A plan has reportedly been put before the Hungarian government to save the company, which is likely to involve recognising it as a company of national strategic importance and creating a major public corporation.
The major of Gyula said that the longer the state takes to intervene, the more dire the situation is likely to become.
CEO Janus Ruck told Magyar Hirlap that, under the new capital injection, the owner would need a state endowment of 20-30% to increase production.
He said it had not been possible to pass on the rising costs of energy, labour and logistics, while the tight supply of live pigs in Hungary was also a problem.
The company produces meat products, including the traditional PGI products, Gyula and Csaba sausages. Its partners include the Hungarian hypermarket Cora Magyarország, Costco, Penny, Coop Hungary (Rewe Group Hungary Penny Market) and Spar-Interspar-Kaiser. It also exports large quantities into the Russian market.
The meat processor, which is one of the largest employers in the region, reported losses of Ft300m in 2011 on revenues of Ft75bn, which it attributed to increasing input costs, according to Hungarian newspaper Magyar Hirlap. The company is now negotiating with the government, Ministry of Rural Development, local government and another firm to help save the company.
