Vulcan steels itself to take a bridge over troubled waters

Vulcan, the only Romanian industrial boiler manufacturer, controlled by businessman Ovidiu Tender, is turning to local projects to develop the business. President Peter Eisenkolb told Business Review that the company was aiming to become one of the leading bridge suppliers for the Comarnic-Brasov highway and of equipment for the 3rd and 4th reactors in Cernavoda power plant as a means to steer the company into profitable territory.

Dana Ciuraru

The development of the infrastructure sector in Romania seems to open the way to new business horizons for Vulcan, Romania’s sole industrial boiler manufacturer. The company, part of Tender Group, which is controlled by local businessman Ovidiu Tender, is resuming the manufacturing of steel for infrastructure, Peter Eisenkolb, president of the local firm and Vulcan International CEO, told Business Review.

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“Vulcan’s core market is the power industry in Europe and oil and water extraction pumps for a global market and we are fighting to enlarge our market shares on this segment. But in addition we are re-entering the manufacturing of structural steel for the infrastructure so desperately needed in our domestic market. We can supply huge amounts of production, especially if we consider the capabilities of the group we are a part of,” said Eisenkolb.

According to him, the total orders for the bridge project reach only a small amount so far, but considering the investments in infrastructure, this share will probably increase on the domestic scene.

The starting point for Vulcan on this sector was the contract recently signed with the Greek Aktor group to build a steel bridge, estimated by market sources to be worth EUR 2 million, as part of Bucharest’s ring road. Moreover, the company has announced that it plans to position itself as one of the leading suppliers for the nine bridges that form part of the Comarnic-Brasov highway.

Losses from last year

Eisenkolb said that last year’s results will not include big losses, but will feature some losses, in a year that was a bad for almost everyone on the market. According to the Vulcan official, local market demand dropped almost to zero toward the end of 2008 and did not start to recover until the end of 2009. But Eisenkolb believes

that important contracts on the

local market are now coming into view.

“Our biggest interest lies with the Turceni boiler refurbishment project. However the internal market offers several opportunities for 2010. In 2009 the market was down and local competition fierce; fortunately the market will recover now. Hopefully financing can be made available for the large number of projects to be executed to refurbish the Romanian power industry,” said the Vulcan president.

The total order intake for 2009 is close to the budget prepared in mid 2008, before the full impact of the crisis on the manufacturing industry became apparent.

The ratio was approximately 60 percent export and 40 percent domestic market.

Anti-crisis plan

“We have kept the program of development and investments to exit the crisis more powerful and improve our competitiveness. Furthermore, we have offered our services for steel manufacturing to industries that were not our core targets, for instance steel bridges for the road construction industry. Last but not least we have intensified sales efforts for foreign markets, all accompanied by a step-by-step cost-cutting program,” said Eisenkolb, describing the company’s anti-crisis measures.

Vulcan reduced its investments last year due to the recession. Company data show that last year RON 21 million went into facilities, equipment and infrastructure. According to the president, the restructuring measures will continue in 2010 as well.

“This year we need to finish the restructuring program and collective dismissals we started at the beginning of the year to achieve a level of competitiveness and productivity which can assure a full capacity loading in 2010. We reached agreement with the unions at Vulcan in January and started the implementation at the beginning of February.”

Turning to the company’s client portfolio on foreign markets, Eisenkolb added that Vulcan intends to become one of the leading suppliers of equipment for the 3rd and 4th reactors at Cernavoda power plant. These projects could, he hopes, generate substantial growth for the business after years in which the company, like the rest of the sector, was struggling.

dana.ciuraru@business-review.ro