By Hamza Hendawi
WITH ITS state-of-the-art factory written off by a fire last Sunday, Pittas Dairies and its owners are left with the unenviable task of rebuilding their production base while saddled with debts.
The £10-million factory at Latsia on the outskirts of Nicosia had barely begun operating four months ago, with brothers Athos and Melis Pittas hoping that the standard of hygiene and efficiency provided by the high- tech equipment would crack open new export markets and tempt upmarket overseas retail chains to stock up their products.
Pittas, the island’s oldest and largest dairy, has for many years carried the flag in foreign markets as far afield as Australia, the Persian Gulf and West Africa. Its halloumi cheese, arguably the island’s best known export item, has won the island and Pittas international fame and spearheaded the company’s export-driven expansion, the new factory included.
“What is important now is to revive the company,” said Athos Pittas. “I am constantly in contact with the government as I try to put together an action plan to revive the company,” he told the Cyprus Mailon Wednesday.
The task of getting Pittas back to where it was on the eve of Sunday’s fire will be a particularly difficult task, but the Pittas brothers Athos and Melis are unperturbed by the challenge ahead.
“We shall build a new factory with the same design and at the same place,” said Melis Pittas, in a what sounded like a deliberate display of resilience.
“We’ve lost our momentum in the market for the time being… but we shall be returning to sizeable production by the end of May,” he told the Mail.
Pittas has retained its old factories in Nicosia and can still produce several types of cheese and yoghurt from there and other facilities not affected by the fire. “But we also need short-term assistance from the government… (such as) refrigerators, warehouses,” Melis Pittas said.
A highly-placed source who was briefed earlier this week on the company’s financial affairs told the Cyprus Mailthat Pittas owed the Popular Bank £14-15 million and the Development Bank a further £2 million.
“These are initial estimates, which may turn out to be lower than in reality when more information is made available next week,” said the source, who spoke on condition of anonymity.
There were other figures floating in Nicosia about Pittas’ total debt and the value of the insurance policy on the factory, which varied between £8 and £10 million.
One estimate put the debt at £18.75 million, a figure that Melis Pittas said was way too high when it was mentioned to him by the Mailon Wednesday. He also categorically denied that four Popular Bank executives sit on the company’s seven-man board of directors.
Popular Bank spokesman Andreas Stylianou refused to comment on Pittas’ credit status, saying only: “Pittas are just big customers of ours.”
But banking sources pointed out that Pittas looked like a safe bet given the company’s huge export potential. “Let us say that the Pittas’ exposure would not bring about the collapse of the Popular Bank,” said one source.
Pittas were Bank of Cyprus customers until 1995 when they took their business to the Popular Bank. Industry sources say the decision to change was made by Pittas when the Bank of Cyprus refused to extend new lines of credit to the company on the grounds that it was stretching itself too thin.
Melis Pittas, however, said the company changed banks because Popular Bank had offered better terms than those given by its bigger rival.
Ironically, last Sunday’s disastrous fire came only days before a team from the in-house magazine of giant British retailers Sainsbury’s was due in Cyprus to research an article about Pittas halloumi, the product that Pittas was heavily counting on as the engine of export expansion.
In September, officials from Sainsbury’s had been scheduled to arrive on a much-heralded visit that was expected to produce an agreement for the supermarket chain to stock Pittas products.
