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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 its components, 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  [email protected] THE BUSINESS to serve other businesses B INDUSTRY INSIGHTS / SPRING 2014 / EDITOR'S NOTE

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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

    [email protected]

    THE BUSINESSto serve other businesses

    B

    INDUSTRY INSIGHTS / SPRING 2014 / EDITOR'S NOTE

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    54

    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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    76

    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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    9

    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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    1110

    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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    13

    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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    1514

    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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    1716

    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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    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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    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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    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