Costin Borc, head of the company owned by the French group Lafarge, sold around 200 railway wagons that had been accumulated by the company, for 1.1 million euros, which will help him bolster results.
Instead of spending hundreds of thousands of euros each year servicing these wagons, which the company held in its patrimony and which were of no use to the core business, namely aggregate and concrete production, Borc decided to sell these assets, that increased fixed costs, to specialised operators.
"The sum we raised through the sale of these wagons will improve the company''s net result," Borc specified.
In the first nine months of this year, the company reported losses standing at 220,000 euros, and 25% lower turnover, down to 12 million euros.
The company Borc has run since 2002 is not experiencing its first spin-off, as other activities, such as those involving security services and automatic concrete mixers, were sold during previous years.
A former co-ordinating adviser to premier Radu Vasile between 1998-1999, Costin Borc was awarded a doctor''s degree by Wisconsin Madison University in 2000, and was then recruited by Lafarge for one of its US plants. He took over the management of concrete and aggregate operations carried out by Lafarge Romania in 2002. Under his leadership, the company has positioned itself as one of the biggest players in the domain, but he has not forgotten to apply a very simple business rule. In order to register solid performances in the core business, Borc has focused on the development of this sector and gave up assets that were not linked to concrete or aggregates - as the latest deal, the sale of the 200 wagons, again illustrates.
"Costs linked to the maintenance and repair of the wagons stood at around 1,000 euros per wagon, in a single year. There were all kind of hurdles: getting licences, paying taxes, wagon modernisation, and we decided to sell them to a private carrier, which has more experience than us," says Costin Borc. The 200 wagons the company owned were inherited from concrete and aggregate companies that had been taken over in time.
The spinning off of railway transportation unfolded in two stages. First, the company''s officials sold 60 wagons, at a price of 5,000 euros per unit, to a private carrier. The remainder of the 200 wagons, were sold through a tender. "We were surprised at the high level of interest we attracted. Both transportation and scrap iron companies expressed an interest. However, the winner was a company planning to export the wagons," Borc explained. These 140 wagons were highly attractive because "there is high demand on the European market". The company has been selling off everything that is not part of the core activity. In late June, the number of employees dropped by 70 from the same period of the previous year, to 302 registered employees.
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