Honeywell posts spectacular growth on Romanian market

The small company established five years ago on the Romanian market by the powerful American industrial group Honeywell is about to become an industrial giant in Southeastern Europe. The Bucharest-based plant (the only SEE production unit bearing the Honeywell logo) posted turnover revolving around 2 million dollars in 1998, only to exceed 74 million dollars last year.

This spectacular evolution does not stop here, as Honeywell Garrett SRL, the company operating the Bucharest plant, will start making turbo blowers by yearend. This business is sensibly more lucrative than the production of auto components and subassemblies.#leadend# The move is expected to increase turnover starting with the first year, with the Bucharest-based factory set to join the select club of the 12 Honeywell plants making turbo blowers and working directly with the big carmakers such as Renault or Volkswagen.

“We are looking to start making turbo blowers in the fourth quarter of 2003, with some production facilities being transferred from Great Britain to the Bucharest plant. We will invest about two million dollars this year, to prepare the plant for the new operations. The effects will be seen as early as this year, as our forecasts point to turnover worth 100 million euros for 2003. For next year, we aim at some 200 million euros, which is triple the level attained in 2002,” Gheorghe Dudau, general manager of Honeywell Garrett SRL told Ziarul Financiar. The company had originally estimated 2003 turnover at only 86 million dollars.

On the other hand, the Bucharest plant will be able to make deliveries to the end customers, Dudau says. According to the company’s general manager, the factory will continue to make auto components and subassemblies, besides turbo blowers. Honeywell Garrett SRL, a subsidiary of one of the group’s divisions, was initially manufacturing four types of auto parts and one assembly for turbo blowers, so that only the production structure will change.

In other words, auto components accounted for 70% of the total output in 2001 (with subassemblies filling the rest), then subassemblies accounted for 90% of the total last year (leaving only 10% to components). In 2003, turbo blowers are expected to account for 30% of the output, only to increase to 70% next year (with 30% left for auto components and subassemblies).

To switch to the final level of turbo blower production, the plant needed to subcontract part of the component production to Romanian companies, licenced by Honeywell. Searches began in 2002, when the company was in talks with several enterprises. Finally, only one company was selected to work with Honeywell, in accordance with the US group’s standards: Compa Sibiu.