industry insights
DESCRIPTION
Romanian Industry Info summer 2014TRANSCRIPT
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3
ehind all products we know, trust and use
every single day, there is much more than
the shiny brand that catch our eyes and
insinuates in our minds. The quality of a
certain products resides in the quality of itscomponents, and building this components is a significant
part of global industry.
You may not see them advertising their services and
products on TV or in magazines, but these companies
building parts and components managed to build their
brand as strong as their more visible partners.
From a company which builds only gears, being the
preferred partner of industry leaders from various sectors,
to the company which literally lock our cars, providing
access, safety and vehicle immobilisation equipment for
makers such as Dacia, Mercedes, Volvo and Porsche, some
of the most important component manufacturers in the
world made their products in Romania.Some of the inspiring stories from this issue of our
magazine proves that servicing other businesses it's a
business itself, and a fairly consistent and profitable one.
DAN EBERHAT
editor in chief
THE BUSINESSto serve other businesses
B
INDUSTRY INSIGHTS / SPRING 2014 / EDITOR'S NOTE
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INDUSTRY INSIGHTS / SPRING 2014
6Highlights
Relevant news from
different industrial sectors
COVER STORY
8FECNE
Prepared to offer the moon
COMPANIES
14CONPET S.A.
Ambitious Projects and
Regional Development
18ELECTRICA
Profile of a market leader
24ELECTROCENTRALE
BUCURETI SA
State owned companies
must act like the
private ones
29PROIECT ARAD
You Must Identify Yourself
with What You Do
32CONNECT GROUP
Different clients,
different strategies
36HUF ROMANIA
A look into the future of
vehicle safety and access
40IGW ROMANIA
Where The Wheels
Are Turning
44MOB-IUS SA
The right tools in
the right hands
49ALCHIMEX
Why crop protection
is a necessity
CONTENTS
54Guyomarc'h
Transition Manager
58VRANCART SA
Fighting a fierce
competition
62TITAN SA
The mighty titan
66
ROMAQUA GROUP
It is easier to sell the truth
68DANONE
Involvement in the society is
part of the company's DNA
74SECUIANA
The ultimate test: to please
customers' tastes
76CCIR
Pragmatic Services and
Useful Information
State owned companies
must act like theprivate ones
Gabriel Ignat, General Manager of
Electrocentrale Bucuresti S.A. (ELCEN)
WE ARE
PREPAREDTO OFFERTHE MOON, IF
REQUESTED.AT A COST
Luca Tosto, CEO FECNE
8FENCE
24ELECTROCENTRALE BUCURETI SA
62TITAN SA
44MOB-IUS SA
32CONNECT GROUP
40IGW Romania
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INDUSTRY INSIGHTS / SPRING 2014 / HIGHLIGHTS
STIROM S.A. INAUGURATED A NEW
INSTALLATION FOR GLASS MELTING
Stirom SA commissioned on May 29, 2014, the glass melting facility
no. 3, part of the "Improving energy consumption by investing in
manufacturing of glass packaging in Stirom SA" investment project.
Stirom is the largest glass recycler in Romania, shards
recovered being used in manufacturing glass packaging.
The new glass melting facility is the most modern in Europe. This
investment will
contribute to the
sustainable development
STIROM SA, and to the
decrease of the annual
energy consumption (gas
and electricity) by 25%.
The project is financed at
the rate of 60% of private
equity funds and 40% of
the EU structural funds.
CONSTRUCTION
AND HOME
DESIGN TRADE
FAIR BROUGHT
17,000 VISITORS
TO ROMEXPOBetween April 10 to 13, ROMEXPO
held five exhibitions whose subjectshave complemented each other. Thus,
for four days visitors stepped in for:
CONSTRUCT EXPO (construction
equipment), AMBIENT EXPO (home
design), ROMTHERM (heating, cooling,
air conditioning), FLOWERS & GARDEN
(gardening) and ANTIQUE MARKET.
From the impressive number
construction machinery to small
decorations for home and garden, the
five events provided a complete view,
in accordance with the market for
innovations construction, interior and
exterior design and landscaping.
The five events brought together
over 400 exhibitors on an area of
15,000 square meters, attracting17,000 visitors over four days.
"In general, fairs and exhibitions are true
and fair view of the real situation of the
domains they represent and the five events
that have just ended on ROMEXPO no
made exception. From the signals we have
from the exhibitors and visitors, things
seem to move in a positive direction. Of
course we would like to see the numbers
from seven years ago, but more important
is to make small, but safe steps in the
right direction", said Mariana Suciu,
General Manager of ROMEXPO S.A.
Privatization of Oltchim postponed once againNo company submitted until the deadline (June 6) a binding offer for the
acquisition Oltchim and judicial administrators of the chemical plant will
resume the process of selling shares.
"At the deadline, the consortium of trustees found that was not submitted
any binding offer to purchase the shares held by Oltchim from Oltchim
SPV," according to a press release of the chemical plant. Economy Minister
Constantin Nita said Tuesday that Oltchim will not be closed and there will be
no buyer until Friday, June 6, the chemical will be sold at another time.
A merger of equalsto create LafargeHolcim
Holcim and Lafarge announced in April their intention to combine the
two companies through a merger of equals, unanimously approved by their
respective Board of Directors and fully supported by the core shareholders
of both companies.
Commenting on this announcement, Rolf Soiron, current Chairman of
Holcim, said: This proposed merger is a once in a lifetime opportunity
to deliver substantially better value to customers with more innovation, a
wider range of products and solutions and more sustainability and enhanced
returns to shareholders. Bruno Lafont, Chairman and CEO of Lafarge, also
commented: I am confident that this merger of equals provides a unique
opportunity to rapidly create the most advanced platform in our industry
with outstanding synergies. Lafarge and Holcim pro forma combined sales
amount to c. CHF 39bn / EUR 32bn and Ebitda to c. CHF 8bn / EUR 6.5bn.
LafargeHolcim would be listed on the SIX in Zurich and Euronext
Paris. It would continue to be domiciled in Switzerland. The proposed
combination is conditional upon, among other things, execution of definitive
documentation, approval of the shareholders of Holcim and obtaining
required regulatory and other customary authorizations. Completion is
expected by the end of H1 2015 subject to obtaining regulatory approvals.
BULGARIA SUSPENDS
WORK ON SOUTH
STREAM PIPELINE
ANTIBIOTICE SA EXPANDS
ITS BUSINESS IN SERBIA
Bulgaria suspends works on the
South Stream project over the
European Commissions infringement
proceedings, Bulgarian Prime
Minister Plamen Oresharrski
said on Sunday after a meeting
with American Senators.
We have received a request from the
European Commission, after which I
ordered to suspend the works. Furtheractions will be clear after additional
consultations with Brussels, he said.
South Stream is one of Russia's
major projects to reduce its reliance
on Ukraine as a transit country
after years of price disputes
and the crisis over Crimea.
Bulgaria depends almost entirely
on Russian gas deliveries and has
long backed South Stream as a way
to guarantee security of its supplies,
meaning that the country has objected
to EU resistance to the deal.
Work on South Stream, which
is to pass through Serbia and
the EU nations of Greece, Italy,
Hungary, Slovenia and Austria,was due to begin in the summer.
Antibiotice SA continue
to expand its presence in
international markets. As
of May 2014 ATB Pharma
company in Serbia will represent
Antibiotice SA in relation tolocal authorities and commercial
partners in Serbia, Macedonia,
Bosnia and Herzegovina.
Considering the time
required for product
registration in order to
sell in those markets, it is estimated that the first pharmaceuticals will be
delivered from 2015. In the first stage were identified 20 drugs to treat infectious
diseases and dermatological diseases, to be exported in these markets.
DACIA FACTORY PRODUCED 5 MILLION CARS
Dacia plant in Pitesti marked, Tuesday, May 6, 2014, the production
of 5 million vehicles. The car that came off the production lines is
a Duster 4x4 Laureate version equipped with the 1.6 16V 105 hp,
navy blue color. It will be delivered to a customer in Romania.
Currently, Duster model represents 50% of total
daily production at the Dacia plant.
FAIRS &
EXHIBITIONS
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INDUSTRY INSIGHTS / SPRING 2014 / COMPANIES
Walking through the enormous production facility of FECNE and
seeing the welders surrounded by sparks, the workers buzzing
around on electrical bicycles, the machine tools shaping huge
chunks of metal and the bridge cranes lifting fixtures weighting
thousands of tons each, one unused with the scenery can feel
really small. But not Walter and Luca Tosto father and son
running a family business with a turnover of 100 million.
More than a half a century ago,
Walter Tosto's company starte d
to produce tanks for wine
fermentation in the small town of
Chieti Scalo, Italy. Since then, the company
diversified its activity, becoming a world
leader in the production of heavy wall static
and heat transfer equipment for Oil&Gas,
Petrochemical and Energy markets. In 2012,
under the management of Luca, Walter's son,
the company decided to pursue a geographical
expansion and bought FECNE, a Romanian
company specialized in the production of
equipment for the Energy Sector.
Why FECNE? Bec ause I fell in love with the
place the very first time I've seen it, in 2002,
says Luca Tosto. I was very young at that
time and the huge, well equipped production
capacity impressed me a lot. I've started to
imagine how I would change the workshop,
what kind of produc ts could be m ade here,
how would they fit into Walter Tosto's
product range, transport routes, customers
everything, adds Mr. Tosto.
8
PREPARED TO
OFFER THE MOON
FECNE
FECNE design and
manufactures
critical equipment
such as high
performance Heat
Exchangers and
Pressure vessels
for different
applications in
the Oil&Gas,
Petrochemical and
Nuclear markets.
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INDUSTRY INSIGHTS / SPRING 2014 / COMPANIES
Still, 10 years have passed until he
saw his dream come true. And when
did eventually happened, it was no
walk in the pa rk. In February 2012,
when we bought this workshop, the
pillars supporting the ceiling were
covered with several centimetres
of ice. It was like entering an
empty re frigerator, recalls him.
The production was frozen as well,
after several changes in ownership.
The huge bridge crane, powerful
machine tools and welding stations
were sitting stil l in the dark ha ll.
Good luck with this! that's all my
father had to say about my decision
to invest in FECNE.
But the luck was not enough. Luca
Tosto had to put on top of it 15
million Euros and long work hours
to revive the factory. And we have
not finish today, we have to work
hard in the next future. The new
owner started with the refurbishing
of the building installed a new
heating system under the floor (90
km of tubes with hot water), large
windows were c ut into the compac t
walls and sk ylights into the ro of. Old
machine tools worth repaired were
refurbished (including the bridge
cranes, rolling machines, etc.),
while others went to sc rap metal;
in the meantime, new, cutting-edge
technology was installed. But to be
able to produce critical fixtures such
as reactors for Oil&Gas industry,
heat exchangers and condensers,
one essential factor was still missing
the skilled workers. Luca Tosto
started to recruit former employees
of FECNE and other experienced
workers and engineer s. All produc ts
made by FECNE are designed by
the Walter Tosto Engineering team,
located in Bucharest since 2000.
Being a family business, Walter
Tosto has the privilege of not having
a structured plan for return on
investment. Could be two years,
could be seven it all depends of the
market conditions, says Luca Tosto.
In 2013 we've registered 5 million
in revenue, while for 2014 we expect
65%
EU countries
20%
non-EU markets
15%
domestic market
EXPORTS
MADE BY
FECNE:
to grow at more than 7 million, in
order to reach 20 million in short
term.
With improved produc tion capacit y
and a new, motivated team
consisting of experienced workers
and new recruits, FECNE was ready
to honour the orders received, via
Walter Tosto, from big players such
as OMV-PETROM, GAZPROM,
URALHIMMASH, NINGBO,
ROMINSERV, ROMPETROL,
PETROTEL LUKOIL, etc.
Walter Tosto deliver its produc ts in
over 50 countries, all over the world.
But today's most important clients
are from the CSI countries. When
asked about the particularities of
the business relationships with
this countries, Luca Tosto explains
with a smile: Fi rst, there are t he
cultural differences, including the
language, which make things a little
bit diffic ult. Then, they have pi les
of PROJECTS and money, which
make things a little bit smoother.
WE ARE
PREPARED
TO OFFER
THE
MOON, IFREQUESTED.
AT A COSTLuca Tosto,
CEO FECNE
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INDUSTRY INSIGHTS / SPRING 2014 / COMPANIES
But, because they have the founds,
they are also used to request the
impossible. And you have to be ready
to give them the moon if that's what
they ask for. And we are prepared to
do it. At a price.
Here, at FECNE, we want to
replicate the type of infrastructure
we have in Italy. There, we have
a workshop in Chieti and one in
the port of Ortona for logistics
purposes. In Romania, we have the
FECNE factory here, in Bucharest,
and we'll build soonest a new
workshop in Oltenia for an obv ious
reason: logistics working with such
big items, we need to have direc t
access to the ships, reveals Luca
Tosto the company's development
plans, and you can read in his eyes
that he is proud of the legacy from
his father and is determined to make
his mark by developing the Walter
Tosto company.
FECNE
WELDINGSCHOOLAt FECNE, Luca Tosto set up a
welding school for youngsters.
They are trained in different
types of welding during a
three-year course. A young
apprentice earns little over
800 lei per month, while a
graduate of the whole coursecan earn a monthly salary
of 5.400 lei. Skilled students
receive special training in Italy.
In order to attract youngsters
from all over the country, the
company is also refurbishing
a building which shall be
transformed into dormit ories.
FECNE
MASTERCOURSESWalter Tosto has a good
experience in training on the
job professional people, in fact
we have signed an agreement
with the Polithecnic University
of Bucharest and the Faculty
of Engineering in Italy, and we
will start during 2014 to train
15 youngsters and we will
employee all of them in the
very next fu ture.
FECNE'S
EQUIPMENT
INCLUDES:- bridge crane which can lift
800 at once
- bunker with nuclear
accelerator, used for X-raying
items as large as 700mm in
thickness
- 30m-long oven
- plate bending roller up to
300 mm thk (2nd largest in
the world, after t he one of WT
Italy)
- complex CNC milling machine
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INDUSTRY INSIGHTS / SPRING 2014 / COVER STORY
AMBITIOUS PROJECTS
AND REGIONAL
DEVELOPMENT
S.C. CONPET S.A. is the concessionaire of the National
System of Transport of crude oil and derivatives (rich
gas, condensate and liquid ethane) by pipeline.
IICONPET ended the year 2013 with
the best financial results in the last
five years. What were the main factors
contributing to this success?
LI Two main factors contributed to therecord turnover registered by CONPETin 2013: higher income from transport
activities and revenues from related activities.
In 2013, compared with the previous year, we
benefited, on the one hand, from the increase
in transportation tariffs for crude oil from
domestic production and, on the other hand,
from the capitalization of some non-core
activities.
Moreover, in 2013 we've implemented a set of
cost-cutting measures, with positive impact on
the financial results of the company.
Cost tracking and optimization was a
priority for the management and, therefore,
since January 2013, cost centres were
restructured; costs are now allocated by area
of responsibility, following the main activities
of the company (transport of crude oil from
domestic production and from import), and
by the organizational structure (regionally
and, within regional divisions, by sectors
of activity). Through the reorganization of
the cost centres by regional divisions and by
sectors of activity, we aimed to increase the
accountability of the decision-makers at these
levels.Cost-cutting measures targeted mainly the
reduction of general administrative costs
(raw materials, fuel consumption, protocol,
advertising and sponsorship expenditures);
some activities were restructured, the
consequence being the lay off of some staff.
How is set the tariff for the transportcrude oil and derivatives through theNational Pipeline Transport System?
There are differentiated fares for the
transportation of crude oil and derivatives
through the two subsystems (Country
Transport Subsystem and for the Import
Transport Subsystem) of the National Pipeline
Transport System. Shipping rates are approved
by the National Agency for Mineral Resources.
Transport tariffs are based on fixed and
variable costs required to ca rry out the
activity in a safe manner. Fixed costs include
costs of materials, personnel costs, pipelines
maintenance, electric power, gas and water
expenditures, as well as the depreciation of
fixed assets. Variable costs include expenses
with the railway operators, petroleum royalties
upgrades. The transport tariff includes costs
calculated per tonne of product transported,
plus the profit rate.
What percentage of the CONPET's shares is
traded on the Bucharest Stock Exchange
(BVB)?
Of the total of 8,657,528 shares issued by CONPET
S.A., 11.58% are available to be publicly traded in the
BVB (1st Tier the free-float of the company). The main
shareholder, the Ministry of Economy, holds a stake of
58.71% in the company, and the remaining 29.70% of
shares are held by Fondul Proprietatea.
W
hich are the main domestic and foreign
customers of CONPETOur main customers are OMV Petrom SA Bucharest,
representing with a share of 85.5% of the total quantity
transported, Petrotel Lukoil SA Ploiesti, with 14.35%,
and Rompetrol Rafinare S.A. Constanta, with 0.15%.
These are CONPETs main, steady customers, however,
over time, we have carried out contracts with foreign
customers as well, such as NIS Gazprom Neft, for the
transport of crude oil from Romania to the Pancevo
refinery in Serbia.
What percentage of the crude oil transported by
CONPET comes from domestic production and
how much from import?
71%, or about 4 million tons of the crude oil transported
by CONPET, is from domestic production. Transport of
imported oil accounts for 29%, which means that about
1.7 million tons passes through the Import Transport
Subsystem.
What about different types of transport systems
pipes versus railway?Of the total of about 5.7 million tons transported yearly
by CONPET, roughly 1.3 million tons are transported in
tank wagons, which means that the transport via railway
represents 23%.
What do you take into consideration when you
select the partners for rail transport?
The procedure for the award of contracts for the rail
transport services comply with the principles of the
legislation in force. Thus, within the limits set by law, a
contract for the transportation of oil and rich gas by tank
wagons is awarded to the tenderer which demonstrates
its technical ability to provide the transport service and
offers the lowest price.
Our focus is to provide transportation in the best
possible safety and quality conditions, so that the
crude oil supply to the refineries be in accordance with
contractual provisions.
What can you tell us about the agreements andopportunities to connect CONPET's pipes withother oil transport systems?
For CONPET, the concessionaire of the Crude Oil and
Derivatives National Pipeline Transport System (rich gas,
condensate and liquid ethane), is a priority for the coming
years to identify and capitalize on large-scale projects
that would connect our oil transport system to the pan-
European one, this representing a good opportunity for
growth and for higher profitability of the company.
CONPET SA
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INDUSTRY INSIGHTS / SPRING 2014 / COVER STORY
The most important project in this regard
is the Constanta-Pitesti-Pancevo crude oil
pipeline, a first step in interconnecting thenational crude oil transport system with
the regional systems, and in the offing, with
the European one. Thus, in this moment,
the main objective of the
company is to be involved
in the construction of the
Constanta-Pitesti-Pancevo
pipeline, an alternative
route for the crude oil supply
to Pancevo refinery, with
possible to Bosanski Brod,
Bosnia. We look forward to
a consent expressed by the
Board of Gazprom Neft, to
be able to advance in this
direction.
Our company can play an
important role in the construction and in the
stage of normal operation of the pipeline which
will link Consta nta and Pancevo, by using
the excess capacity of the existing crude oil
transportation network (Constanta-Pitesti)
and by providing technical and logistical
support as well as specialized personnel.
It was a time when the theft from oilpipelines represented a real problem.What is the situation now?
As the sole operator of the Crude Oil and
Derivatives National Pipeline Transport
System, CONPET SA always had to deal withcrime, consisting of damage to pipelines,
followed by massive theft of oil and significant
pollution of the environment.
By late 1999, however, the
attacks on the pipeline have
taken an unprecedented scale.
Since the security solution used
at the time (pipelines were
guarded by private security
companies) proved to be
unsatisfactory and the losses
unbearable, CONPET turned
itself towards State institutions.
Following our approaches, the
Romanian Gendarmerie has
been in charge with the crude
oil pipelines' security since
2002.
I want to emphasize that the National
Transportation System belongs to the
public property of the State, the network
is of national interest and of strategic
importance. Moreover, in accordance with
the Law 262/2001, S.C. CONPET S.A.
has been declared company of strategic
interest.
The implementation of the military guard,
with CONPET's financia l support as well,
led to a rapid and significant reduction in
the frequency of the attacks on pipelines.
The dynamics of the crime phenomenon
demonstrates an obvious correlation between
the actions taken by the gendarmes and the
decrease in the number of crimes.
Romanian Gendarmerie is not only the sole
public institution that can legally provide
security services, but it is also the only law
enforcement organization able to effectivelycombat the proliferation of this type of crime,
which is very dangerous because the offenders
are specialized and their actions are specific to
the organized crime.
What measures are taken for theprotection of the environment and toensure the transport safety?
Through an extensive programme of repairs
and investments, we have significantly reduced
product loss and accidental pollution occurred
as a result of technical damage caused by pipe
corrosion. Also, for the operation, monitoring
and maintenance, under optimal conditions,
of the Crude Oil and Derivatives National
Pipeline Transport System, our company has
carried out improvement works to secure theinfrastructure for water crossings.
In order to prevent accidental pollution,
sectors were provided with specific equipment
and materials for rapid intervention, to
minimize the environmental impact and to
restore the soil to its original condition.
CONPET has also contracted, for all operating
areas, companies specialised in the greening of
land and water courses, which have all permits
and licenses required by law to conduct such
ecological activities.
CONPET monitors the entire Crude Oil a nd
Derivatives National Pipeline Transport System
with its own personnel, and since 2002 the
pipes have been guarded by gendarmes. The
result of these security measures is a decrease
in the number of crimes and the reduction of
environmental pollution.
I'd like to mention that, in 2007, the company
implemented an Integrated Management
System for Quality-Environment-OHS, with
operational procedures that define the pumping
parameters, so that the transport be carried out
safely, without environmental impact.
Please give us a few details about thecompany's financial situation. Whatexpectations do you have for 2014?
In 2013, turnover increased by 4% compared
to 2012, while the gross profit grew by roughly
3%. For 2014, we aim to achieve a turnover
higher by about 3% than in 2013, and an
operational profitability rate of 7% vs. 8% in
2013.
The decrease of the profitability rate in
2014, compared with 2013, is caused by the
changes in the tax code, applicable from
January 1, 2014, which affects the company's
financial results. The new tax on specialconstructions and a greater volume of repair
and maintenance works compared to previous
years, imposed by the need to ensu re the safety
of the Crude Oil and Derivatives National
Pipeline Transport System, will have a negative
impact on company's profitability this year.
What can you tell us about CONPET'sdevelopments plans?One of the main objectives for the next
period is to find alternatives to the decrease
of the volume of activity; t herefore, we focus
on long-term investments and projects,
targeting growth of the company and
improved efficiency. CONPET's management
aims to develop some ambitious projects,
here being included the implementation ofthe Leak Detection and Location System,
Modernization of the Cathodic Protection
System, and to improve company's
performance by implementing the Energy
Management System, in accordance with the
requirements of SR EN ISO 50001:2011.
All these area s of development need to be
addressed in order to maximize CONPET's
profit, to the benefit of our employees and
stockholders.5.7million tons of crude oil are
transported yearly by CONPET
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INDUSTRY INSIGHTS / SPRING 2014 / COMPANIES
T
he first electric power
distribution and supply
company after 1990 was
named RENEL (Regia
Autonomde Electricitate). The
company had a monopoly in
electricity production, transmission,
distribution and supply in Romania
and had an installed production
capacity of approximately
20,000 MW. In 1998 RENEL
was restructu red and divided
into three companies: CONEL,
Nuclearelectrica and RA AN
(Regia Autonompentru Activiti
Nucleare).
Since 1998, the company that took
over all the generation, transmission,
distribution and supply facilities
of the former RENEL was
CONEL Compania Naionalde
Electricitate. The company had
three subsidiaries, Termoelectrica
specialised in generation of thermal
and electric power from fossil
fuels, Hidroelectrica specialised in
generation of electric power from
renewable sources especially hydro
power plants and S.C. Electrica
S.A. specialised in the supply and
distribution of electric power.
In 2001, Electrica Group was
established comprising 8 distribution
and supply subsidiaries, covering the
following areas: Transilvania Nord,
Transilvania Sud, Muntenia Nord,
Muntenia Sud, Moldova, Oltenia,
Dobrogea and Banat.
In 2005 S.C. Electrica S.A. privatised
four of its subsidiaries namely
Moldova, Oltenia, Dobrogea and
Banat by selling 51% shares in each.
The S.C. Electrica S.A. Oltenia branch
was sold to the Czech company CEZ
Group, while the S.C. Electrica S.A.
Moldova branch was sold to the
German company E.ON. The S.C.
Electrica S.A. Banat and Dobrogea
were sold to the Italian company
Enel. In 2008, Enel also bought a
64.4% stake in S.C. Electrica S.A.
Muntenia Sud, the largest of S.C.
Electrica S.A. subsidiaries. In
2005 and 2007, Electrica initiated
the transfer by operation of law to
Fondul Proprietatea stakes of 22%
in each of: Electrica Distributie
Transilvania Nord, Electrica
Distributie Transilvania Sud,
Electrica Distributie Muntenia Nord
and Electrica Furnizare.
In 2005, Electrica Serv was created
as a standalone company from the
energy services divisions of the
Electrica Group.
In 2007, all the Electricity
companies in Romania unbundled
of the distribution and supply
businesses, in acc ordance with the
legal requirements.
Electrica Furnizare was set-up in
2011 following the merger of the
three supply companies.
In 2012, Electrica Serv was spun off
into 6 energy services companies.
Electrica Group's mission is to
increase efficiency in the field
of electricity, especially in areas
where the group is the current
distribution operator, through high
quality services at reasonable prices,
both as a partic ipant on the free
energy market and as a provider of
complementary services.
S.C. Electrica S.A. is a Romanian company,
100% state-owned and the parent-company
of Electrica Group, specialised in electric
power distribution, supply and services.
In 2000, Electrica was established as a stand-alone
company post restructuring of CONEL. CONEL
had been created in 1998 as a holding company
concentrating all the players in power generation,
transmission, distribution and supply in Romania.
Electrica
PROFILE
OF A MARKET
LEADER
POWERTRANSFORMER110/20 KV
INCRISTIAN 18 (25) MVA
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The company has around 438
electric power stations, 25,600
power transformers and a network of
approximately 116,500 km of power
lines.
Electrica supplies electricity all over
Romania to 3.6 million customers.
The energy market was fully
liberalised for non-household
customers at the end of 2012 and will
gradually liberalise for household
customers by the end o f 2017.
After the privatisations, S.C.
Electrica S.A. owned minority
shareholdings into the following
companies: Enel Distribuie
Dobrogea, Enel Distribuie Banat,
Enel Distribuie Muntenia, Enel
Energie SA, Enel Energie Muntenia
SA, E.ON Moldova, E.ON Energie
Romnia, as well as Electrica
Soluziona, Bursa Romnde
Mrfuri and Hidro Tarnita. Since
april 2014, these shareholdings were
spun-off to another 100% state-
owned company.
Currently, the Electrica Group
has three distribution companies
Electrica Distributie Muntenia
Nord, Electrica Distributie
Transilvania Sud and Electrica
Distributie Transilvania Nord, one
Electrica Group
is the leading
player on the
electricitysupply market
in Romania
(regulated and
competitive)
with a market
share of 22%
Distribution
Market Players
IOANROCA GENERALMANAGER,
S.C. ELECTRICA S.A
S.C. ELECTRICA S.A HEADQUARTERS
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Electrica
Group is
the leading
player on
the energy
servicesmarket in the
area where
Electrica is
the current
distribution
operator,
with a market
share of 65%
In accordance with Government Decision
no. 85/2013, S.C. FDEE Electrica S.A.,
leading player on the electric power
distribution and supply market in
Romania and the major player in the
energetic services sector in Romania
will be privatised through an Initial
Public Offer (IPO) for the sale of newly-
issued shares amounting to 105% of
the existing share capital, under the
coordination of the Ministry of Economy
in Romania, through the Office of State
Ownership and Privatisation in Industry,
and with the admission of the companys
shares on regulated markets operated
by the Bucharest Stock Exchange.
electrical power supply company,
Electrica Furnizare and 6 services
subsidiaries: Electrica Serv and 5
other energy services companies that
are currently under restructuring
and/or liquidation.
Electrica Group is the leading player on
the electricity distribution market in
Romania with a market share of 38%.The three distribution companies
owned by Electrica are:
Electrica Distribuie Transilvania
Nord that serves six counties
located in North Western Romania
namely Bihor, Bistria-Nsud, Cluj,
Maramure, Satu Mare and Slaj
which covers an area 1.16 million
users and 34,160 km2;
Electrica Distribuie Transilvania
Sud covers an area of six counties
located in central Romania namely
Alba, Braov, Covasna, Harghita,
Mureand Sibiu counties which
covers an area 1.06 million users and
34,100 km2;Electrica Distribuie Muntenia Nord
which covers an area of six counties
located in northern part of Muntenia
namely Brila, Buzu, Dmbovia,
Galai, Prahova and Vrancea
counties which covers an area of 1.2
million users and 34,000 km2.
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STATE OWNED
COMPANIES MUST ACT
LIKE THE PRIVATE ONES
Electrocentrale Bucuresti S.A. (ELCEN), the largest heat
producer in Romania, with a shares of 40% at national
level, providing 7% of the electricity produced in the
country, enters a new sign: the sign of changes. As of
31st of March, the state owned company supplying heat
to Bucharest and Constanta has a new general manager:
Gabriel Ignat. Ignat has set some ambitious goals and
a challenging mandate: to lead the company through aspin-off and, then, through a merger process. All these
in less than one year, in a continuous changing market
context. Gabriel Ignat, ELCENs new General Manager,
speaks about the changes that the company undergoes.
He is 33 years old and he spent the
last nine years in the energy field,
he comes from the private sector
and is not part of any political
party. However, Gabriel Ignat was nominated
by the Minister Delegate for Energy, Rzvan
Nicolescu, to manage ELCEN in probably the
stormiest period in the companys history. Ithink they needed someone from the private
sector with a technical background, a minimum
knowledge in the energy sector being essential,
and proved managerial skills in order to
impose a new working method increasing the
companys efficiency, said the new general
manager of Electrocentrale Bucuresti S.A..
IIHow is a state-owned company seenthrough the eyes of a man who camefrom the private sector?
Gabriel Ignat: No matter who the shareholder
is the state, another company, a private
individual or a g roup the objective should
be the same: profit, says Gabriel Ignat. But
for this to become a habit, we need to change
mentalities. And to change the way a company
acts, especially one with a high number of
employees and an average age over 45 years, you
need fresh blood, added the ma nager.As for his new position, Gabriel Ignat says
that it is one that firstly requires internal and
external communication skills. Internally,
the employees were used to execute orders
without discussing, the stimulation of a two-
way communication being necessary upwards
and downwards - as it is impossible for one
man to make all decisions and have all ideas.
At the same time, as the new manager says,
ELCEN is not a solitary runner; it acts on a
market where other players are also present,
whether they are partners or competitors. If there is no
communication or the communication is poor, the results
will be bad decisions, a strategy that ignores the realitiesof the market and the particularities of the field where
we operate. The manager of a company who does not
communicate efficiently is like the captain of a boat adrift
who lost contact with the residence harbour, with the
passengers and with the other boats sailing on the sa me
seas.
It is obvious, says Ignat, that we assist to a revolution in
the energy sector, the market has changed at a fast pace.
Unfortunately, I believe that the state owned companies
lack the vision and I am not necessarily referring to
ELCEN. They were accustomed to a certain inertia,
reacting late and, sometimes, too late. From this point
of view, I can only say that the market is changing and
the state owned companies must act like the privatecompanies, i.e. to adapt to the market.
In order for ELCEN to become a more flexible
company, with greater responsiveness, the actions of
the electricity and heat producer will be transferred
from the Department for Energys portfolio within
the Romanian Government to the local authorities
portfolio. The first step will be ELCEN split in three
companies: S.C. Electrocentrale Bucureti S.A., S.C.
Electrocentrale Constana S.A. and S.C. Electrocentrale
Titan S.A. Electrocentrale Constana is CTE Palas, while
Electrocentrale Bucureti S.A. will keep Grozveti,
ELECTROCENTRALE BUCURETI SA
Gabriel Ignat, General Manager of
Electrocentrale Bucuresti S.A. (ELCEN)
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Sud, Vest and Progresu power plants, and
Electrocentrale Titan will manage Titan andFntnele.
The next step for ELCEN will be the merger
with RADET Bucharest, the company
managing the transport and distribution of heat
to the population of Bucharest, subordinated
to the Municipality of Bucharest. I can only
say that the merger will be beneficial for both
companies. From an operational perspective,
having both the distribution and the production
under the same umbrella means having all the
necessary tools available for making the activity
more efficient, explains Ignat.
The new company resulted after the merger
would have a higher capital and the necessary
means to find and direct the investments
towards the critical points. At present, giventhe fact that the heat produced by ELCEN
goes almost exclusively to R ADET, the relation
between the two companies is very tight.
However, they are two different companies
acting differently. The integration of the
production, transport and distribution in the
same company would lead to the internalisation
of problems that could be solved quicker and
easier.
IIWill ELCEN's profitability be affected?On one hand, the executive management
and the Board of Directors must take into
consideration certain aspects: it`s aboutELCEN`s main business satisfying one
basic human need: heat. In such case, the
profitability must be also seen in the light of the
social impact, thinks Gabriel Ignat. On the
other hand, we have a regulated price for Gcal
and ANRE tries to keep it as low as possible
in order not to affect the population, however
the high price of natural gas, with increasing
perspectives for this year, in my opinion, puts
too much pressure on the producers which
ultimately has an impact on profitability, adds
the general manager.
In order for the new company to operate more
efficiently, first of all, investments are necessary,
points out Ignat. An example to follow is CHPP
Vest operating in a combined cycle (gas turbine,recovery boiler and steam turbine), producing
both heat and electricity, being the most
efficient installation of ELCENs equipment.
In terms of investments, at national level,
the district heating is 3-5 years late behind
the moment the financing should have been
secured and the retrofit programs implemented.
Looking at the current legislation and the
existing cogeneration bonus, I find it very hard
to imagine that we will easily find investors and
banks to invest in this field, says the manager.
Currently, the cogeneration bonus, a mechanism
designed for sustaining the investmentsin efficient heat and electricity generating
capacities, is expected to be granted until 2023.
Given that it is unlikely for an investment in
the energy sector to be totally recovered in
just nine years, one solution could be to extend
the cogeneration bonus award period, on the
model of other European countries, believes
Ignat. The bonus award scheme should be
reconsidered in order to really stimulate the
activitys efficiency. The aim should be to reduce
the production cost and not to subsidize a high
cost, says the manager.
The installation costs of a power plant reach
approximately 900.000 - 1.000.000 EUR/MW,
Exploitation of
energy resources
In terms of energy and energy
security, the exploitation of any type
of new resources will gain ground.
For example, in the context of the
current geopolitical situation, the
idea of exploiting shale gas. Over
time, the humanity went thr oughkey moments when we had to make
certain decisions. Now, we have to
make decisions at a macro level by
referendum or by any other method
they will be made. But when you are
facing a storm, you must choose the
lesser evil. The society will have to
choose between an energy security in
conditions of reduced costs and risks
associated with the dependence on
another state and the possibility to
increase the cost of fuel.
Gabriel Ignat - CEO ELCEN
The manager of a company whodoes not communicate efficiently
is like the captain of a boatadrift who lost the contact withthe residence harbour, with thepassengers and with the otherboats sailing on the same seas
Gabriel Ignat in the Turbine
Hall of Grozavesti Thermo-
Electric Power Plant
Turbine Hall,
Grozavesti Thermo-
Electric Power Plant
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INDUSTRY INSIGHTS / SPRING 2014 / COVER STORY
Another solution to attract investors would
be, according to Gabriel Ignat, to give the
cogeneration bonus also for the installation ofsecond-hand units, as, during the last 3-5 years,
the technology did not evolve in such a way
so as to fundamentally change the degree of
efficiency of the heat and electricity generating
installations.
An essential factor that will influence the
production cost is the imminent liberalization
of the natural gas market given the fact that the
I believe that in the future,
maybe in the next 20-30years, the cheapest energy
will be the electricity the
sole supply source for all
the equipments that we
use in our everyday life. The
electricity can be obtained
from many sources,
including renewable sourcesand can be transported
cheaper than the gas,
gasoline or diesel.
Control room of the
Grozavesti Thermo-
Electric Power Plant
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29
YOU MUST IDENTIFY
YOURSELF WITH
WHAT YOU DO
Businessman, politician and the interface between the two, Mr.George Seculici is a man true to his passion: architecture. President
of the Chamber of Commerce and Industry of Arad, Mr. Seculici is
also the General Manager of a major design studio: Proiect Arad.
PROIECT ARAD
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importance to me and my company. As G. M.
Cantacuzino said, "Architecture represents
the culture and civilization of the period in
which you live. Of course, in time, expertiseand experience helped me to successfully
overcome the potentially delicate moments,
thus contributing to the clients satisfaction,
but also to the fulfilment of some projects that
made history in terms of architecture.
Which was the most difficult project and why?
With an experience of over 50 years, the
company had undoubtedly numerous difficult
projects to accomplish, not just one. I am
talking about the complex ones, those in
the field of urban planning, infrastructure,
industrial and cultural projects, civil buildings,
art works and more.
IIWhich of the projects remained theclosest to your soul?Each and every project born from my work andideas is close to my soul. These are the kind of
projects in which you put a piece of yourself, of
your thoughts, of your very own visions. Each
project gives me a great satisfaction every time
I simply look at it.
IIIs there any project you regret itwasnt materialized?Definitely. Block J in Arad Station Square was
never finished, being a project that has been
thoroughly studied in terms of architecture
and urban planning.
IIFor five months, you have been amember of the Government, occupyingthe position of Deputy Prime Minister. Why
for such a short time?I must admit that I've been involved for a
rather long period of my life i n politics. For 15
years, I was one of the leaders of an importa nt
political party in the country, but especially
in Arad. The short period you are referring
to is the result of the way the Government
operates, and this reshuffle is part of its proper
operation. My place is actually at Arad; here I
truly feel at home.
IIWhat does Romanian economy looklike from an official position in theGovernment? What about your position as
President of the Chambers of Commerce?
In 2005, from the official position in the
Government, economy seemed full of promises.
Economy was blooming back then, and ourcountry had serious opportunities to succeed.
Today, as the President of the Chamber of
Commerce, Industry and Agriculture Arad, in
the context of an economic crisis, it is difficult
for me to tell what the real situation of the
Romanian economy. I maintai n, however,
a positive attitude and I do try to help each
company to access useful information and to
provide the necessary connections to develop
the respective business; this is our institutions
main target as well.
completely identify yourself with what you
do. Over the years, I have been often involved
in other types of activities, especially those
of public interest, and I have rarely limited
myself to architecture. Architecture remained,
however, the closest to my heart.
Proiect Arad is one of the most prestigious
design companies in Western Romania, a
company founded in December 1957, following
the decision of the People's Council of Arad,
called "The Direction of Systematization,
Architecture, Desig n and Construction
Banat-Timioara, Arad branch". Over time,
the company was known by several names:
Design Institute of Arad County, The
County Arad Design Center or S.C. Proiect
Arad S.A.
Starting with 2013, the company was divided
in two, Arad Proiect S.A. Project and Proiect
Real Estate. The reason for this division was
purely economic, and sought a more effective
management of each bussiness segment.
Proiect Arad's portfolio included projects
for most of Arad's districts, as well as for
other cities in the county. Some of the most
representative socio-cultural buildings in
the county, including the public open-airswimming pool, at that time ranked as the
largest in Western Romania and one of the
largest in Europe. This project represents an
impressive business card of our company, as
well as for thee Municipality of Arad.
After 1990, the company has designed some
of the most representative industrial, cultural,
residential, agricultural, infrastructure and
urban planning objectives in the county.
Through its work, Proiect Arad put its mark
on Arads architectural landscape, at the
same time contributing to the sustainable
development of the region. The company
continued its tradition, always aiming for
excellence and constantly extending its field
of activity, by improving and diversifying theservices provided.
IIProiect Arad has been involvedin various architectural projects,desiging different types of buildings, from
the industrial and civil ones to churches.
Which were the most difficult clients: the
civil servants, private entrepreneurs or the
church representatives?
We have never called our clients "difficult". I
have realized the relevance of the construction
for each client, as well as the projects
Proiect Arad
headquarters
Public building
in Arad
ANL residential
project
Orthodox
cathedral in Arad
Expo Arad
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INDUSTRY INSIGHTS / SPRING 2014 / COVER STORY
Connect Group supplies the best Electronic Manufacturing Services
to a broad range of markets, supporting its customers in the design
and production of cables and cable-harnesses, PCB assembly and
testing, and final product assembly and test. The Belgian company is
one of the largest employers from the Western Romania, while its
factory in Oradea is the largest in the group. Mr. Flor Peersman, COO
of Connect Group, revealed us the strategy behind company's success.
II
The phrase technology as a service
flies over the internet, being used asa marketing tool to promote various IT
services, especially software, maintenance
and know-how; however, Connect Group
uses the word service for hardware
solutions. What can you tell us about the
TiaS (Technology is a Service) concept
and slogan that defines the Company's
strategy?
Flor Peersman: I am glad you ask me this
question as the first one, as the definition or
maybe the interpretation is completely wrong.
TiaS indeed stands for Technology is a Service,
but within our Group's strategy it means
something else than a service on hardware
solutions.
Being a sub-contractor over the last 25 years,
we did build up a huge portfolio on experience
and expertise.
Back in 1987, we started as a sub-contractor,
building products based on customers'
requirements, and often even with client's
materials.
The first step on our roadmap was to build
logistic competence, thus being able topurchase components based on customers'
requirements and specifications, and to deliver
the products within very short notice.
The second step was the establishment of an
Engineering division, offering our customers
a support in the industrialisation of their
product and services. Nowadays we reached
the stage where we are able to develop new
products starting from just an idea. In the
coming years we will extend this activity.
Besides that, we will focus more and more
CONNECT GROUP
DIFFERENT CLIENTS,DIFFERENT STRATEGIES
PCB Division
Flor Peersman -
COO Connect Groupon power electronics, sensor technology, data
management and visualisation. This leads
to our strategic decision to offer a completepackage of products and services to the
market, under the name of TiaS.
Based on the evolution of the Group we can
offer our customers complete solutions, from
the very beginning of engineering, production,
assembling and testing stages, providing
product management through the entire life
cycle of the said product. In this way, the life
of a product shall be extended, which will
bring the cost of ownership down.
IIConnect Group tailor its products tocustomers' needs. If the productsmade by the Group were clothes, would
they be custom made, made to measure, or
off the shelf type of products?
Each and all of the above. We use manydifferent logistic approaches offering our
customers a way of working that suits their
needs. This is indeed the combination of
almost all existing Logistical methodologies. It
is very challenging for our colleagues from the
Logistics Department, but for our customers, it
is easy to choose from a variety of services, as
we can offer them a la carte" support.
IIHow do you select your customers,and how do you convince them tochoose Connect Group?
We have a dedicated and focused market
approach on 5 segments. Railway, Semicon,
Healthcare, Agriculture and Professional.
The combination of our track record over the
last 25 years (customers are calling us) and
the focussed market approach via our Sales
crew (trained and specialised in their market
segments) is the key to success.
IIConnect Group has a centralizeddesign, engineering and R&D team?Where (if) pops-up the input from
manufacturing facilities?
The ongoing and continuous challenge for
the Operational organisation is to give an
efficient answer to the customers expectations,
trying to exceed them by avoiding potential
internal delays. Communication and a
military discipline, with an evangelic respect
of processes and procedures are key in the
exchange of knowledge and experience.
IIHow difficult is it to design a circuit
board, for example? Please tell us a
bit more about the design process and the
importance of customers' input/feedback.
All starts w ith a good understanding of the
customers ideas and expectations. With the
support of our TiaS team , customers ideaswill be transformed into a prototy pe. Not only
we will offer some improvements on the level
of component selection, we even suggest to
the developers potential functional changes.
We guarantee full DFX (De sign for Excellence
(X = Manufacturabilit y, Testability, Cost-
Effectiveness).
The delivery of a working prototype proves we
understood our customers' needs.
IIConnect Groups provides
technological solutions for different
industries from Railway and Energy to
Healthcare. What particularities have
these industries and which is the link
between them?
Different markets require different expertises.The link between them is the wide base of
competences build up during many years.
However, the reason why we are chosen a mong
other providers in most of the cases is the fact
that we installed Certified Manufacturing
Facilities with trained and specialized
operators for each and every specific field.
IIWhich was the most demanding
project in which Connect Group has
been involved?
Recently we had to redesign to cost a for the
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railway market. For the Group, this project
was challenging at al l levels. We used this
opportunity to push our organisation to a
higher level, by enabling new manufacturing
processes, logistic flows and supplier
selection criteria. At the end of this project,
the final customer was so impressed by our
work flow and the way in which this project
was managed, that he honoured us with an
impressive order, the very first one obtained by
the Group in this specific market segment.
IINot that we are complaining, but...
why did you chose to invest and build
production facilities in Eastern Europeinstead of an Asian country, for example?
And what distinct advantages did you
found in Romania?
As you will f ind in all our communications and
strategic mailings, proximity and flexibility
is the key to success. The combination having
a strong technical group of colleagues with
a competent group of operators in a low cost
country was very important, but also the time
of delivery is key to our success shipping from
overseas sometimes simply takes too long.
IIWhat was the biggest challenge
you've encountered in Romania?
Dealing with the administration and customs
was biggest challenge during the sta rt up
of our company. On the other hand, for the
management, is was a blessing we could
find so quick well trained, enthusiast and
flexible workers, supporting us through this
challenging period.
IIThe factory near Oradea is the
largest one in the Connect Group.
Connectronics Romania employs about
0.5% of city's total population was it
difficult to recruit the right staff?Our factory is the largest one not only form
the Group: since many y ears we are honoured
by the local Government as being the largest
employer within Oradea.
As said earlier, find ing good people was not
the biggest challenge. We started the company
with 8 people, of which 7 are still in our tea m.
Octavian Malan, our Operations Manager
for the EMS division and Adrian Pop, the
Production Manager for the CWS, were
from day one in charge and responsible for
PCB Division
By this way, I would liketo thank you for givingme and the Connect Groupthe opportunity puttingour Romanian colleaguesin the spotlights.Flor Peersamn
the growth in
Oradea. A close
cooperation with
local authorities
and Universities
is the key to
engage good and
competent people.
Internal training
projects within
the Group, where
our Romanian
colleagues can
increase their competences by exchanging
experiences with their Belgian, Dutch, German
and Czech colleagues, enable them to support
the projected growth of themselves and the
Romanian subsidiary.
IISome of the companies opt for local
management for their overseas
operations, while others deploy their own
staff; What is the situation in Connect
Group in Romania, for example, the
General Services Manager is a local Mr.
Ioan Clin Vea.
From the beginning, it has been the goal and
mission underlined by the Belgian Board toinstall a local Management with full authority
on all business processes. This mission has
been fulfille d by training, support and mostly
by the motivation based on mutual trust and
fair cooperation.
Our local
Management is
working with
mutual and yearly
agreed K.P.I.s.
During the regular
follow-up sessions
and European
Operational
Meetings with the
other Operational
Managers, we
succeeded to accomplish Groups objectives
and targets.
IISales force, engineering, corporateculture all of the above areimportant, but which of them is on top of
the others, in your opinion?
From my personal point of vie w, here the
corporate culture is number one. If the
understanding is O.K., if people are happy
to work for their Board, if the work place is a
nice and clean environment, if our Romanian
colleagues have the possibility to be involved
on different activities in Belgium, believe me,
the sky is the limit. All requests to increaseoutput, optimize the throughput, ride over
difficult economical periods, support other
sites on engineering level are done with a smile
if the temperature among people is O.K.Cable Division
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A LOOK INTO THE
FUTURE OF VEHICLE
SAFETY AND ACCESSHuf Romania is a branch of Huf Group, manufacturer of
Car Access, Security and Immobilization components.
Huf Hlsbeck & Frst was founded in 1908 in Velbert,
Germany, by Ernst Hlsbeck and August Frst, as
a family business. The company delivered its first
products for the automotive industry in 1920s, to
Mercedes. In 1988, Huf produces the first key with
remote function on the German market, for Mercedes-
Benz. In 1999, Huf develops the first "passive entry/passive go" system. Today, Huf Group has more than
7,000 employees in 19 countries around the world.
In Romania, Huf plant from Arad
manufactures mechanical and electronic
keys, door handles and steering column
locks for Renault/Dacia, MA N, Volvo,
Porsche, Kia, BMW and Mitsubishi, in a
factory with 300 employees. In addition,
the company set up in 2011, in Timi oara,
a research and development centre for
automotive software.
IIWhat does it mean, for you personally,to lead a local branch of one of the
most important manufacturers in the
field? Please tell us a few words about
your career and the circumstances under
which you became General Manager of Huf
Romania.
Ioan Posa: For me personally, this
responsibility is a daily challenge. It started
with the setup of the company in Romania,
period in which I was confronted with the most
diverse tasks: paper work at the Trade Registry,
authorizing first bank payments to companies
that were preparing the location, setting up
the IT infrastructure, connecting the location
to electricity, gas, and water suppliers, the
recruitment of the first employees, installing
the first workstations.
HUF ROMANIA
I graduated Mechanical Engineering and Igot also trained in the electrical field during
high school. In 1999, I joined a multinational
company in the automotive industry, being
the first engineer hired by the respective
company. In a few years, I passed several stages
becoming a member of the management team.
For 6 years, I was exposed to different ways of
dealing with work and interpersonal relations,
being impacted by British and then German
leadership models.
At the beginning of 2006, I got the first contact
with Huf Group, during the interview for
the General Manager position. There were
two things that convinced me to accept this
challenge: first, the fact that Huf Group wanted
to hire a Romanian as a General Manager,being ready to fully trust that person, while
most foreign companies hired expatriates as
General Managers. The second thing that
influenced my decision was the presence at that
interview of a Romanian which was working at
headquarters. Later, I found that we were both
students in Timioara at the same time.
IILast year you inaugurated a new Huf
factory in Arad. How high were the
investments and why was it necessary to
move into a new house?
Huf Group wants to have a plant closer to e verycar manufacturer. In line with this strategy,
there are Huf plants located on four continents:
Asia, Europe, North America and South
America.
In this context, Huf operates in buildings which
are adequate to the manufacturing process.
The plan to build a new factory exists since
2008, when the land was purchased and due to
the financial crisis was delayed for a few years.
The investment in the new building was over 4
million Euros and specific process technology
investment will be done once we win new
contracts.
IIIn the middle of an economic crisis,
Huf Romanias turnover increased
between 2009 and 2010, for about 6times and since then has been quite flat,
at around 20 million Euros. Which were
the factors that influenced that steep
growth? Are the products made in Romania
delivered directly to the clients, or there
are also intra-group transactions?
Huf Romania followed a different development
path comparing to most foreign companies.
From the beginning, the emphasis was on
the development of quality management
system, in compliance with automotive
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industry standards. The objective was to be
able to deliver directly to original equipment
manufacturer (OEM). The transfer of products
from other Huf factories was fairly small
compared to the new projects implemented
in Romania. In 2009, three new projects
were implemented into serial production for
customers: Porsche, Hyundai and Dacia. The
trend continued in the following years.
IIHuf Group is present on almost all
continents. What are the criteria
according to which the production is
allocated to the various companies/
countries (quantity and range of
products)?
Huf Group provides a product portfolio that
is synthesized with an acronym: CASIM (Car
Access, Security a nd Immobilization). Plants
develop skills for different systems according
to the market requirements. An important
element in the decision is determined by the
ability to serve the c ustomer in the best possible
way (proximity, communication, reaction
capacity). Manufacturing processes of certain
products require large investments. In this
case, we need a certain amount of sales in
order to justify the investment and to be able to
allocate the production to a particular plant.
IIHuf Group specialises in access,safety and vehicle immobilizationsystems; how did the company's products
evolve over time?
It started in 1920 with a door lock for Daimler.
In 1935, a new technology was used by Huf
for the first time: die-casting of zinc alloy; in
1976, plastic injection; in 1986, handles made
of moulded plastic and painted; in 1988, first
remote key; in 1999, passive entry systems
and mechatronic systems in 2004. So you see,
products developed over the time according
customer requirements. During the first 60
years the company concentrated on mechanical
products, keys, locks, latches, door handles,
emblems, decorative parts for cars. In the
early 1980ies electronics entered products
which is why today it becomes more and more
important. The company even started to sell
software in combination with their hardware
telematics products.
II
If we were to look back at the
companys history of over a century,what do you consider to be the biggest
leaps in technology and in what period did
they occur?
Die-casting of zamak (Zinc Alloy), plastic
moulding, painting of plastic parts, utilisation
of electronic components, RF communication,
infrared communication and NFC (Near Field
Communication).
IIHow important is the softwarecomponent in a car key, for instance?Did software development lead to a
simplification of the key profile or it is still
important in the vehicle security equation?
In recent years, software becomes increasingly
important in the automotive industry. More
and more traditional mechanical componentsgain electronic subcomponents, which contain,
of course, software (this way appeared the so-
called mechatronic components). The increasing
degree of complexity led to the introduction
of electronic subcomponents, so as to enhance
the traditional mechanical operation and not
necessarily to be replaced. As far as the key is
concerned, the complexity of the mechanical
profile of the blade evolved (today we have
three-dimensional profile keys), in parallel with
introduction of electronic parts.
IICurrently, keyless entry systems are
present only at top models or premium
brands. How much time do you think will
take until we'll see these systems in a
Logan, for example?
Premium automakers and many of the medium
range models already offer Keyless Go system
as standard configuration. The next step will
be to standardize Keyless Entry system in theabove mentioned range and probably with the
next generations, the systems in question will
be offered as an option by the producers of low
cost models.
IIHuf operates a software research
and development centre in Romania;
what are the applications developed by this
office and how does the collaboration with
parent company and other similar centres
works?
The Software Development Centre in
Timioara covers, independently or in
collaboration with other similar offices, the
entire Huf product portfolio: from electronic
and mechatronic products used in the car
access segment (Keyless Entry and Go,automatic closing and opening of the doors
and trunk etc.) to the radio communication
products (remote keys, tire pressure sensors in
wheels).
IIWhy have you chosen Timioara for the
R&D Centre?
Romania in general and Timioara in
particular has been established as a pole
of Automotive Software. Highly trained
academics has provided alumni with a
knowledge base which, combined with
the specific engineering thinking of the
Romanians, has generated "the ideal employee
for such activity.
IIWhat is the relation between Huf
Romania and universities from Arad
and Timioara?
Huf Romania carries out various collaboration
projects with Universitatea Politehnic
Timioara, especially in the practical training
area: internships, support for degree and
dissertation works, but also lab practice. We
are considering the possibility to sponsor a
lab for programming courses, but also the
collaboration on research topics (e.g.: PhD
thesis).
IIDo you provide scholarships or runningany programs that might help some ofthe most talented students?
All the students we collaborate with are Huf
employees and, besides the monthly salary, they
do benefit from many other facilities.
IIHow does the existence of R&D Centre
in Timioara influence the product
range manufactured by Huf in Romania?
Today, the Arad and Timioara product
portfolio are disjoint, the main influence
being the increase of Huf Romani asimportance within the Group, and, more
recently, start of the mechanical design within
the factory in Arad.
IIWhat development plans do you
have for the factory in Arad? What
predictions do you have for the evolution of
the turnover and the number of employees?
In the next 5 years, depending on the evolution
of the market, the turnover is expected to
double and the number of employees to reach
500.
IIDoors that unlock themselves when
you approach the car, trunks with
motion sensors, remote controls... What
would be the next major innovation that will
affect, in a significant manner, the way weenter our personal car?
The automotive industry is in an accelerated
innovation process (it is estimated that the
industry has evolved in the last 10 years more
than it had in the previous 100 years) and thus
being quite diffic ult to anticipate
"the future". One certain thing is that the
mobile phone is becoming an increasingly
important component of the daily life and
we will see it soon a s a component of our
interaction with the car.
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The Belgian IGW Group, formerly known as Watteeuw,
produces gears in Iasi for companies like Rolls
Royce, Atlas Copco, Bombardier and Siemens.
IGW Romania
WHERE THE WHEELS
ARE TURNING
VERTICALLYINTEGRATEDPRODUCTION, INCLUDING
HEATTREATMENTTOENSUREULTIMATEDURABILITY
In 1949, 19-year young A lphonse
Watteeuw opened a one-person
workshop in the elderly house
to start producing gears for
local companies. With the support of
his father - Mr. Henri Watteeuw, a
reputable and respected teacher and
author of many technical papers in
Mechanics the young entrepreneur
succeeded to build up his business
step by step. By 1964, the wheels were
turning for the small family business
located in Bruges, Belgium: the first
contract with an international client
the Swedish compressors producer
Atlas Copco was concluded . In
1992, Watteeuw was acquired by
BMT Group and, since then, the
growth rate of the company found
an accelerated pace. Whilst in the
very beginning all clients were local
companies that needed a small
amount of special transmission
components, it didnt take long
before the great international groups
were knocking on IGWs door for
their customized transmissionsolutions. This interest from Western
internationals fuelled a growth
strategy that created a solid base for
further expansion. It was the start of
a steady geographical expansion: new
factories were opened in Brno, Czech
Republic and Iasi, Romania.
In 1998, IGW took over a part of the
factory of synthetic fibres Terom
in Iai. The Belgian company
has chosen Iai, says Mr. Gigi
Boghiu, General Manager of IGW
Romania, because besides economic
considerations, there already was
a strong industrial tradition here.
Initially, they wanted to invest inIMAMUS Iai, but because of various
reasons they had to refocus and they
decided to take over the mechanics
department of Terom. But synthetic
fibres had very little in common with
the production of gears. Qualified
staff was needed, a nd some of it
was recruited right from the initial
acquisition target IMAMUS.
Another reason for which IGW
invested in Iai was the Polytechnic
Institute; 90% of our engineers
have graduated from this technical
university. And the cooperation
between IGW Romania and local
schools does not stop here. I
encourage the operators to go to
college and, depending on their skills
and vacancies, I try to promote them
as engineers, takes Mr. Boghiu pride
of his HR policy. In addition to this,
all operators attend to development
and refresher courses held by
teachers from the Ion Neculce High
School they need to stay up to date
with the newest technologies and
to understand also our customers
demands. Nor could it be otherwise,
when they are working for the main
supplier of transmission components
for several market leaders in the
machinery, power generation,
compressors, and transport
industries, adds Mr. Boghiu.
Back in 1993, the IGW Group decided
The
Belgian
company
has chosen
Iasi
becausebesides
economic
considerations,
there already was
a strond industrial
tradition here.GiGi Boghiu - General
Manager IGW Romania
PRECISIONENGINEERING;
GRINDINGDOWNTHELASTMICRONS
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to enter the railway industry, one the
fastest growing market segments
currently. A decision in line with their
constant focus on diversification. This
way the group became active in an
array of niche markets in the most
demanding industries in the world.
And after the West came the East.
The flourishing of the Asian markets
began when Western companies
started to outsource some of their
manufacturing capabilities to
these regions. This didnt only offer
changes for economic growth in the
Asian countries, but also caused
the need for better and newer
logistical support. The locomotive
effect of rapid economic growth of
those countries caused the need for
transmission solutions, resulting in
increasing exports to those areas,
and in turn an increase in investment
and production. This was of course
an opportunity on which IGW had
to build. Globalization is happening
and we need to make good use of the
opportunities with which it presents
us and minimize its risks, across
both hemispheres. In 2006 a site was
opened in Suzhou, near Shanghai,
China. It started as a distribution
center, allowing customers in the area
to benefit from shorter lead times
and local customer service. Today
it also serves as a fully operational
manufacturing and assembly plant,
specialized in providing its clients
with products and services catered
to the specific requirements of the
Asian market. The last couple of years
this process repeated in Zanesville,
Ohio, USA, a location which is fully
operational as of January 2014. The
Shale Revolution within the Oil and
Gas industry has shifted investments
in the energy market in the United
States, an opportunity being seized to
the fullest.
Today, IGWs strategy comprises of
providing transmission solutionsto - at least - two global ma rket
leaders from each industrial sector.
Thus, among IGW customers we
can count Siemens and Bombardier
in the railway industry, Atlas Copco
and Ingersoll Rand for gears for
compressors, Rolls Royce and
Wrtsil for the marine industry.
With a global and centralized Sales
& Marketing team, each company
in the IGW Group can calibrate its
I encourage
the operators
to go to
college and,
depending on
their skills
and vacancies,
I try to
promote them
as engineers.
GiGi BoghiuPRODUCINGEVENTHEBIGGESTGEARSFOR
THEMOSTDEMANDINGAPPLICATIONS
CONSTANTQUALITYASSURANCEGUARANTEESCONSISTENTPRODUCTFEATURES
production and stream line costs.
IGW Romania manufactures gears,
mostly in larger, repetitive lot sizes,
the plant in Belgium is specialised in
the production of one-off and heavily
customized solutions (for the largest
machinery and applications), while
the Czech factory is specialised in
the design and a ssembly of complete
transmissions. IGW produces highly
specialized gears, requiring a high-
precision finishing.IGW has been producing gears for
over 60 years, and the company
managed to stick to its original
profile, unlike many others; it
adapted its production to the ma rket
needs and, by remaining committed
to the principle of manufacturing
highly specialized products which
are difficult to compete with, it
has established itself as a ma rket
leader. It has built its reputation for
its commitment to excellence and
innovation, providing high quality,
specialist transmission solutions
in a variety of sectors. The next
challenge? To always keep our staff
engaged, to convince them to try new
things, whether every attempt will
be successful or failures will occur
from time to time; otherwise we will
not be able to make progress, and
progress is essential for the survival of
the company, concludes Mr. Boghiu.
This way IGW will continue to utilize
its strong combination of enduring
principles and proven strategy to
create solid growth platforms to keep
moving forward in the international
environment with increasing
demand for customized transmission
solutions.
COMBININGHIGHLYMOTIVATEDPERSONNELWITHSTATEOF
THEARTTECHNOLOGY
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INDUSTRY INSIGHTS / SPRING 2014 / COVER STORY
45
THE RIGHT TOOLS
IN THE RIGHT HANDS
Set-up in 1833 and being part of the French industrial
group MOB since 1998, IUS S.A. - Brasov ("IUS") is the sole
manufacturer of professional hand tools in Romania.
Mr. Bogdan Ureche, General Manager of Mobius,
guided us through the history and the company,
its strategy and plans for the future.
IIIUS's history could be traced back to1833; how important is the traditionfor the clients of the company?
Mr. Bogdan Ureche:Tradition means
reputation, a trusted brand, and products
and services which shall satisfy customers'
expectations for uncompromising quality. All
this leads to long-term, successful partnerships.
In its 181 years of activity, IUS manufactured
a wide range of dif ferent products. About 80
years ago, the company started to manufacture
hand tools, a product range that would define
the profile of this unique company in Romania
in the following decades. You could say that
the craftsmanship of the artisans which
manufactured hand tools in Bra ov since
1930s has been transmitted from generation to
generation, until today.
IUS can be named, w ithout any hesitation, atraditional brand for hand tools in Romania.
The renowned quality of our products, fair
prices and continuous innovation recommends
us as one of the leading producers of tools for
professionals.
Unfortunately, in the past 10 years the
Romanian business environment, and
especially in the industrial sector, has gone
through changes that ultimately led to a drop
of the value of the Romanian brands. Brand
image (and value) suffers major changes when
user's perception is altered by various factors,
such as: the invasion of imported products, low
purchasing power, flows in the procurement by
tender system, favouring lowest possible price
instead of the best price/quality ratio.
Despite this negative factors, the professionals
using IUS tools are well aware of the quality of
our products and we are confident that we can
maintain our market leader position.
IIAnd for the employees?Being part of a team that manufacturesrenowned products and that continues the
tradition of many generations of craftsmen is
definitely a good enough reason to be proud.
And I know that all our employees, as well as
the management team, have the ambition to
surpass the success of the predecessors, to leave
their mark on IUS products through innovation
and new technologies, and to increase the valueof the brand.
We are all aware of our responsibility and we
don't want to be the generation (or generations)
that might disrupt the tradition of 180 years
because of a sick