In Romania one cannot reliably distribute products countrywide because the infrastructure does not allow delivery within 24 hours everywhere in the country, says Christophe de Korver, general manager of logistics group and supplier Gefco Romania part of Gefco, which is controlled by RZD, Russia’s national railway company.
“To have a reliable distribution solution, you need to have two sites, one in Bucharest, one in the west [of Romania, therefore on both sides of the Carpathian Mountains],” he added.
The construction of a highway to cross the Carpathian Mountains is something carriers keep asking for, while the Romanian government decided to invest hundreds of millions of euros in such roads as the highway built by Bechtel between Campia Turzii and Gilau (Transylvania), where cost per kilometer reached a record high of EUR25 million.
Another such investment is the Transalpina mountain road, which can only be used during the summer and is more suitable for tourists. On the other hand, 23 years after the fall of communism Bucharest still does not have an operational beltway and there is not a single two-lane per way road to cross the Carpathian Mountains.
Moreover, the government sidelined the Pitesti-Sibiu highway, taking it off the priority list, even though this leaves carmaker Dacia and automotive component makers in the Pitesti area dependent on the current road that passes through the Olt Valley where landslides are a frequent occurrence.
Gefco’s general manager first talked about a highway to cross the mountains last year, saying that it would exponentially improve competitiveness of the Constanta Harbor, connecting it to the Western European infrastructure.
Gefco Romania has been operating a new 2,000 square meter logistics platform in the Cefin Industrial Park of Arad, western Romania, since September 15.
The opening of the new logistics center is part of the strategy to develop logistics operations in the west of the country. The location is very important to Gefco, because it has industrial clients with operations in the West, Christophe de Korver said.
The new facility should generate yearly turnover of at least EUR100,000 to EUR200,000 from warehousing alone, and the projection does not take into account the whole space occupied, de Korver said.
“The investment for the moment is not so big (…) we have committed on a five-year contract for this space.”
The company plans to expand to 5,000 square meters from the current 2,000 square meters in the next two years, he added.
“The cost for the warehouse was at the usual market level. (…) The difference in rent is 5% less. The land is a bit cheaper here.”
The new center in Arad opened several months after the inauguration of the center in Craiova, which will help the turnover return to growth this year.
“[As for the turnover] we hope to be between 10% and 15% higher than last year. Our activity in Craiova has reduced a bit (because Ford stopped production for a few days i.e.).”
Gefco is trying to compensate with new customers in the area like Alro, which does not have any problems, Christophe de Korver said.
The turnover could reach EUR48 million in 2013, after having dropped 3% to EUR42.3 million last year.
The company is also planning to sign a contract for a warehouse in eastern Romania.
“For the east we still have to think about the right solution in Moldavia or the north. Today the studies show Bacau as being a better position but there are no real good projects for the moment and Gefco will not invest themselves in something in Bacau, for example, so we’re trying to find partners, like, for example, here (Arad i.e.) we have the partner who invested in this warehouse.”
The company also wants to expand to Constanta, because the “short sea and Black Sea will be the future” and it can reach Russia quickly without crossing Ukraine, Moldova or Transnistria.
(English version by Loredana Fratila-Cristescu)