5 million-euro investment in automotive cables

EKR Elektrokontakt Romania, a subsidiary of Germany”s Autoelectric GmbH, a producer of car parts and cable systems, will finalise an investment of around 5 million euros this month in order to increase the production capacity of the plant based in Pancota, Arad county.

The German group owns two production facilities in Romania, one in Santana and another in Pancota, with the latter having double the capacity of the former.

“Over the past six years, we”ve invested constantly to expand and strengthen the group”s activities in Romania. For 2006, we have planned no other investments, but we intend to consolidate the investments we”ve already made. We will earmark further investments for expansion only in case our customers” orders exceed our current production capacity,” stated Octavian Barnutiu, financial manager of EKR Elektrokontakt Romania. The company”s management estimates a growth in turnover of about 10% for this year from the approximately 7 million euros in 2005.

“Investments in the development of production capacities have helped us achieve constant growth every year. When we started production in Romania, we had 100 employees and we operated in a rented location, while at this moment our number of employees has reached 1,200 and we own two production facilities built through greenfield investment projects,” Barnutiu also said.

The two plants in Arad county manufacture about 400,000 automotive parts monthly, mainly for BMW and Daimler-Chrysler. “For these customers, we deliver products both directly, and to other suppliers manufacturing certain car parts. For instance, we deliver cable systems to a producer of BMW seats,” specified Barnutiu.

He added BMW accounts for about 50% of total production achieved by Elektrokontakt Romania. At present, approximately 50% of the German group”s cable system production is concentrated in Romania, while the remainder is manufactured mainly in the Czech Republic and Mexico.

“To cut costs, the production activities in Germany have been moved to Romania and the Czech Republic over recent years. At this moment, production in Germany is quite low, and is carried out at the explicit request of the group”s customers,” specified Barnutiu. Globally, Autoelectric GmbH has almost 4,000 employees in subsidiaries it has developed in Germany, the United States, the Czech Republic, Romania and Mexico, annually registering turnover worth above 100 million euros.

The German group started its activities in Romania in 1997, once it launched production in Santana, Arad county. In 1999, the group undertook its first greenfield investment in a 6,000 square metre plant in Santana, and in 2001 carried out similar investments in Pancota.