“We had an automation program to be run by 2020 and stepped that up and are trying to do it in in two years, so as to complete it in 2018. We are trying to speed up its implementation, even though our resources are limited. The increase in production capacity will depend on what happens with the workforce in Romania,” said Cristian Covaciu, the general manager of IPEC, a company that makes 40 million parts a year.
He was in Monte Carlo last week where he represented Romania in the competition of the EY World Entrepreneur of the Year organized by audit and advisory firm EY.
Migration abroad, expansion of business of some companies and new investments (made especially in the center and the west of the country) have created a massive shortage of labor in those areas. As a result, companies are looking for ways to attract and keep staff, which has also led to a significant rise in wages, beyond the increases induced by the minimum wage raise.
“A rise in wages cannot come via a government decision, but via an improvement in the efficiency of the economy and that is a process that takes time. If the efficiency of the people in the country is EUR5/hour, it’s no use wanting to pay EUR6/hour in your position as an employer, because you can’t afford to. We have reached EUR17 to EUR18/man/hour efficiency through automation and want to reach EUR40 to EUR45/man/hour by 2020,” Covaciu added.
“Of course, as a result of automation we were able raise the wages of our employees by 28.3% last year.”
The IPEC founder and general manager did not specify how high the average wage in his company was, but said further raises would follow, depending on the improvement in efficiency in his company that automation generates.
“We now have 650 employees and demand far greater than our production capacity. The plan is to boost production capacity by at least 25% by yearend, which we will either do or do not depending on whether we can attract the necessary people in the process. We would need 50 to 100 more people.”
IPEC, an almost EUR22 million business, was established in 1990 and has 250 industrial robots, which the entrepreneur says is the highest number of such machines in the country. Its main customer is IKEA, for which it has been working for 21 years.
Although many industrial employers have complained about the fast-paced increase of the minimum wage over the past few years, Covaciu said he had no problem because of that because wages in the plant were already higher than that.
(English version by Loredana Fratila-Cristescu)