Iasitex, one of the top ten producers in the textile industry, is counting on the expansion of production facilities and personnel growth, at a time when most players in the sector are concerned with reducing funds, previously earmarked for investment.

Gheorghe Caescu, 52, has been running Iasitex since March 2006, filling both the position of general manager and that of chairman of the board. Iasitex, part of the Serviciile Comerciale Romane (SCR) group, controlled by businessman Stefan Vuza, has invested around 6m euros over the past 3 years, mainly to retool production facilities.

"To survive on the textile market, one has to have a high level of productivity, in order to sustain both costs and prices at a low level. Salaries in Romania will rise amid EU integration, so we must do something to keep costs flat and salary raises in balance," says Caescu. Two years ago the company acquired the assets of the Pitesti-based Novatex company, which owned a textile plant. The firm, which produces cotton and cotton-like fabrics, now operates under the name of Nova Textile and has Iasitex as its sole shareholder. As a result of this change, Iasitex has almost doubled its production capacity. The two companies have a total number of employees of around 2,500.

Iasitex is the biggest textile distributor for the Swedish giant Ikea, with production facilities and retail outlets throughout South-Eastern Europe, except Turkey. Around 85% of the company's production is exported to countries in Western Europe, the United States and even Asia. Caescu believes that Iasitex is the biggest producer of cotton and cotton-type fabric in Romania and even in the region (Turkish market not considered). Iasitex this year budgeted turnover worth over 20m euros. Company representatives expect the profitability rate to revolve around 10% this year, which would mean a minimum income of 2m euros for the Iasi-based producer. The company posted turnover worth 17.5m euros last year, while profit stood at 0.6m euros.

The company's main shareholders are A2 Impex (with a stake of 59.84%) and SIF Moldova, with a 31.52% stake.

Caescu manages the textile unit of SCR and estimates this produces more than 70% of the total volume of cotton and cotton-type fabric in Romania.

According to Caescu, the Romanian textile industry players will have to reposition themselves in order to get the portion of the market that is not already covered by Asia, to ensure survival in the long term. The textile market has recently been estimated at around 9.5bn euros, but industry players expect the market to register a decline by around 2 billion euros by 2010.

Romania's biggest textile producers include Rosko Textil, Rifil Savinesti and Akrom Akal Textiles of Suceava.

Iasitex

• One of the top ten producers in the domestic textile industry
• Banks on the expansion of production facilities and personnel growth
  
• The biggest distributor of textiles for Ikea Swedish giant
  
• Has budgeted turnover worth over 20 million euros for this year, up around 15% from last year
  
• Forecasts the profitability rate will stand at around 10%, meaning a minimum profit of 2 million euros
• Its main shareholders are A2 Impex, with a stake of 59.84% and SIF Moldova with 31.52%.

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