From taxicab to $25m in turnover

Two years ago, Ioan Prisecaru decided to face the former socialist industry and took over a plant with about 40 billion lei in debts from the State Ownership Fund (SOF). The Iasi-based group Conex now has 2,000 employees, exports car spare parts, lacquers and paints worth 10 billion lei every month. The group registered 25 million dollars in turnover last year.

In 1991, an economist and an engineer, wife and husband, both employed at Iasi-based Al. I. Cuza University, decided to make some money and turned their car into a taxicab. A lot of people deemed this occupation as an alternative to the unemployed status.

Those who were not satisfied with a meagre salary paid by the state institutions headed towards this activity to get higher revenues. As their business quickly developed, Tereza and Ioan Prisecaru came to own 17 taxis and their company became the largest taxi firm in the town.

They bought second-hand cars and Ioan Prisecaru realised they needed a small workshop to produce car spare parts. “We had the cars, but we couldn’t find the necessary spare parts. Then I decided to open such a workshop for the spare parts manufacture,” Prisecaru recollects.

He established Tes Conex, which manufactured only simple spare parts requiring an easy-to-do technology. Things gradually changed and the small workshop developed into a genuine company producing spare parts 30% cheaper than the imported ones.

As he was encouraged by the results, Prisecaru decided to open Conex, a new company manufacturing lacquers and paints in 1996. The value of this plant is currently estimated at 7 million dollars.

The Iasi-based company produced 4,000 tonnes of lacquers and paints in 2000 and ranked third in the top of national paint producers last year. According to Prisecaru, Conex has a market share of 10% and its main competitors are Policolor Bucuresti, Kober Piatra Neamt and Azur Timisoara.

Though Conex group companies had several contracts with car producers, Prisecaru decided to purchase 69.9% shares in ASAM, a Romanian producer of auto spare parts.

“ASAM is an important producer which used to manufacture spare parts, but the risk was quite high. The problem was not the price of 3.8 billion lei to buy the shares, but the company’s debts of 38 billion lei. My friends advised me to drop it, since it was a difficult and uncertain business. As I was a stubborn, I didn’t consider their opinion,” says Prisecaru.

The company was able to pay most of its debts and the 800 workers were soon joined by another 300.

“ASAM was a typical socialist company with 30-40 year-old equipment. We worked a lot and we pumped a lot of money in the production process, raw material supply, the manufacture stream and stocks. It is odd to invest in stocks, but we did so because we sometimes failed to supply the clients’ orders.

We came to have 15 billion lei in stocks, up from 4 billion lei, but the basic rule is that the stock level should not outrun the company’s monthly turnover,” Prisecaru explains.

ASAM output doubled in absolute value over the last two years, reaching 18 billion lei per month.