Few businesses started in the 1990s have stood the test of time and remained functional or in the hands of the founders. But what is the secret of the resilience of a business in an entrepreneurial environment that has changed frequently over the last three decades?
“I can’t wait to turn 30, because, from the statistics I know, globally, 30 is the average lifespan of an entrepreneurial business,” says Corneliu Bodea (51), co-founder and chief executive officer. (CEO) of Adrem, a group specialized in the development, design and production of energy efficiency solutions. He admits that in Romania the average life span of a business is only seven years, but he likes to relate to the international entrepreneurial environment. Especially since its objectives are to increase the duration of activity of a local business.
Settings on the go
Founded in 1992, by brothers Adrian and Corneliu Bodea, the group has under its umbrella several companies that offer services for energy infrastructure or large projects to automate electricity and natural gas networks. Last but not least, one of the companies in the group aims at renewable energy and energy efficiency activities. “We currently offer services for all electricity distributors, CEZ, EON, Enel and Electrica”, states Corneliu Bodea.
With a team of 1,500 employees, the group had to reduce its activity and send 700 employees into technical unemployment, once the state of emergency was established. However, it was a temporary situation, and Bodea says that he resumed the entire activity and returned with all the staff active in the field after only two months.
As for office staff, most still work from home. “Now, we have 20% of the staff at the office,” says the entrepreneur, explaining that he took all these measures to avoid exposing his staff to the risk of getting the new coronavirus. He is aware that the crisis is far from over and believes that this problem can be overcome if it is “treated with respect”.
Working from home
Corneliu Bodea says that the pandemic will greatly change people’s behavior and consumption habits. And he already sees these changes, including in his company. “We also have some rules in this regard. All meetings of more than two or three people are done online “, adds the entrepreneur. He no longer meets physically with his partners. He says that until this health crisis he used to travel to talk personally with business partners. Now he has given up this practice.
The Adrem Group also has a line of business related to the metallurgical industry, and 90% of this activity is represented by exports. But travel is also stopped during this period. He admits that he does not feel very comfortable working from home because his generation is taught to make many of the decisions with the “pencil on paper” and after physical meetings with partners. “My generation may regret the moments when the conferences were done face to face”, adds Corneliu Bodea.
However, he says that working from home has also brought positive things, both for the communities and for the social life of the employees. As for the community, he says the reduction in pollution and congestion is visible. “I’m sure people will find better ways to socialize at home than at the office,” says the entrepreneur. He generally believes that employees will thus have more time for the family and will learn to combine professional and social goals.
Personally, Corneliu Bodea believes that the situation we are going through is not well managed. He says that at the international level, most governments have not correlated the measures, so that certain procedures are applied in the same way everywhere, which has led to quite large increases in the infection rate in some areas. Moreover, it did not report coordination even at the level of the European Union.
Plans made in advance
Even if the business was affected by the health crisis, Bodea says that the company has not lost in terms of profitability. Last year, the company had a turnover of about 180 million lei (37.89 million euros) on the line operating in the energy area and almost 5 million euros for the one specialized in metallurgy. Corneliu Bodea says that in the first half of this year, the company’s revenues decreased visibly, but the profitability was higher than in the first six months of last year. What is the explanation?
“We were in a program of restructuring and reorganization in terms of costs for more than two years,” says the entrepreneur. With the onset of the blockage, the company’s management took rapid measures to reduce costs, anticipating an atypical situation since the beginning of the year. However, he admits that he also benefited from state aid for the period of technical unemployment. “It was the most effective help the state has given in this pandemic,” the entrepreneur adds.
Corneliu Bodea does not expect a quick resettlement and believes that the second half of the year will be quite difficult for the economy. He gives the example of his company’s activity and says that most of Adrem’s customers were also hit by the health crisis, which determines him to anticipate a contraction for the next period. Many will be much more restrictive with operational expenditure, which will also be seen in the signing of new contracts.
“I am very reserved and very attentive. At the same time, I believe that a substantial economic crisis is coming “, says Corneliu Bodea, specifying that he intuited from the beginning of the year that a health crisis will bring after it both an economic crisis and a” social disturbance “. And he cites street movements in the United States and Western Europe as examples.
He says he is concerned about the deflation announced by the European Central Bank. “Deflation is the first sign of a crisis. It is a crisis of consumption “, points out the entrepreneur, explaining that the current crisis is totally different from the one from 2008-2009, which was a financial one, being hit” the top of the economy “. This time, the blow is received directly in consumption, says Corneliu Bodea. In his opinion, this type of crisis could last around five years, with a peak in 2021-2022.
Corneliu Bodea entered entrepreneurship in 1992, together with his brother. “The company was designed by my brother to bring new technologies in the idea of modernizing the Romanian industry,” says Corneliu Bodea. The two initially thought that the Romanian industry in the early 1990s needed modernization. It’s just that that economy was going to deteriorate quickly. So the Bodea brothers’ debut in business was not an extraordinary one. In order to be active, Corneliu Bodea turned to the most profitable side of the economy since the early 1990s: trade.
“I brought Kaiser beer. The importer was in Oradea and we were the distributor in Bucharest “, says Bodea. He was taught work before 1990. As he did not enter college at first, he was sent to work by his father in the late 1980s. He worked as a lathe operator and says that this experience caught him very well because he learned to do everything. Then he managed to enter Construction, but never worked in the industry.
The beer business didn’t last long, even if it was profitable. Together with his brother, he decided to reorient himself towards the industry. In 1995, they started to deal with automation in the energy area. They remained in this field and focused on the maintenance of power transformers, each year then adding a new activity.
In 2000, Adrian Bodea, a physicist by profession, developed a patent for vacuuming liquid steel. “We tested it at the Special Steel Plant in Târgoviște and we started to make offers abroad”, says Corneliu Bodea.
A year later, the company already had contracts abroad for the metallurgy part. It is now present on four continents with this activity, in Asia, Africa, Europe, as well as in the United States. Moreover, in 2010, Adrem bought a Swiss company specializing in metallurgical engineering, in a transaction then estimated at about two million euros. In 2013, Corneliu Bodea invested in a biomass cogeneration plant in Suceava, a business of which he owns 49%, being associated with an Austrian company. “It was a very big investment, of 96 million euros”, details Corneliu Bodea.
Adrem engineers’ solutions are also used in the gas area. Corneliu Bodea says that the entire Transgaz automation system is made by his engineers based on software solutions from Germany.
However, one of its largest projects in this area is the BRUA gas pipeline (Bulgaria-Romania-Hungary-Austria). “Basically, the automation of the operation of this installation is done by us”, adds Bodea. He signed the contract with BRUA in 2018, and in this project, which has a deadline of the end of this year, he is part of an association in which there are several companies.
Currently, he is also active in educational projects. This year, he was co-opted in the Entrepreneurship project of the Romanian Business Leaders organization as a mentor of some young businessmen who enroll in this program. However, due to the health crisis, the project was left on hold.
At the same time, he is an associate professor at a section of the Academy of Economic Studies in Bucharest (ASE), at a master’s degree in energy systems management. “This year, it was more difficult to work. It’s one thing to meet with students, it’s another to stay on online platforms “, Bodea adds.
In terms of business, it will continue to be more cautious for the coming period, focusing, as he said, on cost efficiency, so that the company’s profitability does not suffer due to the high problems of the pandemic.
Read the article in Romanian on www.newmoney.ro