Czech IT systems and equipment distributor ALEF Group entered the local business scene by purchasing Romanian player Likeit Solution at the end of June. By acquiring 70 percent of Likeit Solution, which reported an EUR 28 million in turnover last year, the group taps into a growing market, after eyeing the move for 10 years.
Negotiations leading to the entry on the Romanian market of the Czech player, who posted an EUR 158 million turnover in 2016, started in January 2017. “It was a mutual choice, as the entry on a market such as the Romanian one can be complicated, also from the point of view of costs. It was important for them to enter the market of IT components and solutions via a local company,” Mircea Ciucur, managing director of ALEF Distribution RO told BR.
According to ALEF Group CEO Milan Zinek, Romania is an attractive market due to the size of its population, the opportunities for growth and the cooperation with Likeit Solution. “Cooperation is about people and this will help us grow. They have an experience of more than 10 years, around 150,000 sellers and an active portfolio of resellers. We can offer these resellers more activities and services such as support. Today it’s easy to buy things on the internet, and we don’t want to compete with internet retailers. Instead, we are offering complete services,” Zinek said.
Growth lies with added value systems and services, security
According to Ciucur, the company‘s biggest growth potential on the Romanian market comes in the sector of distribution of added-value IT systems and equipment. We hope to have a strong growth on Microsoft and Cisco products. It is a direction that holds a great potential for development and needs major investment,” he said, adding that ALEF Distribution RO is planning to create a new department to support the increase in activity.
The Czech Republic, a market where the ALEF Group holds 70 percent market share, serves as a reference point for the company’s operations in Romania. “While the Czech market is bigger in terms of turnover, the Romanian market is more important from the point of view of its growth potential,” Ciucur explained. “In the Czech Republic we have more than 100 people. In the future we want to have the same here,” said the ALEF Distribution RO representative, which currently employs 46. “We will hire another 5 engineers by the end of the year, and more in the future, depending on how things evolve”.
According to Zinek, the company aims to reach a turnover similar to that recorded on the Czech market. “We want to reach EUR 100 million turnover on the Romanian market over the next five years,” he said. The ALEF Group CEO sees growth in the field of security. “In the future the security will be more important, Zilnek said. “In the Czech Republic there is a lot of talk about security, among vendors as well, but I do not see any big investment. Here, we can offer the whole solution, not only the hardware part. Also, we are currently helping our partners to follow EU regulations in terms of security.”
“You have to be proactive in the field of security. It is important to be able to protect your untouchable assets. From what I have seen, the public sector is waiting for a big problem to respond to and implement solutions. We are ready to invest in Romania, in people who can work in the security field and we are interested to spread our best knowledge. We are still figuring out the amount to be invested over the year and in the next period,” Zinek said.
As far as the portfolio of the company is concerned, according to Zilnek, the company has a “healthy mix”, comprising the public sector, mid-market actors, factories and more. “Together with our partners we work for the Czech government, the Czech Post, the Ministry of Interior. Many banks work with our partners, such as Erste Bank, Raiffeisen Bank. The public sector is important for us and a good public contract would be good, but it is dangerous to focus only on the public sector,” he explained.
The company’s headquarters are located in Bucharest, while small teams are located in Cluj and Iasi. They could turn into self-standing offices, Ciucur said, depending on the volume of activity in the future.