BR Analysis! Dedeman – the single EUR 1 billion Romanian-owned business

Sorin Melenciuc 18/06/2018 | 15:22

Dedeman has become, during the last few years, a unique company in Romania: it is, by far, the biggest Romanian-owned business built by local entrepreneurs, (the turnover in 2017 was EUR 1,13 billion) posting higher growth rates than the economy and impressive profit rates. And there are few chances that other Romanian-owned companies to approach it: the second biggest local business had half its turnover in 2017.

Dedeman’s success story is one of a first major player in a small market, avoided for decades by large foreign companies.

The company was founded in 1991, but change its strategy in 2001 to become a leading force in the DIY sector. The strategy change came after a visit of its owners in Austria and Italy.

“I saw their big DIY stores and I thought that when they came over, they would eliminate us. I said we had to do something to keep up,” Dragos Pavel, one of Dedeman’s owners, said in 2011, cited by Adevarul.ro.

And the strategy they made proved successful. The company took advantage of the lack of major foreign investment in the local DIY sector until late 2000’s and built the first major national DIY network in Romania.

Dedeman’s owners, the brothers Dragos and Adrian Paval, were small local entrepreneurs in Romania’s poorest region, Moldova, owning a local network of furniture and interior design solutions.

Now, Dedeman is by far the largest DIY retailer in Romania and the biggest business with Romanian owners.

In 2017, Dedeman posted an impressive 20.5 percent increase in turnover, to RON 6.33 billion (EUR 1.39 billion), and a net profit of RON 889.1 million (EUR 194.6 million), according to the Finance Ministry data.

The net profit of the company grew by 24.7 percent last year, from RON 713.1 million in 2016.

Compared to other Romanian-owned companies, Dedeman looks like a monster: the second in the ranking, Zoltan Teszari’s RCS&RDS, posted a turnover of RON 3.33 billion in 2017, half the size of Dedeman’s turnover, followed by Dan Ostahie’s Altex (RON 3.28 billion).

Dedeman, specialized in trading building materials and offering interior design solutions, is owned by the brothers Dragos and Adrian Paval, and is the largest business headquartered in Moldova, Romania’s poorest region – the company is registered in the city of Bacau.

Dedeman has continued its expansion in 2017, and the number of employees increased by 16.6 percent to almost 10,000. Currently, Dedeman has 47 shops, two logistics centers and its own car park.

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