GABRIEL MARIN Managing Director of Omnilogic	CONSTANTIN CAZACU General Manager of MFA

Romania’s E.U. accession has opened new markets and revived manufacturing

With a new market suddenly opening up after Romania’s E.U. accession, local producers of hi-tech goods have ramped up development plans and drastically raised profit expectations. As the opportunities increase, however, so too does the competition.

“We expect more than 60 percent of companies in the Romanian IT&C sector to disappear,” says Gabriel Marin, Managing Director of Omnilogic, a leading company in system integration with a strong focus on the sale of high-end, value-added products. “This is normal, as the worldwide market is consolidating.” But as less viable companies fall by the wayside, Omnilogic has gathered more steam, netting €250 million ($338 million) in revenue. “This figure gives us enough strength to survive whatever happens on the domestic market as well as a strong basis for regional growth,” Mr. Marin adds. With Romania’s recent E.U. membership opening up new markets, the company is angling to raise its target to €1 billion by 2010-2012, he says. The company is considering launching an initial public offering to help achieve the €1 billion mark.

Mr. Marin started up the business in 1992 with $5,000 and five people. One of the keys to the company’s success is a lean workforce of 70 full-time employees and a policy of outsourcing much of the work to keep down payroll and overhead costs.

From the beginning the company focused on markets that promote high-end equipment convergence for networking, data and voice equipment, sealing partnerships with Cisco Systems, Nortel and RAD. The company has also partnered with leaders such as Ericsson and Harris.

Another good example of a successful Romanian producer of high-tech goods is the weapons manufacturer Mechanical Factory for Armament (MFA), which was founded in 1951 and privatized in 2003.

Romania had been a renowned producer of specialized military products for APCs, tanks and infantry vehicles, among others, but the industry has encountered difficulties. Romania’s E.U. and NATO membership is, however, expected to revive the sector.

MFA is now upgrading a number of infantry vehicles for the Romanian army and the company plans to export these products, says Dr. Constantin Cazacu, General Manager and President of the Board. The company has also set up joint ventures with several international companies to manufacture armored wheel-tracked vehicles.

“We are working with General Dynamics, an American company, for the general assembly of the APC Piranha III C and we are already partners with General Dynamics in Europe. We have also worked with Harris Corporation,” Mr. Cazacu explains. MFA has also hooked up with Israeli company Rafael in a joint venture for manufacturing the OWS system, an automatic turret. He notes that the next stage of the company’s development plan is to manufacture civilian products such as oil extraction parts, spare parts for trucks and electrical systems. All products are produced at its 30,000 square meter plant in Mizil, Romania. The company turned over $15 million in 2005 and $20 million in 2006.