Romanian companies will have a “window of expansion” in 2005-2006 to take advantage of a regional market of more than 125 million people and on which they will be able to grow and attain necessary critical mass, Dinu Patriciu, chairman of the Rompetrol oil group said yesterday.
For years, domestic companies have made investment plans tailored to the domestic market at best, but with no concrete regional expansion strategy or vision like companies from the Czech Republic, Poland, Hungary and Russia, say experts from advisory firms in Romania.
With Romania’s pending accession to the European Union in 2007, Romanian companies now have the opportunity to attain critical mass by expanding their operations to neighbouring markets.
Some of the largest companies in Romania, such as Rompetrol (oil), Mobexpert (furniture), Altex (electronics and home appliances) and Impact SA (construction) have announced plans to expand operations region-wide.
“The target” of Romanian companies in view of development of their own businesses should be national markets that stand little chance of joining the European Union or are smaller and geographically closer.
“Very few people realise that the distance from Constanta to Oradea is greater than the distance from Bucharest to Tirana. There are opportunities for the Romanian companies to expand into Bulgaria, where integration with Romania comes almost naturally, geographically speaking, and then there is Albania, Macedonia, Kosovo and Serbia,” said Patriciu.
“Romanian companies should embark upon regional development programmes in the next two years, as this process can create significant opportunities given the upcoming EU accession and will be much harder to do after accession,” he explained. According to Patriciu, Romania needs to take steps to avoid becoming a market only for somebody else’s products.
“A balanced fiscal system, regulations for exports in the Balkan region and adoption of the holding law will help create conditions to allow development of regional networks,” continued Patriciu, who, in recent years, has expanded his retail networks for Petromidia fuel to the Republic of Moldova, Bulgaria and, more recently, Albania. They are also targeting other markets, including Kosovo and Turkey. Rompetrol Group anticipates $1.5bn in turnover this year.
Romania has the necessary resources to export these products to regional markets, Patriciu added.
“We produce more fuel than we need and we can develop regional networks. The imbalance between production and consumption in the Balkans is serious – so we have a potential market for high value-added products, such as fuel,” Patriciu explained.
Patriciu concluded by saying Romania is capable of exporting 3 to 4 million tonnes of fuel and 3 million tonnes of petrochemical products per year. zf@zf.ro