Argillon Romania, a producer of medium and high-voltage porcelain insulators, part of Argillon GmbH Germany, posted 500% higher sales in the first three months of the year compared with the corresponding period of last year, amid weaker competition.
“Part of the market was left empty after NGK, the world”s biggest insulator producer, exited the European market, deciding to close its only European that was based plant in Belgium. At present, the high voltage porcelain insulator market is witnessing an overall upward trend globally, particularly in Europe. Solid demand on the European market stems from the rising investment in the power sector,” stated Danut Pop, general manager of Argillon Romania.
He added that at present over 95% of the production in Romania is earmarked for export primarily to Europe and North America.
To meet market demand, Argillon Romania augmented the production capacities of the Turda-based plant ten times, to a current production volume of 6,000 tonnes of insulators per annum. To sustain this growth, the company in September 2005 operated a capital increase worth over 230,000 euros.
“The total amount of investment made in 2005 amounted to 8 million euros, mainly targeting the development of production capacities. For this year, we do not have considerable investments in terms of value, as our target for 2006 is to stabilise the production capacity increases done last year,” Pop also stated.
In his opinion, demand is expected to expand globally over the following years, creating an important role for the plants operating in the so-called low-cost countries, as manufacturers in Western Europe will be forced to cut costs and find cheaper production solutions.
“Under the circumstances, Romania could provide a solution to Western producers. However, at present the Romanian market is still at a quite low level, especially because of the instability of the energy industry, generated by ongoing or recently finalised privatisations. We estimate demand on the domestic market will go up over the next 4-5 years, in the wake of financing that will be invested into the energy industry,” specified Argillon Romania manager.
The German group acquired the plant in Turda, Cluj county in 2004 and invested approximately 300,000 euros in production capacities in the same year.
According to Finance Ministry data, Argillon Romania posted turnover worth above 1.3 million euros in 2004. The company estimates it accounts for about 7% of the market. The main rival of Argillon on the domestic market is Electroceramica Turda.