|
| |
|
 Romania
the awakening giant of Europe |
 Company
Profile
 Activities
TOFAN- RECAP produces recapped tires for lorries and light lorries with American Bandag equipment..
DANUBIANA - It produces a diversified range of tires for cars, light lorries, buses, tractors and other agricultural machinery, trailers and industrial transport machinery
VICTORIA - FLORESTI Produces an entire range of tires : radial tires for cars, radial and diagonal tires for lorries and light lorries, diagonal tires for agricultural and industrial use.
SILVANIA - It produces radial metal/metal tires, inner tube and tubeless for: lorries, light lorries, buses, microbuses, trailers.
Strategy
Interview with
Mr. Tofan, President and
Mrs. Gheorghiu,
Vice-president of Tofan Group
Question: So, Mr. Tofan, your company is the most known in your sector within your country, in the world you are the 23rd largest tires manufacturer, but could you give to our readers a brief historical background of your company, as well as your professional experience?
Mr. Tofan: The company was established in 1993. At the beginning we started with selling-buying activities and service for tires. In 1994 we built a retreated tires factory with Bandag equipment. In 1995 we bought the control stock package of the biggest Romanian tires factory, Danubiana Bucharest, the ex-rubber manufacturing company and at the beginning of 1997 we took the control stock of another two factories, Victoria and Silvania. At the present, Tofan Group produces about 95 % of the total amount of tire production in Romania and, as you said, we are the 23rd big producer in the world regarding the number of tires produced and amount of sales. In the summer of 1997 we restructured the activity of our company, meaning that we specialized in producing, selling and servicing the tires. The other activities were structured on different entities that are now independent. Tofan Group has now about 10000 employees.
Q: So, you told us about your company but I want also that you tell us about your personal story because I know that you have a big story in Romania.
Mr. Tofan: My personal history begins after the revolution. I was
29 when the revolution took place. After the revolution, in 1990, I tried to leave Romania. I subscribed for leaving in three countries, United States, Canada and South Africa. I waited for an answer for about one year. The answer was no from each country and then I started to do something here. I started to do what I knew to do, which means business with tires.
Q: You are very modest, because you are not going into details, but I read your story and I know that you were the employee of Danubiana.
Mr. Tofan: Yes, until 1990 I was employed at Danubiana and in 1995 I bought it.
Q: Now, I want to talk a little bit about some actual topics. So, how did your company close the year 1997? What are the financial results?
Mr. Tofan: The turnover for 1997 was about 250 million $.
Q: Your company launched an aggressive promotion campaign of your new Montana brand, but is this campaign paying off?
Mr. Tofan: This advertising campaign is still going on. I can tell you that it already have some results. Montana is the first modern tire produced in Romania, with a modern conception. And we can say that not only this campaign is helping it to be successful, but also the price and the quality. Practically, Montana can be compared to any tire produced abroad like continental or Semperit.
Q: So, in 1997, you launched a partnership with distributor Maxima
2000. What are the results of this partnership?
Mr. Tofan : The correct name is AutoMaxima 2000. It's a partnership launched by Tofan Group and opened to entities, which are involved in tires business in servicing or selling. By presenting a package, we managed to attract over 1000 contracts with small partners in tire business.
Q: And that will help small companies and medium size companies as well to stay alive.
Mr. Tofan: First, this is going to help us because it is intended to maximize the number of our clients, as close as possible to the client servicing, keeping in touch with him through these partnerships we launched over the country.
Q: I’m not in tire business but I was wondering if you get this kind of strategy in another countries or is something personal?
Mr. Tofan: There are maybe similar systems but this is original and it’s for the first time applied.
Q: I’m saying this because I’m thinking that this report will be published and I’m sure that other people in tire business will take this idea.
Mr. Tofan: Until the end of this year, our goal is to have around
4000 partnerships.
We finance these partners in order to get modernize us and for customize the servicing, and selling of tires in these 4000 points.
|
Q: So, you have a lot of partnerships. You also took over Silvania, which was very indebted. Did you manage to turn it into a profitable company?
Mr. Tofan: We reduced the looses that Silvania had and now Silvania is in the middle of a modernizing and restructuring process.
Q: And what do you expect from Silvania in the future? Do you have some plans, strategies?
Mr. Tofan: Silvania will be specialized in producing truck radial tires and we will produce there also pumps and other parts necessary for tires. We also have big demands for export for Silvania’s production but we will start exporting only after the modernizing process is over.
Q: You were talking about exports. Your company wanted to build a market share on the American market of tires for agricultural vehicles and heavy lorry. Did it work on the American market?
Mr. Tofan: America is a good market for us, last year we sold there for about 10 million $ and for this year we already have signed contract valuing 20 million $, which means double. Contracts only for tires.
Q: I know, Mr. Tofan, that you are interested in business opportunities. Our readers are also interested in business opportunities. In which areas of your activity are you interested in attracting foreign investment to form joint ventures or to attract only foreign investors?
Mr. Tofan: We are now negotiating with American companies in order to form joint ventures or to buy technology. The domains we are aiming at are those I’m good in and we are doing businesses right now like tires, communications, and media.
Q: What do you mean by communications and media?
Mr. Tofan: We already signed a partnership with an American company for satellite communications.
Practically, we will be the first company in Romania who will have a satellite system and all the points will be connected to it and so to headquarters. And we are going to sell this service to other companies who need it.
Q: So, you are trying to spread your business and, maybe, getting into other businesses?
Mr. Tofan: Exactly and this is going to bring a lot of money.
Q: So, diversifying your activity and using your infrastructure and know-how. You are getting bigger and bigger.
Mr Tofan : Yes, we are trying to do this.
Q: Where is this going to stop? Do you have a goal to reach?
Mr. Tofan: I want to be an important player in Romania, from the economical point of view, if possible the best and to be one of the important tire producers in the world.
Q: You said that you want to be in the top 20 of the tires largest manufacturers?
Mr. Tofan: We will be among the first 20 big producers after we finish this modernization process and this will be in 1999.
Q: Now, Mr. Tofan, I would like to ask you maybe a more personal issue. You are the Romania’s self made man, but what has your most satisfying personal achievement since you are being the president of Tofan Group.
Mr. Tofan: Surely it’s the fact of concentrating the tire production in Romania, 90 %. I previously told you 95 % of tire production in Romania. The difference of 5 % is due to the fact that the other small producers are taken over by us. This means that we have 90 % of the facilities, but we have 95 % of the market. Another important achievement is the fact that we built up a team which is very professional and very young, maybe the youngest in the country because the average age is under 40 years old.
Q: This was the first thing I noticed when I came here.
This is very important, to built a new mentality.
Mrs. Tofan: I guess this is a very important resource for development and getting ahead. In this way we are trying to solve the biggest problem of Romania right now, which is the inherited mentality.
Q: And I think that the example of your group, which is an example for Romanian and other Romanian companies, it’s something concrete that they can see. I think it will create for other people competition and the wish to do something different.
Mr. Tofan: We built up a very young team of professionals. This generation is coming to power. People like Minister Daianu or Valentin Ionescu, young people, open minded, with a different mentality who reach the government, and top management positions of the businesses here in Romania it means that we have a future, that there is a chance for us.
Q: It’s a new image of Romania and is something that we are glad to discover. That’s why we want to portrait, let people know about the changes in Romanian environment.
Mr. Tofan: The main difference between us, the young generation and the older generation is that if we don’t have a glass of water we make it, we create it, we will not wait to receive it. The communism created big dependence on the system. The man was given everything, he was taken to school, he was given a job, he wasn’t let to think by himself and that’s why the people still wait for the system to solve his problems. And the sad thing about the biggest part of Romanians is that they do not understand that the world has changed and there is now a different world, with a different system of values.
Q: We were talking about this with Mr. Daianu and Mr. Ionescu, it’s important to show Romanians something concrete and this is what Tofan Group is doing.
I have a question, which is very personal, but I have to know this because I’m still young as well. How did you think when you were 20- 29. Could you feel that you were going to get to that point or was it your goal in life since you were very young or you didn’t know at all, it just happened by coincidence because you needed it?
Mr. Tofan: I felt this even earlier than 20 years old. I left home since I was 14. I was dealing with this market economy since I was 14, going alone to school, managing by myself. Until the revolution my dream was that maybe one time I can get abroad.
Q: Is it still your dream?
Mr. Tofan: No, not now. Now I know that the biggest opportunities and the ways of making them true are here and now.
Q: As a final issue, what will be your final message to our readers?
Mr. Tofan: Everyone can invest in Romania with small cost and with a big long term effect in what concerns the recovering of their investments. It’s a very good time to invest in Romania. |
© World INvestment NEws, 1998.
This is the electronic edition of the special country report on Romania
published in FORBES
Magazine's enriched with complementary information,
such as full interviews, detailed company files and more.
June 1 st 1998 issue
Developed by AgenciaE.Tv |
|
|
|
|
|
|
|
|
|
|
|
