statements about the overall situation of the stock market.

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