Gerom Buzau loses battle to Turks

Buzau-based glass maker Gerom will post lower turnover this year than in 2002 because of the loss or the risk of losing certain contracts with major clients, such as Automobile Dacia or Arctic, taken over by multinationals. In both cases, Gerom is faced with competition from Turkish companies.
The two companies now prefer to work with their worldwide suppliers – particularly because the domestic producer, privatised after a certain delay, has quite a handful of problems to solve.
“The company is in need of four million euro investments to survive, but the owner said he would not invest a single dime unless the incentive issue is addressed. The company was privatised last year and the contract stipulated certain incentives for paying the debts to the budget, which are now challenged,” Constantin Dragan, Gerom general manager said.
At the end of last year, Gerom got a notification from Automobile Dacia stating that, given its situation, the lack of investment and upgrade resources and the unjustified delay in privatisation, it had not been selected as Renault supplier for the Dacia Solenza model. Until this year, Gerom used to be the sole supplier of windscreens for the Dacia line, and the Pitesti-based company was the best client of the factory in Buzau (44% of the total sales).
The carmaker chose Trakya Cam (Turkey) as its windscreen supplier for the Solenza model. Renault holds another plant in Turkey, where it makes the Clio Symbol model aimed at emerging markets, as Dacia is. Gerom is still supplying glass for the standard and pick-up Dacia models, as well as other spare parts, but lost the contracts for Super Nova, a model replaced by Solenza.
All this in addition to Arctic’s takeover by the Turkish Arcelik, as the new majority shareholder’s policy is to use its traditional Turkey-based suppliers, as well.
“We haven’t lost Arctic as a client yet, because we supply products of the same quality for lower prices, as transport costs are much lower,” Dragan said. He added Arctic had placed the same amount of orders as last year.
The company manager, however, says the continuation of this contract is not certain, so that Gerom’s market will seriously shrink in the event it loses the contract. Subsequently, the company has already shed 150 jobs out of the 472 at the end of last year.
The policy to keep the traditional suppliers of the multinational companies that have invested in Romania has affected other companies on the Romanian market, as well, given that the industry was devised to work as an integrated machine before 1989.
For instance, rubber parts maker Rolast lost some of its contracts with Automobile Dacia, as soon as the latter was taken over by Renault. Sidex shared the same fate, but got back on the list, following takeover by Indian LNM Group. bogdan.neagu@zf.ro