Greu talks in a Business Construct interview about challenges on the construction market, major projects won in the past year, as well as about the company’s future plans.
On a market where real estate projects continue to be as rare as oases in the desert, and constructors are more “thirsty” then ever, Bog’Art SRL, the flagship company of the group by the same name managed this year to secure the leading contracts available in Bucharest, especially on the office segment.
ZF met Greu at the modern Bog’Art Center, nearby Cismigiu park, a sign that the company also likes to construct glass buildings for its own use, not just for clients. Earlier this year, owner Raul Doicescu said at the same headquarters that “investors on the construction market were not encouraged.”
However, the company has been active this year. Bog’Art managed in the first few months of the year to secure several major projects, with a cumulated value of around EUR100 million, according to Business Construct calculations, enough to ensure work for next year as well.
“Today the market is quite varied, you take whatever you can get” and “profit is important, but at this time it’s not our no. 1 priority” are two conclusions of the discussion with Sorin Greu, who has been working for Bog’Art since graduation from the faculty.
He was first head of construction site, then production manager, executive manager, and for the last eight years he has been general manager of Bog’Art SRL, Doicescu’s right-hand man.
He is also involved in the management of the other companies in the group, with an estimated turnover of EUR120 million in 2012, as representative of the majority shareholder.
What Bog’Art has done
The first Bog’Art project that you come across if you arrive in Bucharest by plane is the new terminal of Henri Coanda Airport – Bog’Art built the metal structure and the covering. On your way to the city, if you go past the ring road, you will find office building Platinum Business & Convention Center, developed by Israeli millionaire Eyal Ofer, and built by Bog’Art. The company also constructed the more famous Cathedral Plaza tower in central Bucharest, developed by the same investor.
Back to northern Bucharest, on the way from Henri Coanda airport to Bucharest, Bog’Art also built Baneasa Shopping City mall held by Gabriel Popoviciu, the new headquarters of the US embassy to Bucharest, located close by, Victoria Park business park, held by Immofinanz “across the street”, and when you get to Piata Presei Libere square you see the City Gate towers built by Doicescu’s company, as well as UniCredit’s new headquarters, a building owned by Bog’Art.
How 2012 has gone for Bog’Art
Sorin Greu says in principle 2012 was almost the same as 2012, but the second part was better as the company won more projects.
They include Floreasca Park business park, developed by Portland Trust, the Green Gate building developed by Czech-based S Group, as well as two blocks of apartments in Edenia and Optima residential complexes developed by Adama. Greu says he cannot provide the value of the contracts because of confidentiality clauses, but estimates Bog’Art’s portfolio is currently worth around EUR100 million and consists of around 15 projects of all sizes.
As the company secured new contracts, the company’s manager says 2012 was a better year for Bog’Art and that these new projects ensure work continuity and stability, including for next year.
The overall construction market recorded a significant decline of around 30-40% after the onset of the crisis.
Whereas in the infrastructure sector there were a few major projects financed with EU funds, which helped resuscitate the industry to some degree, on the civil engineering and industrial segment very few investors continued their projects or started new ones, so competition over contracts was tight this year and mainly came from foreign companies, Greu explains.
“The market of civil engineering and industrial constructions is faring worse at present than in 2009-2010. During the first two years of crisis many projects were continued out of inertia, after they had been started during the boom years. We are optimistic and the market could rebound, but definitely not very soon,” the general manager says.
Bog’Art SRL posted a turnover of around 325.3 million lei (EUR76.8 million), according to Finance Ministry data and for 2012 the company estimates a turnover of around EUR80 million, “slightly up from last year, thanks to the new projects,” explains Bog’Art’s general manager.
(English version by Daniela Stoican)