VEKA Romania wants to grow by additional 20%

• Interview with Alexandru Oancea, Marketing Manager of VEKA Romania

Reporter: How has the activity of VEKA Romania evolved lately?

Alexandru Oancea: In 2011, VEKA Romania saw a 20% increase in sales over the previous year. This evolution continues into 2012 as well, with the upward trend remaining in place, in spite of the market's stagnation. Whereas in the beginning of this year we were seeing an increase of 55% - the largest growth rate in all the 55 national markets which the German group VEKA is present - the holiday period and the exchange rate fluctuation have led to the decrease of that percentage towards the end of the year. In spite of this, we remain steady on the course we have set for ourselves and we are pleased with the results for 2012.

Reporter: What caused your growth in the first half of the year?

Alexandru Oancea: The growth seen by VEKA on the local market was due to the consolidation of the existing relationships with our partners, as well as to the increase in the weight of the export of thermo-insulating doors and windows made by the producers who use VEKA profiles to the detriment of the more economical solutions, but which are of inferior quality.

Beyond the numbers, VEKA Romania is also increasing its client portfolio, as it is presently cooperating with over 180 partners whose exports are continuously growing.

Reporter: Do you intend to keep your growth rate at 20% for the entire year 2012?

Alexandru Oancea: We have budgeted for ourselves a 20% increase in turnover, together with a market share increase. These two goals rely, first of all, on the consolidation of the relationships with our current partners and on increasing the absorption rate of high quality products, to the detriment of alternatives which are economical, but inferior in terms of quality. Year after year, we are seeing continuous increases of the weight of the export of doors and windows achieved by the makers of thermo-insulating joinery which use the VEKA profiles.

Moreover, we consider that the introduction, in the beginning of the year, of a new system of doors and windows, will become a new factor of growth of the company's business for the coming period.

Reporter: How has the company been affected by the economic crisis?

Alexandru Oancea: Ever since the beginning of the recession period, we have reviewed the evolution of our line of business and we came up with optimal solutions, which would respond to the new directions of our end-customers. The economic difficulties have resulted in a change when it comes to buying habits. Speaking of joinery, customers are now focused on savings in the medium and long term, rather than in the short term. Thus, the purchase of premium products, durable and green, even if they have a price in line with their technical performances, is the new direction which customers are following. This reorientation in the buying habits was beneficial for our company, as all our PVC joinery profiles are exclusively A-class quality, and can thus provide the customers with optimal results not only in the short term, but in the medium and long term as well. VEKA's PVC profile systems for the manufacturing of thermo-insulating joinery are 100% recyclable, exclusively class-A quality, with an estimated lifetime of more than 50 years, and they can be recycled up to 10 times.

Reporter: What new products did you launch this year?

Alexandru Oancea: In the beginning of 2012, VEKA Romania launched SOFTLINE 82, a new PVC profile system created to provide, on the standard range of equipments, ideal insulation ratios in order to improve the effectiveness of the thermal insulation of already existing homes or of new constructions.

Reporter: What new products are you going to launch?

Alexandru Oancea: For 2013 we plan to diversify the current range of solutions, by launching new frames as part of the main families of VEKA systems. For example, we are considering the development of the SOFTLINE 82 family by implementing new frames or adapting the VEKASLIDE system to the new typology of frames.

Reporter: Which of your products sell best?

Alexandru Oancea: 5-chamber systems remain the best sellers, on the Romanian and German market alike. Also, an important part in our range of products and invariably, a good chunk of the sales comes from efficient systems, with a minimum of six insulation chambers, or of the systems which can also be used in passive constructions.

Reporter: What is your market share?

Alexandru Oancea: VEKA Romania has an estimated market share of 14-15%, and is a leader on the segment of premium products. We estimate that a large part of the VEKA systems sold in Romania end up in the form of windows or doors on other European markets, such as Italy, Belgium, France and Germany.

Reporter: How many employees does the company have?

Alexandru Oancea: Incorporated in 2000, VEKA Romania is fully owned by VEKA AG Germany and has over 30 employees.

Reporter: What investment projects do you have?

Alexandru Oancea: At VEKA Romania we are constantly involved in training our partners, in order to help them understand the importance of our products on the local market, and even more, in order to make sure that our German standards are reflected in the quality of the Romanian joinery. We are also making considerable efforts to create awareness in the market about the benefits of the Class-A profile systems and we get involved in continuously keeping our end-customers up to date on the benefits of the durable thermo-insulating products.

Because the logistic component is extremely important for VEKA, the company has invested heavily in a unified system of transport and logistics, which is one-of-its-kind in the industry. This system comes to the aid of our joinery partners, providing safety and predictability in the supply of materials.

Reporter: What is the amount of the sales across the group?

Alexandru Oancea: In over 40 years, VEKA has expanded from a small company set up in Germany into a producer present all over the world, with more than 3,700 employees. Present on 6 continents, the VEKA group operates on 55 national markets, having 29 locations all over the world and 16 production locations. In 2011, VEKA became a world leader on the market of PVC profiles for doors, windows and louvers, with sales of over 700 million Euros all over the world.

Reporter: How would you describe the market you are operating on?

Alexandru Oancea: The PVC joinery market in Romania peaked in 2007-2008, and in the following years it saw a drop from all points of view: in 2009, the market fell 50%, in 2010 - 30%, in 2011 - 10-15%, and this year there are chances of stabilization.

The effect which the economic crisis had on the PVC joinery was that it resulted in a "culling" of the market. The recession separated companies, meaning that those which had strong, high quality products will gain market share to the detriment of low quality products.

The joinery market is estimated at 300 million Euros, down compared to 2011, and the PVC profiles market is estimated at approximately 100 million Euros.

On a local level, the trend of price ruling the market is still in place. Still, going for the lowest price is not a criterion for making the purchase anymore, as end-users are concerned with safety and durability, to the detriment of low-quality, cheap products.

On a European level, Romania has a lot to catch up when it comes to the rate of use of PVC joinery systems. However, the Romanian market is ahead of those of its neighbors in South-Eastern Europe, not just because of the somewhat higher purchasing power, but also because of the high number of inhabitants, of the surface of the country or of the residential complexes.

Reporter: How do you see this market in the future?

Alexandru Oancea: For 2013, we estimate a gain of 8-10% of the Romanian market for thermo-insulating joinery. This growth however, depends on the national economic circumstances and on whether investments will resume.

Reporter: Thank you!