After the first decade of record growth, up to revenues reaching almost RON 400 million in 2017, the entrepreneur Horaţiu Ţepeş has a clear-cut plan for the next 10 years of Bilka, a company that he wishes to pass on to the next generations.

The new plans set up the premises for sound growth also in the decade to come, including an investment budget of EUR 20 million for a new production hall and the opening of a factory abroad.

“From the very beginning, I must confess that we have no intention to give away even 1% of our company because we do not need any investment fund support or financing. Our indebtedness degree is very comfortable and we have a development plan well defined for the next 10 years for sure. Our strategy is finely tuned, we know what we have to do”, replied Horaţiu Ţepeş when asked if he considered selling Bilka, given the fact that the news of Romanian entrepreneurs selling their business developed in crisis times has been in the headlines over the last years.

However, Bilka, a metal roofing system brand originating in Brasov, is not for sale, although the company’s financial figures after a decade of activity are attractive to many investors who constantly contact the entrepreneur. Last year, the company’s net turnover amounted to RON 271 million (approx. EUR 60 million), being 41% higher versus that of the previous year; the growth in the first semester was of 54%, up to RON 147 million.

The company has been a leader in the metal roofing industry since 2012, with a market share reaching 30% last year; its indebtedness degree stands at 24.23% and the gross profit margin at 12.2%. 95% of the turnover results from the company’s own products (all the roofing system components made of pre-painted steel) and the remaining percentage results from the sale of auxiliary products (a complete roofing system also requires accessories such as attic windows, anti-condensation film, and screws, products which are sold via strategic partners).

The current area of 4.5 hectares, consisting of five production compartments totaling 29,000 square meters and offices of approximately 4,000 square meters, has become insufficient for the entrepreneur’s future plans. “Considering the current season, all these cease to be sufficient. We will definitely have to do something, particularly as concerns the development of the products dedicated to the industrial sector”, states Ţepeş, suggesting the strategic focus of Bilka for the following years.

A NEW DECADE FOR BILKA

Horaţiu Ţepeş has made time for the interview, although it is the busiest period in this industry: August and September is the peak season in terms of demand, a season which starts immediately after Easter, usually in May, and ends before the winter holidays when the demand slows down, with lower volumes in January and February. “What is different now as compared to the previous years is the optimism on the market and the future plans which are productive in all respects, considering that the construction needs in Romania are also very high”, noticed Ţepeş. In this peak season, the growth familiar to Bilka has already begun to take shape. “According to our history-based calculations, we will probably exceed RON 400 million by the end of the year, which means that we keep the 40% annual growth tradition. Although we reached high results, the market also worked in our favor – the existence of demand is a result of past investments as well.”

And still, how much room is there for growth? The entrepreneur describes a few of the criteria taken into consideration when analyzing market evolution. “There are several indicators that we monitor. For instance, pre-painted steel is our raw material; the level of the Romanian market in 2015 was of 213,000 tons and in 2016 it reached 256,000 tons. If we look at Poland, Europe’s market leader in the consumption of pre-painted steel, the market is of 900,000 tons. Thus, from calculations correlated with the population of Poland of approximately 40 million people, the resulted potential market is of 400,000 – 450,000 tons of pre-painted steel.”

As per the entrepreneur’s assumptions, pre-painted steel, which is used especially in the construction of industrial halls and metal roofs, may reach a double volume on the market within 5-7 years. He expects the demand for metal roofing in Romania to grow, the reason for which the company’s plans for the next years are shaped in that direction. And if Bilka’s investments so far have targeted mainly the residential sector, the investments of the following years will be towards the industrial sector. “We are currently preparing our budget and the investment plan related to the industrial sector, consisting of the sale of turnkey industrial halls. The budget amounts to approximately EUR 20 million and the project also includes the construction of an industrial platform of 10 hectares, the procurement of the necessary equipment and raw materials, the designation of the responsible team and market development, of course.”

At present, the manufacturing of industrial products accounts for 10% of the company’s turnover, while the remaining 90% is represented by residential products. Over time, after the consolidation of the investments made between 2014-2016 for the development of the residential division and after the implementation of the investment plan targeting the industrial division, 40% of the production will be generated by the industrial sector and 60% by the residential sector. In the view of Horaţiu Ţepeş, such maturity will be reached in 2018 as concerns the residential production and in 2022 with respect to the industrial one.

Article published in the “Business Magazin” periodical of September 2017.