Small construction materials distributors seek help from networks

Two of the largest construction materials distributors on the Romanian market, Ambient Sibiu and Dedeman Bacau, with turnover of over 200 million euros each, have lately received requests for partnerships from smaller distributors, which are no longer able to cope on a market that has seen an over 30% decline since the beginning of the year.

“We received a few propositions, but it is very hard to integrate the stores into our network, either due to their format, or because their location is not good from our point of view or due to poor quality of store construction,” said Dragos Paval, majority shareholder of DIY store network Dedeman, based in Bacau. He did not give the name of the companies that came knocking on his door in search of a “lifeline”.

On the other hand, Ioan Ciolan, majority shareholder of Ambient Sibiu has sealed two partnerships with a fireplace distributor in Sibiu (Trotter) and with Daniel Trading company in Avrig, which entitles the two companies to use the Ambient brand and to benefit from the distribution system of the Sibiu-based group.

Ciolan specified that his chain does not charge any fees to companies under the Ambient umbrella, and that the two businesses have a 1-2 million-euro turnover.

“In the past year we received more requests for partnerships from distributors than before,” Ioan Ciolan, owner of Ambient, a company with a 220 million-euro turnover in 2008, told ZF.

Trotter posted 0.3 million RON in turnover last year, and Daniel Trading made a 6 million-RON (1.6 million-euro) turnover, according to data from the Romanian Finance Ministry. Ambient’s own chain consists of 15 shopping centres, 8 smaller stores and 4 storage facilities.