Efficiency Improvement Leads To Radox Reorganization

Cornelia Angelescu

Until 1 February 2009, Radox was organized on cost and profit centres focusing on the import, distribution, installation and service of heating and cooling systems, the production of steel radiators and various construction activities.

"Since that date, we have separated our lines of business into distinct companies. Radox will manage technical and commercial operations, Radox Clima-Service will be in charge of installations, service and pipe production, Radox Radiators will take over radiator production, while Radox Construct will be in charge of construction operations. Each of them will have its own budget and be managed by a director. Together, they will form Radox Group," Cornel Rosu, President of Radox Group, told BURSA.

The rationale for the split was to increase flexibility, competitiveness and management efficiency in order to cut expenses through efficient cost management and revenue management. Last but not least, as the nature of the business was different, the reorganization as necessary to better augment each of line of business.

Radox concluded last year with 14 million EUR in turnover. In 2009, after the establishment of Radox Group, the directors intend to match last year"s turnover at group level. Cornel Rosu explained: "Because of the current economic situation, many companies in Romania suffered as much as a 40% turnover decline in the first months of the year, compared to the corresponding period of 2008. The market is becoming very tough. The reliable, more competitive companies will prevail. Each has to play its cards best in order to outcome this difficult period. Besides the negative effects of the crisis - such as smaller sales, unemployment, the need to quickly remodel the business - there are also positive effects. Strong and serious companies will be screened apart from the rest. We have competed with some good companies, but

also with companies that were using illegally employed workforce and illegally bought materials and were offering no quality assurance, no service and no spare parts. There is also a natural screening of people, based on their individual competence, willingness to work hard, and productivity. Based on these criteria, we have laid off some 100 employees to a current total of 350."

From the overall turnover reported by Radox, 6 million EUR was generated from exports to Italy, Great Britain and Spain. The company exports some 200,000 steel radiators per year. The products are made in proprietary factories in Campulung Muscel and Bucharest. Because of the crisis, the timeline of the orders placed with Radox Group has been reduced to 3 months, as customers also reduced the duration of their plans.

• Radox Pursues Competitiveness and Innovation

"Radox remains one of the most professional and comprehensive companies, providing consultancy for choosing the most suitable heating, air conditioning, ventilation and cooling systems, which are imported directly from the respective manufacturer. Adequate installation and maintenance is also provided by Radox. When I said "comprehensive company," I also meant the proprietary production of pipe systems, chimneys and radiators. We have also been focusing on energy recovery equipment, solar panels, heat pumps and photovoltaic panels for producing renewable energy," Cornel Rosu told BURSA.

As the demand for renewable energy systems increases, Radox Group will start producing such systems by themselves. Cornel Rosu explained that such systems could be well combined with heating systems embedded in floors, walls or ceilings, in which the company"s specialists were quite specialized. He pointed out the global effort to maximize the use of renewable energy sources and the alignment of Radox Group with such efforts, considering the low operating costs for industrial and home users alike. "For instance, we have completed a complex project for an office building and a showroom of our sister company Rosim. The surface was approximately 2,000 square meters. We used a combination of solar panels, gas-fired heating and a cooling-heating system embedded in the floor. In wintertime, this company had an energy cost of approximately 150 RON per month," Rosu added.

Various companies and individuals in Romania have become interested in renewable energy systems over the recent years. However, the Government has done nothing to support investments in renewable energy systems and energy efficiency improvement. In Germany, the Government covers 80% of the cost of optimizing heating / cooling systems. In Belgium, the Government covers 30%. According to Cornel Rosu, the cost of electricity and heating is already high for both companies and individual users and will continue to increase in line with the global market trend.