Greece’s Frigoglass, the worldwide leader in the Ice Cold Merchandisers (ICM) market, celebrates 20 years of activity in Romania.
Frigoglass Romanian plant in Timisoara County (Western Romania) is featured among the top employers in the region, having an average of 900 employees. The number of employees has increased by 20 percent since last year, now covering the needs of the plant that operates in 2 shifts and has a capacity of 250.000 units. Also, according to company officials, Frigoglass is the largest contributor to the local budget, with EUR 26 M in the last 10 years.
In 2014, the investment level made by Greeks in the plant in Tmisoara reached EUR 8 M, out of a total of EUR 64 M in the two decades of activity here. This year, the company expects an increase in turnover of over 10 percent.
Not least, it is noted that 20 percent of the raw material comes from domestic suppliers, the value of acquisitions totaling EUR 8-9 million.
More about Greek investor activity on domestic market in a fresh interview with Nikos MAMOULIS, CEO Frigoglass, exclusively for Romania Journal.
20 years of activity on the specific market it seems quite significant. Where are placed the Romanian units among the cool operations that Frigoglass has in Europe in terms of manufacturing capacity and financial contribution to Group’s results?
Timisoara is developed as the flagship plant of the group with a very important contribution to the global production and sales of coolers. Approximately 20-30 percent of the global sales in ICM derive from coolers produced in Timisoara plant.
With this unit, Frigoglass is one of the biggest exporters in the region. Western Europe and Eastern Europe are served by Frigoglass Romania, by 48 percent and 45 percent respectively.
So, in terms of our plants, Romania ranks first. As evidence, we decided to choose Romania the first country where to launch ICOOL concept as of this year. ICOOL means best-in-class energy consumption per respective cabin size, up to almost 60 percent; best-in-class noise achieved through noise absorbers and selecting low-noise components; maintenance-free and easily serviceable, by using (standard for all equipment) foul-free condensers, long life components and sliding designs for cooling mechanism and electrical box a.s.o.
Crisis has left its mark on your business as well in Europe, including Romania, deciding in 2013 to transfer part of the local production activities in Greece. Can it be said that the company was close to an exit from the Romanian market two years ago?
In October 2013 the production of ICM spare parts, that is only a small part of our business, was transferred from Romania to Greece that allowed the Romania plant to focus on the production of ICM units. The company was never close to an exit. On the contrary, over the last 5 years we have invested approximately EUR 25 million to add fresh capacity, improve plant’s efficiency and productivity as well as safeguarding our superior quality.
Then you decided to integrate the operations in Turkey to the factory in Romania. Was this decision a move that substantially attenuated the losses? What values you are talking about?
Frigoglass has implemented far-reaching steps to rationalize its manufacturing footprint and address low performing entities. Flagship of this consolidation process is the new operational framework of our plant in Timisoara, Romania.
The company has successfully integrated its Turkish manufacturing volume into the Romanian facility late in 2014. These right-sizing moves significantly improve the cost base, strengthen competitiveness and materially reduce complexity within the manufacturing footprint, all in line with Frigoglass’ cutting edge environmental technologies. In this framework we continue to invest in Romania.
As you said recently in your anniversary press conference, in the last 20 years you have invested more than EUR 64 million in the Romanian plant. On what have you focused?
Over the last 5 years we have invested approximately EUR 25 million to add fresh capacity, improve plant’s efficiency and productivity as well as safeguarding our superior quality. We have invested in Lean manufacturing piloted by our plant in Romania which also enabled us to integrate the Turkish volume.
The successful consolidation of the Turkish manufacturing operation in our Romanian plant late last year will significantly improve our cost base and strengthen our long-term competitiveness going forward.
Based on the successful pilot in Romania, we initiated the global deployment of Frigoglass Excellence Systems targeting to maximize customer value. The related investments towards a fourth production line this year to absorb Turkish production volume and the continued productivity improvements following the implementation of Lean manufacturing principles will allow us to meet demand for beverage coolers across Europe.
What percentage of the production in Romania is targeted to foreign markets and to the domestic one?
Through our Romanian operations we are supplying coolers to well-known beverage brands across Europe. Around 90 percent of our annual sales come from exports and the remaining 10 percent from the domestic market.
Among our key markets in the Europe that are covered by our Romanian operations are Romania, Poland, Germany, Bulgaria, France, Italy and Norway.
What are the main clients of Frigoglass Romania?
Through our Romanian operations we are supplying coolers to well-known beverage brands across Europe. We have strong and well established partnerships with the world’s leading brands in the soft drinks and alcoholic beverage sectors. We are selling coolers to Coca-Cola HBC as well as to the recently team up of Coca-Cola, Coca-Cola Iberian Partners and Coca-Cola Erfrischungsgetränke AG to form Coca-Cola European Partners.
We also satisfy demand from tier-one International breweries such as Carlsberg, Heineken, SABMiller and Molson Coors as well as same local brands. Dairy companies like Danone and local brand Albalact as well as Pepsi and other companies operating in the water segment are also included in our customer base.
Do you intend to enter vending industry?
We don’t have such plans. Although it looks very similar, it’s not. It’s just a very completely different industry. Our strategy is to be leaders in what we know to do better, which is ICM.
What is your message to Greek businessmen who decide to invest in the future in Romania?
Maybe we took a big risk 20 years ago, but Romania is giving that level of confidence that convinced us we are going on the right direction. The consumer demand started to grow, GDP as well… Romania was a good bet, the evidence being the 20 years that we celebrate in this moment.