Romanian Daily

Steady 20% growth for Swedish bearings

IulianBulandra — 2006-07-28T06:14:00+00:00

Rulmenti Suedia, one of the main distributors of the SKF ball bearings brand and of industrial solutions in Romania, estimates a 20% growth pace for its business, comparable with growth seen in the last few years.

"We estimate the company's turnover will this year reach 2.8 million euros. In 2005, we posted turnover worth 2.4 million euros. Rises in turnover are not usually very spectacular in this business. It is a constantly growing business," says Eugen Kaptalan, the company's general manager. According to data provided by the Ministry of Finance, Rulmenti Suedia posted turnover worth over 1.8 million euros in 2004.

Eugen Kaptalan says the company will this year invest in constructing new headquarters and a new hall, scheduled for completion in December.

"The investment revolves around one million euros. We have taken out bank loans that we will pay from our profit, in order to cover the investment. Our company has grown on its own, originating from an idea imported from Hungary," Kaptalan added.

The Cluj-based company offers expert solutions to large industrial companies in Romania. Customers of Rulmenti Suedia include companies such as Kronospan, Tenaris, Silcotub, Carpatcement, Holcim, Somes Dej, Azomures, European Drinks, the Hunedoara-based Mittal Steel and Ductil Steel. The Swedish solutions are distributed by the Cluj-based company throughout Transylvania by local distributors they work with.

"The fact that we offer services and training assistance makes it essential to have our quarters as close to our clients as possible. If us or our distributors have to travel more than 150 kilometres to reach a client, we have not maximised profitability," explained Kaptalan.

"In addition to the new products and services that SKF is bringing to the Romanian market, we are thinking about starting collaborations with other companies and brands as well, broadening our range of services. We have two Dutch companies in mind, Dutchi and Bahco," Kaptalan added.

The main competitors of Rulmenti Suedia on the Romanian market are companies such as Fag, Ina and Timken. Rulmenti Suedia was established in 1998 and is owned by two Hungarian businessmen, Czegladi Sandor and Dohanjos Marika. The company presently has 16 employees.

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"Donau Commodities" Acquires "Laminorul"Braila

IulianBulandra — 2006-07-26T09:22:00+00:00

One in the companies in the portfolio of the State Assets Realization Authority, the Braila-based rolled goods producer "Laminorul," was acquired by "Donau Commodities" Bucharest for 17.5 million euros, ACT Media news agency reports.

"Donau Comodities" was actually the only bidder for "Laminorul," that has so far been subject to five failed privatization attempts.

Of the 17.5 million euros of the transaction, 220,000 euros represent the price of the stake, 10 million euros are development investments, 6.5 million euros - working capital and 780,000 euros -environmental investments.

"Donau Commodities" pledged to keep for a 5-year period the entire 537-strong active staff of "Laminorul" and also take over the company's debts worth 29.5 million lei (1 euro trades for about 3.6 lei).

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Mechel Targoviste Spends 14 Mln RON On Materials

IulianBulandra — 2006-07-26T09:11:00+00:00

Mechel Targoviste S.A. has procured from Mechel Campia Turzii S.A. scrap iron, wire, towing cable, welding electrodes and other materials, totaling 14 million RON. The contract does not mention any collateral, but does stipulate penalties of 0.15 percent per day of delay until the full settlement of the debt. The contract is valid until December 31st, 2006.

"The exact total of the commercial operations to be performed under this contract, as well as the total quantity of deliverables will be announced in an additional report to be made after the finalization of the contract," reads a release from Mechel Targoviste to the Bucharest Stock Exchange.

In turn, Mechel Targoviste sold steel products and other kinds of products to Mechel Campia Turzii for 6.1 million RON. The contract expires on December 31st, 2006. Penalties for delay stand at 0.06 percent per day.

The former Targoviste Special Steel Works (Combinatul de Oteluri Speciale Targoviste) weas privatized in 2002 to Conares Trading, which, one year later, became the operator of the Russian group Mechel for acivities outside Switzerland. In Romania, Mechel also owns the former Campia Turzii Wire Industry (Industira Sarmei Campia Turzii).

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AVAS restructures Aversa

IulianBulandra — 2006-07-26T08:42:00+00:00

Four hectares of terrain belonging to Aversa Bucharest will be sold through tender for covering the debts owed by the company, its activity being restricted to only six hectares, said the president of the Authority for the Recovery of State Assets (AVAS). "Aversa has debts amounting to approximately 30-40 million euros. The privatization process will continue after we make the company more attractive and reduce some of its debts," said Orasanu. The AVAS official said that he requested information about the legal situation of the terrain but answers have not come yet. "If the necessary documents for the privatization process are not sent, we will dismiss the directors," said Orasanu.

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New capital increase at UCM

IulianBulandra — 2006-07-26T08:35:00+00:00

The Board of Directors of Uzina Constructoare de Masini Resita (Machinery Building Plant - UCM Resita), a company controlled by the Swiss consortium Inet Group, will make a decision today, regarding a potential increase of the company's share capital by up to 2.11 million dollars (1.67 million euros). The company's management had not provided any further comment on a potential capital increase by the time the story was ready for print. At the end of May, UCM shareholders approved delegating responsibility to the company's management for capital increases up to the above-mentioned sum, according to the investment programme. The information disclosed to the Stock Exchange did not specify the sources to be used for the capital increase.

UCM has conducted several capital increases over the last two years. One such capital increase conducted in 2004 was the object of litigation that lasted until this year. SIF banat-Crisana, one of the main shareholders at the time, asked for the irreversible annulment of a decision, made by the Board of Directors, by which an increase worth 5.4 million RON (1.3 million euros) had been approved. Neither SIF Banat-Crisana nor SIF Oltenia took part in this increase and drastically reduced their stakes in the company. The litigation even went to the High Court of Cassation and Justice, which has recently rejected SIF Banat-Crisana's claim, the decision being irrevocable.

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Turbomecanica profit lower than expected in H1

IulianBulandra — 2006-07-25T07:08:00+00:00

Turbomecanica Bucharest, the only jet and turbojet engine producer in South-Eastern Europe posted a net profit worth 5.08 million RON (1.43 million euros) in the first six months of the year, an 18% increase against the income made in the January-June period of 2005, but a 46.5% drop against the estimate in the budget.

The company posted turnover worth 44.06m RON (12.44m euros) in the first six months of the year, a 1% decline, while total revenues stood at 50.29m RON (14.2m euros), a 1.6% increase.

The bulk of these revenues (i.e. 98.85%) resulted from production-related activity specific to the company's line of business, reads a report sent by the company to the Stock Exchange.

Company representatives could not be contacted for further comment on these results.

Six months into the year, the company reported profit lower than the budgeted level, due to the increase in the expenditure related to its core business, which went up to 42.9m RON (12.1m euros), from the original forecast of 37.7m. RON (10.6m euros).

The company's net profit margin in the first six months stood at 11.5%.

Turbomecanica's financial plan had estimated a net profit of 9.5m RON for the first six months, with total revenues standing at 49.87m RON.

For the year as a whole, the company had forecasted a net profit worth 18m RON (5.08m euros at an exchange rate of 3.54 RON/EUR), only a 5% increase against the profit posted in 2005. The company had envisaged a turnover worth 99m RON (some 27.9m euros) for 2006.

Turbomecanica failed to attain its budgeted profit in the first quarter, when it posted a net profit worth 1.57m RON (0.44m euros), while according to the spending and revenue budget, estimated profits stood at 3.95m RON.

The profit made in the first three months of the year was eight times higher than in the same period of 2005, but at the beginning of last year the company had faced a drastic drop in profits due to the appreciation of the RON against the main foreign currencies, which in turn affected the company, as a significant part of revenue is derived from exports. Another reason for the fall in profit was the increase in tariffs for utilities.

Turbomecanica mainly works with Rolls Royce and General Electric. The American group, with which it set up a joint venture company in 2001, is actually its main customer. GE Aircraft, the aeronautic division of the American giant, buys a big part of the production of subassemblies for aircraft engines.

Up until the first part of this year, Turbomecanica's majority shareholder was the Turboact Employees Association, which owned 60.7% of the shares. The members of the association decided this year to dissolve the association and redistribute the shares to its members, among whom are Turbomecanica's president and vice-president, as well as the director and members of the company's managing team.

Turbomecanica

First half turnover stood at 44.06 RON (12.44m euros), down 1% from H1, 2005
Total revenues amounted to 50.29m RON (14.2m euros), up 1.6%
Net income reached 5.08m RON (1.43m euros), 18% higher than in the same time last year, but 46.5% lower than budgeted
Mainly works with Rolls Royce and General Electric, with the latter being its main client
Set up a joint venture with GE in 2001.

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AMIDIP's fourth privatization attempt fails

IulianBulandra — 2006-07-24T06:23:00+00:00

A new tender for the privatization of AMIDIP Calan took place Friday, but once again, no company expressed interest in taking over the plant. The asking price had been set at 2.854 million dollars, which is 25 percent under the price demanded at the last privatization attempt. Tomorrow the privatization authority will make a new attempt to attract an investor with a price 25 percent lower than Friday's offer. Two companies bought the task book for the tender, including Indian-based Jindal Saw. AMIDIP separated from the Sidermet Calan iron and steel plant in 2003 to produce cast-iron tubes.

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Rominserv wins tenders

IulianBulandra — 2006-07-20T05:59:00+00:00

Rominserv Valves IAIFO Zalau won two contracts for the production and supply of equipment for American-based Emerson, their value amounting to 322,000 euros which amounts to a leader in the industry of electric motors. Rominserv is part of the Rompetrol group and won two tenders held by Emerson. The Romanian factory that is located in Zalau will manufacture 27 products for the American factory. Emerson is present in 150 countries on the industrial technology market.

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Alro signs contracts worth over 22m euros

IulianBulandra — 2006-07-20T05:57:00+00:00

Since last year Alro Slatina, the biggest primary aluminium smelter in Central and Eastern Europe, has closed contracts worth several tens of million of euros with other companies within the group. Out of this amount, 22 million euros is just the value of contracts with a fixed sum, while the value of other contracts has been indexed to the prices of aluminium or raw materials on international markets. Alro also closed a contract with Rivergate SRL to rent office space, worth two million euros. In addition to Alro Slatina, the Alro group also includes Alprom Slatina, Alum Tulcea and the trader Conef Bucharest.

Alro's merger with Alum is currently in full swing, the merger being a strategy of vertical integration applied by Marco Industries, the majority shareholder of the aluminium manufacturer. The Marco Industries group, based in the Netherlands, is owned by businessman Vitaly Mashytsky. According to data provided by Alro, the biggest contracts were closed with alumina manufacturer Alum Tulcea, the company's main raw material supplier. Alro signed contracts worth some 15.5 million euros with Alum. This sum does not include the contracts where the price is tied to the trend of the metal price on London Metal Exchange.

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Logan effect: Arcelor and Bamesa build 30m-euro factory (UPDATE)

IulianBulandra — 2006-07-18T05:50:00+00:00

European steel giant Arcelor and Spain's Bamesa company, yesterday announced they would invest 30 million euros in building a steel service centre in Topoloveni (Arges County) for the automotive and domestic appliance industry, by 2008.

The service centre will be 40% held by Arcelor and will be located close to the Dacia plant that makes the Logan model.

"Renault is an Arcelor customer and our policy is to follow our customers in the automotive industry, which need high quality steel products. The idea was to make deliveries to Dacia through this plant, but we are not ruling out the possibility to work with more clients.

The factory will be a supplier for both the automotive and domestic appliance industries," Jean Lasar, Arcelor spokesman told ZIARUL FINANCIAR.

"We see Eastern Europe as a market that is growing. Mittal Steel has a strong presence there, including Romania, so that we will take that into consideration, as well," Arcelor official said. Globally, Mittal Steel has started procedures to merge with Arcelor, a move intended to create world's biggest steel maker.

Mittal Steel has a very strong business portfolio in Romania, and is the largest foreign player on this market, second only to Austria's OMV, Petrom's majority shareholder.

The steel service centre could have an annual production capacity of 300,000 tonnes. Construction work has already begun on a 130,000-sqm plot of land, Arcelor officials say. The steel service centre will be up and running in the first half of 2007.

The number of employees could reach 100, industry sources estimate.

The factory will use leading-edge technology to meet customers' requirements for sheet metal that is cut and formed to order.

"This new steel service centre will allow us, working alongside our partner Bamesa, to seize growth opportunities in Central and Eastern European markets," said Gonzalo Urquijo, Arcelor chief financial officer and senior executive vice president in charge of Arcelor Steel Solutions and Services division.

Michel Wurth, deputy CEO in charge of Arcelor's flat products sector, stressed the importance of this initiative as part of the group's leadership strategy in the automotive industry. "This new steel service centre enables us to extend our relationships with existing major international customers moving into this region," Wurth specified.

Arcelor has been present with a representative sales office on the Romanian market since 2004. Arcelor's business in Romania amounted to 15 million euros.

Bamesa has similar steel service centres in Spain, Portugal, France and Turkey and also owns stake in companies from Mexico and Romania.

Bamesa generated EBITDA of 75 million euros in 2005 and projects 2006 sales to stand at over 1 billion euros.

Arcelor is the number one steel producer in Europe and Latin America and its products are aimed at the automotive, construction, household appliances and packaging industries.

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