Good prospects for army gear makers

A possible war in the Middle East and the involvement of the Romanian army in the NATO operations comes with several economic benefits for certain Romanian companies, that is the military equipment producers. Condor, the only Romanian parachute maker and one of the leading military gear and safety equipment producers, estimates to see its turnover increase by at least 50% this year from 2.2 million euros to 3.3 million euros.
“We feel the amount of orders from the Romanian army, our main client, will double this year, while the conflict in Iraq has already shown in an increase in the number of orders for some foreign armies,” Adrian Stefan, Condor’s marketing manager told Ziarul Financiar.
Another Romanian company, Romcarbon Buzau, the only domestic gas mask producer has recently announced it has been overwhelmed with inquiries about offers by the countries in the Gulf area mainly.
“The important thing for our business, in my opinion, is not the war against Iraq, but the building of a privileged relation with the US. The Romanian army has started to take part in real life missions, which requires uniforms and equipment in line with higher standards,” Stefan says.
He specified the Romanian army accounted for about 50% of the company’s turnover, while the other 50% were mainly derived from exports. Condor, however, does not directly work for the foreign armies; instead, it operates as subcontractor, so that 90% of the total exports are conducted under the lohn system.
Lohn does have several advantages, though.  “We gained know-how while working with foreign partners, which has helped us gain the contracts,” Stefan says. “The Army buys products through the public procurement system and the experience we gained has helped us win the tenders,” he added.
The Romanian Army will remain an important client for Condor, even though competition is most fierce on the equipment market. Some of the companies producing army gears are Stimoex, General Conf or Areca.
“We will be driven by the obligation to keep our commitments to NATO. Requests will be more specific, yet more orders will come. It is hard to say how the years to come will be, but we see some major procurement programmes set to begin after 2006,” the Condor official feels.
Condor last year made 70 billion ROL (2.2 million euro) turnover, 25% more than in 2001 in real terms. It is currently employing 480 people and was privatised in 1999, with the employees association as majority shareholder.