Please, tell us the history of the company before 1990 and what happened afterwards.
Uzinele Sodice Govora is the second soda products company built in Romania, the first one being in Ocna Muresului - a very old factory. We started production in 1959 and until 1973 the production capacity has increased almost six-fold. To our basic product - soda ash - have added, with the passage of time, caustic soda - produced through a chemical process - sodium silicate and molecular sieves. The plant has been built to satisfy the Romanian market needs, a very big part being exported in the CAER countries.
After 1990 the changes of the traditional Romanian markets and the relationships with other countries were seriously altered. The consumption of soda in the Romanian market continuously decreased. In 1990 when CAER dissolved, all the traditional commercial relationships changed, mainly because of the appearance of competitors - other soda producers in Western Europe. Our main product remained the soda ash that is used mainly in the glass and detergent industry.
Due to all these facts stated above, the plant had to reorient its market policy thus causing major changes in the company policies. The management activity has been focused on two main directions:
Concentration on our basic product: soda ash. We set up a set of actions targeted to obtain an improvement of quality equal to the level of the best producers in the world. This also implied the modernization of the factory and the reduction of costs in order for our product to be able to face competition in the international markets.
Restructuring of the company by giving up the products that could not face competition, particularly caustic soda, which due to the technology we use could not resist competition from electrolytic caustic soda. We are trying to promote other products also needed on the market. The main product we are trying to promote now is a powder detergent that is already very well known on the Romanian market and which has found a place among the rest of the detergents on the Romanian market.
In fact we needed to change the way we acted on all fronts. We had to create a commercial department adapted for the requirements of a competitive market, together with a marketing and economic analysis department that we did not have before. We have also established a foreign trade company - Govcrest - in which we are the shareholders and which is very well known on the soda market.
Another problem we had to solve was related with obtaining the necessary resources for the modernization program. For that purpose we started working with the Commercial Romanian Bank which insures our financing.
A very important chapter was the one regarding the personnel. The changes that affected the company's structure were directly related to major changes regarding the personnel. We had to decrease their number from 3.600 in 1993 to 1.400 in the year 2000. In parallel we have been developing actions concerning the training of personnel. To give you an example, all the directors in our plant have a national certificate that entitles them as experts in production management. This training process is permanently ongoing at all levels, both with specialized personnel within the company and with experts from outside.
A further problem we had to tackle was privatization.
Being a medium company within the large group of
synthetic soda companies, it is not easy to be privatized.
We had an attempt regarding privatization, the SOF
having some talks in 1997 with the American company
Harris Group. These talks did not come to an end
because Harris Group merged with IMC Global. Now
we are on the list amongst other Romanian companies
that are going to be privatized by the World Bank.
Hopefully in a short time we will know the name
of the privatization agent agreed by the World Bank.
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In order to define the present situation I should say that nowadays US Govora is one of the most important soda ash plants in Central Europe. Besides the Romanian market we also have access to Central European and Mediterranean markets - gaining access through the Constanta port - and even to Latin America.
Regarding our structure, we are still missing the resources for the supply of our main raw materials such as salt and limestone. These resources exist and are of very good quality but they are now part of the National Salt Company (Salrom). Energy and railway transportation prices also influence our own considerably.
Today we export an important part of our production (80%). The company is already known in many areas. We are ISO 9001certified. For some months now we have already started a dense soda ash production plant that makes our product to be at par with the best products in Europe. This has allowed us to become suppliers to some of the largest glass and detergent concerns in the world.
The restructuring processes within the company will continue in the future. To the above-mentioned objectives we will also add interest on taking over the raw materials resources and energy.
Could you give us some more statistics about your company?
In Romania we have almost 2/3 of the market, although unfortunately the market is very deflated now. Our annual production is now almost 40% of the capacity. Our turnover is around 600 billion lei per year. Due to the conditions I have mentioned before, the profits are still very low.
What line of products are you mostly exporting?
Mainly, we are exporting soda ash and soda silicates but, starting this year, we are also going to export detergents. The percentage of our costs that goes into energy is between 50-60% which compared with our competitors, that spend half or even less of this amount, is quite considerably.
What would you say is your competitive advantage?
Our competitiveness is based on several elements:
Very good raw materials and close at hand.
Our closeness to countries from Central Europe that are big consumers of soda but which are not and will never be soda producers.
An inexpensive and well-qualified labor force.
Do you have a final message you would like to transmit to our readers?
I know that Romania was, is and will ever remain
an important country in our geographical area. The
present situation is certainly going changed in
not such a long time. And within this context, US
Govora is and will remain an important player on
the soda market. |
UZINELE SODICE GOVORA