How did this mechanical engineer develop a EUR4 million bakery business?
“In 1991 I mortgaged my parents’ house and took out a loan from the bank to develop a two-floor house in my parents’ yard where we would bake bread. I became a baker, my wife and mother would knead the bread that we ended up selling it in Timisoara stores,” recalls Liviu Bugescu, 57, a trained mechanical engineer, who set up the Prospero bakery business.
The company reached 16.8 million lei (EUR4 million) sales last year and a profit of RON1 million (EUR240,000), according to Finance Ministry data.
Before starting his bakery business, Liviu Bugescu was a mechanical engineer at a state-held enterprise involved in processed wood for export, which had started to make layoffs.
“During those days I was also a cab driver. One day, a colleague of mine, Mircea Danciu, suggested we should start a bakery and I said yes. I was supposed to handle the construction, he the equipment,” says the Timisoara entrepreneur. In his parents’ home, he built a two-floor building equipped with a brick oven.
“After two months, my partner withdrew from the company. Six months after I had taken out the bank loan, the interest had climbed from 17% to 72%, and I wasn’t making any money with the open hearth oven. I had to sell everything in the house, carpets, even jewelry.”
The first Prospero bread was produced in the Bugescus’ bakery in spring of 1993.
From several hundred breads per day baked in a brick oven, the couple ended up baking 5,000 loaves a day in three brick ovens. Thanks to the significant demand for open-hearth baked-bread, made with Hungarian flour, in 1997 Liviu Bugescu expanded production by adding two more brick ovens.
The entrepreneur also developed bakery stores in Timisoara, as well as a 300 square-meter minimarket.
“We have had a very good relationship with the banks, all we have developed was with money from banks. For 11 years we worked with BCR. When word was out that we wanted to build a plant in the Timisoara industrial park, it was the first time banks came to us and we agreed to work with ING.”
Bugescu decided to move the production center from his parents’ yard to the Timisoara industrial park because around the year 2006 norms on food quality and safety were being introduced to the market.
He took out a EUR700,000 loan from ING and rented a 3,300 square-meter area in the industrial park, where he developed a bakery plant. On a plot leased from the Timis County Council, the company inaugurated a new production facility in 2008.
“We started to bake bread at Western standards. Moreover, we have developed our range of products and have started to bake other products as well, even cakes.”
The Bugescus continue to expand their chain of bakery stores, which currently has 13. Previously the bread was distributed in store chains such as Profi, Selgros and Metro. At the end of 2009, the Bugescus opened their first Prospero Delicii coffee shop.
At present, the Bugescus manage five coffee shops. The entrepreneur has also developed his business with EU funds, taking out EUR1.2 million.
“We will continue to develop our business. We are even planning to open a new store in Timisoara in December. Our children handle the coffee shop chain.”
(English version by Daniela Stoican)