Henkel group has three divisions operational in Romania – construction supplies, personal care and household care products.
“The 2013 results keep us among the top ten markets in Central and Eastern Europe for the group in terms of revenue and profit. All three divisions contributed to last year’s growth.”
One of the most important projects of the group in Romania last year was the opening of its third plant in the country, in Roznov.
Niculae Olteanu would not say what was Romania’s position in the CEE ranking or which were its competitors. Romania generates 93% or 94% of the revenue of the local subsidiary, while exports to the Republic of Moldova, Hungary and Bulgaria account for the rest.
Henkel has three construction materials plants in Romania, in Bucharest (Pantelimon), Campia Turzii (Cluj) and Roznov (Neamt), with a total capacity of 700,000 tons a year.
Niculae Olteanu says the group does not have any plans for a personal care or household care product plant in Romania any time soon.
The Henkel group, which arrived in Romania in 1994, has 30 brands on the local market, 20 of which part of the personal and household care ranges. Its strongest brands in the country are Persil (detergent), Syoss (hair care), Pur (dishwashing detergent) and Schwarzkopf (hair care).
“It’s important to launch new products and brands on these segments. Syoss, for instance, was launched two or three years ago and is now one of our top-selling brands. More than 40% of the sales to end users come from products that have been available for less than three years.”
Henkel’s product portfolio targets all types of customers, from price-conscious to those only interested in the benefits of a product and the company adjusts it to the type of consumers in a country or an area or on a store by store basis, Niculae Olteanu says.
Henkel’s products can be found in 10,000 modern and traditional retail stores in Romania.
Henkel Romania’s president says the company did not hike prices during the crisis, even though raw materials became more expensive. Under the circumstances, the profit margin was 7.5% in 2012, according to the latest available data, compared with 10% in 2008, the last year of economic boom.
Henkel’s prices are adjusted to each market, but Niculae Olteanu says they cannot be synced to wages, or else the company would be selling at a loss in some countries. He, and other managers believe that it is not prices that are high, but salaries that have not kept up.
Henkel Romania estimates growth for 2014, on the back of a slight rebound in consumer spending, its president said.
“Consumer spending in Romania remains much lower than in the region.”
For steady long-term consumer spending rebound new jobs would have to be created, which will show in spending and taxes, Olteanu said.
“A VAT cut would be necessary, too, on condition that it shows in the shelf price.”
(English version by Loredana Fratila-Cristescu)