The EBRD’s Business Advisory Services has helped a Romanian construction company to invest in growth.
The construction sector plays an important role in the Romanian economy, providing a six per cent average contribution to GDP, and employing more than 400,000 people.
Thanks to a small business support project funded by Austria, the EBRD has assisted one of the main market players in the construction equipment industry in strengthening their position.
Case Utilaje Constructii was founded in 2006, as the exclusive Romanian authorised distributor of Case brand, and is the fourth-largest manufacturer of construction equipment in the world. Since then the company has been continually growing, offering after-sales assistance and becoming one of the major companies in the construction equipment market.
Investing and diversifying
In order to consolidate its market position, and to diversify into repair and maintenance services, the company identified the opportunity to build a state-of-the-art service centre for heavy construction equipment.
The company approached EBRD’s Business Advisory Services, who connected them with local consulting firm. A comprehensive feasibility study examined the technical, commercial and financial aspects of the investment.
The study concluded not only that the investment was viable, but that it had a return on investment of 8.9 per cent, and a return on capital of over 20 per cent. The consultant also assisted Case Utilaje Constructii to negotiate a loan from a Romanian commercial bank, which covered 50 per cent of the costs of the project.
The new service centre was opened in July 2011. The investment provided a boost to the company’s growth, which resulted in a 43 per cent increase in turnover.