Perini, Romstal: I’m thinking of investing in another country where investors are welcome

Enrico Perini, the owner of the Romstal group, whose business stood at 350 million euros this year, down 35% compared with 2008, offers one of the most pessimistic forecasts as to the rebound of the construction and installation market. The businessman anticipates the situation will improve on this market as late as 2013, given that design services have plunged by more than 80% this year.

"In 2010 we do not anticipate any increases, but on the contrary. The designers who design homes, offices or industrial buildings are working at 20% of the 2008 capacity. It seems they have no new projects for 2010, so that projects will come up on the market as late as 2011. If they start on the design in 2011, that along with the permits can take about one year, one year and a half, which means the materials produced or sold by us are installed one year from the start of the work, which is 2013 at the earliest," Perini explained.

This year, Perini has shifted focus towards consolidating the domestic business and towards expansion on foreign markets, by opening franchises, with the investments taking up more than 600,000 euros.

"So far 10 franchises have been opened in Romania, 8 in Russia and one in Ukraine. We will open one more in Bulgaria by yearend." Franchised stores take up 150 square metres on the average, divided 70% to 30% between storage and display space, while investment stands at approximately 200 euros per square metre.

"The markets in this area have a very high development potential because they lack construction supplies. In addition, there are no suppliers of such projects, with national reach," says Perini, explaining his decision to expand the Romstal business towards Eastern Europe.

Perini also wants to tap into the renewable energy market, having already invested more than 8 million euros in this regard, in buying land and building a small wind farm in Galati county, while another 10 million euros might be invested in a new project in Constanta county.

"For the near future we are only interested in wind power. Romstal group has completed a small project in Galati county, a 300kw wind generator. The project in Constanta, besides the 7-8 million euros already spent to buy the land will also require 10 million euros to buy the wind turbines, with a 6 to 7 MW capacity," Perini added.

Still he does not rule out the possibility of selling the project to invest in wind projects outside Romania, because he believes investors are faced with trouble from local authorities.

"Unfortunately the project in Constanta has been frozen for "unclear" reasons by the County Council for a about a year, which will not issue the town planning certificate. We are thinking of dropping the project if we cannot get what we want, that is the permits from the local administration, so as to implement the project in time. We will invest in another country, where investors are better received," Perini concluded.