Romlux Targoviste, an electric bulb producer, expects to make net profits of at least 0.5 million euros this year against a turnover of 5.3 million euros (using an average exchange rate of 37,500 ROL/euro).
Last year Romlux reported losses of one million euros (41 billion ROL) and sales of 4.4 million euros (180 billion ROL).
“We estimate we will start making a profit thanks to the recovery programme we implemented this year,” said Vasile Horga, Romlux general manager. Horga was brought back in to run Romlux earlier this year in order to revive the company’s activities.
The programme will see the company give up its own distribution network and resort to specialised distributors.
“We want to give up our own distribution network since on average 30%, and sometimes even half of the revenues generated by a distribution centre we own goes to cover the operational expenses of the distributor,” Horga explained.
Romlux has already let go of three of its six regional distribution centres, in Muntenia, Dobrogea and Moldova.
“For the other centres, in Ardeal, which were also the most efficient, we have established a 20% ceiling for revenues derived from the sale of our products, which will go to the distributor. If a centre overshoots this ceiling we will eliminate it,” he said.
Since the beginning of the year Romlux has sealed three contracts with customers from Great Britain, the Netherlands and France, all of which are traditional partners of the company.
The value of these contracts is higher than last year. This year’s contract with British company Status International is worth 5 million pounds (7 million euros) and will be completed by the end of this year.
The contract signed last year the company was for 1.8 million pounds. The English market is the most important for Romlux, with 70% of the company’s bulb production destined for this market.
The other two contracts were with companies from the Netherlands and France, worth up to one million euros and 0.5 million euros respectively. In 2004, the value of contracts signed with partners from these markets did not exceed 0.2 million euros.
Romlux is controlled by Broadhurst investment fund, which owns 65% in the company’s stock. catalin.ciocan@zf.ro