Deutek: We ran checks on clients for a week because of high non-payment risk

Bruno Negoita, general manager of construction materials producer Deutek, held by American investment fund Advent, says this year he has been more cautious about clients, whom he checked for a week before delivering the merchandise, amid a business decline against last year.

Deutek's business will see a decline this year because of the slow rate of recovering money and because of the decline in demand and in the average price of finishing materials.

The company posted a 38.1 million-euro turnover last year, of which 8.6 million euros were generated by the adhesives business Bauleiter

"This year paint and plaster will see a turnover decline, but we don't want to reveal by how much yet. We can only say our drop will be lower than the market's consumption decline," says Negoita. Consumption of varnish and paint fell by 25% this year against last year, whilst the adhesives sales decline amounted to 30%, according to data supplied by the leading players on these markets.

Negoita says the company's managers and sales representatives had to completely change their way of thinking and working methods.

"The biggest problem in 2009 has been choosing the clients with whom we can do normal business, i.e. get the full sum owed for the products sold. We had to decline many orders because there was no guarantee that we would get our money back or to there being a very high risk of non-payment. In other words, we chose the safe route instead of boosting our market share at all costs. There were cases where we ran checks on a client for a whole week before the merchandise was delivered to them," says the Deutek manager. He says there have always been swindlers on the market, but that in 2009 the non-payment risk also came from honest, but crisis-troubled businesspeople.

Because of the many distributors filing for bankruptcy, Deutek had to change some of the companies it was working with to sell its products in order to preserve its level of distribution. "This has not been easy because the strategy of most merchants and distributors in the sector was to reduce the number of suppliers and of products, i.e. the exact opposite of what we wanted," Negoita explains.