After struggling with overcapacity, the Sikér Zrt. announced its quit from the milling industry, leaving a debt of millions, according to vg.hu.
Back in February the Sikér Malomipari Zrt. asked for delaying the payments but they could not agree on the terms with the creditor, therefore, the proceedings of bankruptcy were terminated by the court. This means that the process of the liquidation of the company, that was regarded one of the five biggest participants of the market with its annual turnover of more than 10 billion HUF, can begin.
Earlier, Sikér seemed to develop dynamically: it increased the turnover by 250% within four years, furthermore, the firm could pay a dividend of 43.5 million HUF in 2013, and had a profit of more than 90 million HUF in 2014. It had a reputation of a trustworthy and stabile company, hence, the news about the bankruptcy were rather unexpected by the members of the market.
Antal Pekk, the trustee of Likvid-B Csődmenedzser és Felszámoló Kft. (Ltd. of Bankcruptcy managing and Liquidation) told vg.hu that the milling company has stopped working. Based on earlier reports the site writes that Sikér was supposed to come to terms with 50-80 creditors. Moreover, as of the 2014 balance sheet, a debt of 7 million HUF will have to be paid.
Despite the usage of the latest tools, and the EU supported technologies of grinding and wearing, Sikér went bankrupt. According to the February report of Ferenc Blázsek, owner of the company, the bankruptcy of the Széchenyi Bank, the withdrawal of financing banks and creditors, the cartel fine of more than 300 million HUF, and the serious competition in the industry were the factors that led to the failure.
However, other industry members told the site that the loss of the company cannot really be felt on the market, as the gap which Sikér left behind was immediately filled by other competing members. Notably, the capacity of the industry is quite oversized, about 60% of it is used. Therefore, the ability of profit-making is rather modest and companies usually join negative price competitions, accepting deficit just in order to keep the customers, and hopefully expand their markets.
Although, this tendency cannot really be followed by flour production. The statistics concerning agriculture show an average profit – proportional to turnover – of 5% in the milling industry, yet, this is said to have been improved by the multifaceted companies – like Nestlé – and the exclusively milling companies have a profit of about 1-2%.
Copy editor: bm
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