Q: As 2023 was the best year for the multi-decade presence in Romania of your company, with astonishing 77% yearly growth in your business. So, how was 2023, why, and what were the main engines of growth?
Mr. Victor Vasluian: 2023 was a very special year for Terra Romania, but it was very good for the whole construction equipment market. The market grew by 50% compared with 2022, reaching an all-time high of ~4000 new units.
This growth was driven by EU subsidized programs, which accounted for over 60% of our retail structure.
But of course, such a result came with a lot of additional work, stress and pressure.
We have a very stable and experienced team, and we were able to monitor all these projects and to implement them in due time, to respect all projects requirements.
Q: When somebody’s attention is caught but such business result, for the first time about the industry you’re doing business, what they should know about Terra Romania?
Mr. Victor Vasluian: Terra Romania Utilaje de Constructii, alongside another 2 operational companies in Romania, Terra Palfinger and Terra Rent All Romania are part of an international group, family owned, Industrie Holding.
Terra Romania Utilaje de Constructii was founded in 2001 and is distributing and servicing the following premium brands: JCB, Dynapac, HBM Nobas through its Construction Business Unit and Sennebogen, Arjes, Pronar and Ruble Master through its recycling & industry business unit.
We have in total 120 employees, 70 working in aftersales. We have 50 mobile service vans.
Beside the HQ located in Bucharest (Tunari), we have another 4 branches located in Brasov, Timisoara, Turda and Iasi.
Q: We hear all the time about record public amounts directed towards infrastructure spending in Romania. For the general business environment perception, there might be a delay between putting the money to work and seeing the results.
Mr. Victor Vasluian: As a proxy between projects for building Romania’s infrastructure and the actual building, what can you see specific about the value added of those projects, there completion, and your role in (re) building the national infrastructure?
I believe that the level of development of a country depends on the degree of development of its infrastructure. Since we have been in this business, we have been expecting the real development of national infrastructure. Now, for the first time things are looking to move in the right direction.
I really believe that we cannot afford to lose more time delaying these projects.
A developed infrastructure will bring economic growth, foreign investments, connectivity, new jobs, quality of life, etc.
We are proud that with the solutions we are offering and with the equipments we are distributing, we can contribute to the country’s development.
Q: Probably Romania goes right now through the largest effect of absorbing EU funds, including one-shot PNRR. Can you imagine for our readers your specific business image and the local economy image the business evolution without such funds? Once those funds come to an end (and they will come), what should replace them?
Mr. Victor Vasluian: We experienced years without having EU funds, and we struggled in that period. Definitely the EU subsidized programs boost the acquisition of equipment, these being seen as an opportunity. But I also think they played an important role in market development. The Companies had access to new, performant equipment, they could see the benefit of all the modern technologies, higher productivity, less fuel consumption, etc. So, in a few years, when the funds will come to an end, we hope to have a more mature and educated market, with Customers investing in new equipment to increase their market competitiveness.
Q: What have you learnt from the supply chain disruption crisis that still had effects after the pandemic? How have you dealt with it? What are the lessons learnt?
Mr. Victor Vasluian: Supply chain disruption affected our industry heavily. Standard delivery times of weeks changed in months and even those were sometime not respected. To deal with it, I remember that, as an example, in 2021 we ordered the whole stock for 2022! We also benefited from the group’s stock synergies. Being present throughout the CEE region, we were able to find the required units in the stock of another group company. In the meantime, delivery times have returned to a more normal situation, but we still maintain these good practices.
Q: What makes you unique comparing to other competitors?
Mr. Victor Vasluian: I don’t know if it makes us unique, but I would like Terra to be known not just as a company that solves customers’ problems, but as a company that genuinely cares about its customers’ problems. We strive to develop and maintain long-lasting partnerships with our customers, because I sincerely believe that they are mutually beneficial.
Q: Which is the milestone project for you in 2024/2025 and why?
Mr. Victor Vasluian: For 2024 / 2025 the milestone project is the development of our existing branches in Brasov, Timisoara and Turda. In Brasov the construction started this summer, the completion being scheduled for Q1 2025. The development of the Timisoara and Turda branches are in different stages of design and approval. With an investment of more than €7.5 million, we are committed to our customers, partners and employees to provide better service and coverage, better visibility and, of course, better working conditions.
Q: What factors were more challenging for your business? Was the high inflation from the recent years, globally? Was it about the financing costs rising because of a surge in prices? How did you manage?
Mr. Victor Vasluian: All the factors you mentioned have affected our business. Disruptions in the supply chain led to successive price increases and the need to increase working capital to have better availability, which ultimately led to higher financing costs.
Whatever the challenge, we try our best to adapt to the situation and make the best of it.
Q: What where the lessons learnt in more than 20 years in Romania about dealing with a crisis in your industry?
Mr. Victor Vasluian: The lessons we have learned over the years, in times of crisis or declining volumes, have led us to diversify our product range with products that complement our existing portfolio. We also approached other market segments, to compensate for possible decreases in the main business line.
But I think the most important thing was to keep our team together even in the most delicate moments. We probably have the most stable team in the industry, colleagues who have been with us since the beginning of the company.
Q: How would you describe a long-term sustainable future for your business model, in the context of the new rules regarding corporate sustainability?
Mr. Victor Vasluian: Our goal is to operate profitably by integrating ESG factors into our overall strategy.
Firstly, every year we do sponsorships for nonprofit agencies that provide social services and humanitarian aid for disadvantaged categories, for associations that aim to correct the existing imbalances in society, and which can bring a reconverted workforce to the labor market.
Secondly, I would like to refer to the equipment we are selling. All of them meet legislative requirements regarding emission control. Stage V is the latest stage of engine emission legislation designed to reduce pollution for construction machines. We also started to introduce the market of electric machines with zero emissions to meet the sustainability goals.
Then I would like to refer to the developments in our new facilities. All our new branches are designed and built based on the net zero energy principle. That means that the building produces as much energy as it consumes. This is achieved through renewable energy sources such as solar panels, heat pumps, and quality insulation systems.
Last but not least, I would like to refer to our employees. I firmly believe that the employees are the organization’s most valuable assets. But only if they are valued and motivated. That’s why at departmental levels, we try to stay as close as possible to them, to understand their concerns, their aspirations and to offer them as much as possible a professional path in line with their values.
You can also find the full interview in the document below:
