Interview given by Corneliu Bodea, CEO of Adrem for economica.net
Adrem is today one of the largest Romanian entrepreneurial businesses in the field of energy services, with 1,200 employees and annual business of 45 million euros, involved in some of the major energy infrastructure projects carried out in Romania over the past few years. How did it all start, 30 years ago, how hard was it, where did it end up and to whom is this journey due and where will it go from now on?
How was the first day of entrepreneurship? Can you tell us how it all started?
Without pretending to clearly remember the first day of entrepreneurship, I’m sure it was one of those days when the 23-year-old, who had already worked as a turner, technician and finished college, woke up with a zest for life and of activity, with the confidence and optimism that only age, needs and ambition can feed to such an extent. I’m sure it was a day that started early and ended late as well as the next… about 6000 days that followed…
That’s how it started, with such a day! My brother had a dream of modernizing the industry left behind, widowed for too many years of investment and conquered “revolutionary and patriotic” by too many “inventions”. I wanted to get out of my shortcomings and offer myself a future. He is a researcher at the Institute of Atomic Physics, a student who matured somewhat earlier, already burdened with responsibility. While he repaired electron microscopes after the program, in the evening, at hospitals and other institutions, I bought various from the wholesale store of a colleague’s father and sold them from restaurant to restaurant in Bucharest or Prahova Valley. We earned money to support our families, we laughed, we worked, we dreamed and we supported each other.
What was the biggest challenge then, in the beginning, and what is it now?
The biggest challenge then was to ensure our stability and day-to-day income, today it is the same, only it refers to the income and stability of 1,500 families from year to year. That’s how it is in life, you solve one problem to make room for another. What matters is involvement, responsibility, respect. I have always loved what we do and I don’t think there would have been another way for both me and my brother. The challenges are in such a context what builds strong characters, experience and resilience.
Have you ever considered giving up and maybe selling? What made you move on?
I have often thought of giving up, selling, or simply leaving. Disappointment, lack of perspective, despair often surrounded me and I felt chased and disrespected. The almost continuous frustration torments you here, when you try to build a business “like outside” and you are surrounded by cunning, imposture and hypocrisy. But I am so attached to these places, to people, I owe so much to them, that I have so far found the strength to continue, to overcome fleeting feelings and to contribute as much as I know and can. Then I feel responsible for the many wonderful people who have believed in me, the employees, the customers, or the friends, and for them and my ideals, it is worth making even greater sacrifices.
What was Adrem’s most complex contract? But the one who gave you the biggest headaches?
The last one is always the most complex and this is because a feature of our activity is to dare more and more. If I had to choose the most complex contract from a technical point of view, this would be the first liquid steel degassing installation, at COS Târgoviște (which today almost no longer exists), exclusively worldwide based on a technology patented by my brother . Years of work and testing, dust and dirt, ambition and reality. In terms of financial complexity and value, the most complicated contract was the construction of the 30MW cogeneration plant in Suceava. The realization of the SCADA infrastructure at Electrica Transilvania Sud was the contract with the greatest impact in terms of volume, importance in customer processes and volume of data. Then the same SCADA system installed at the national gas carrier, Transgaz, for all transport infrastructure, taking over through an outsourcing contract the reading activities and then measurement and maintenance from CEZ Romania had the biggest impact on our organization and so many other works, contracts. Recently, together with CIS Gaz, we completed the Romania-Moldova connection for natural gas, which will ensure more stability for our brothers.
I am glad to have had the chance to contribute to the development of Romania’s industrial and energy infrastructure in the almost 30 years of activity and for that I am grateful and satisfied.
Activate in a complicated field, where, in order to resist, you need both capital and know-how. How did you manage to attract them?
In our field, we really need know-how first and foremost. My brother accumulated it from his time as a researcher and then he had the chance to do his job and apply what he learned in industry. I had to learn. In 1996 I started the courses of a British university through the distance learning system and I obtained a certificate in management, then a diploma followed by an MBA. In parallel, I added to my basic technical education complex knowledge of the energy industry, spending over 20 years working, investing and contributing to the development of this industry. Even today I am a student at the University of Reading and I obtained a Post Graduate Certificate in Governance and Board Management and I am preparing to complete a diploma in the same discipline followed by a Master of Arts. I strongly believe that lifelong learning is the way to be connected to modern society with its sometimes absurd pace of development and change. I attracted a lot of Know-how from the company through the employed colleagues and I continuously exposed them to challenging projects that could develop both their skills and their know-how and attitude.
Capital has always been the main problem of our group and I think of the entire Romanian economy. The dependence on the bank loan and the lack of guarantees “pressed” the business and I think that what we see happening now on the stock exchange is a much better solution to support the economic environment. Of course, this required years of accumulation and only businesses that have managed to withstand periods of inflation, lack of capital, will be able to be the beneficiaries of what I believe is the true period of Romania’s economic growth.
What do you think is now the most important resource in your company?
People! I answer without hesitation, because the quality of human resources but also the number differentiate us from competitors. There were hard times when it was extremely difficult to manage such a large number of employees, but our strategy was to support and strengthen the team, to prioritize job stability. Today, when it is so difficult to find specialists, the only thing that is still missing are the big investments in the energy system… We are ready!
What changes or adaptations have you made to your business in recent years, including in the difficult context of the pandemic?
Of course, for a group of over 1,500 employees who work to a large extent in interacting with the energy consumer, it was difficult to manage the initial pandemic period. We reacted quickly and organized and well past 2020. Rather, the multitude of legislative changes in the field of labor legislation or industry-specific legislation and regulations have generated the need for adaptation and structural changes. In a way it is good that for such large organizations there are periodic changes to maintain the interest and concentration of management mainly.
We continue to care about protecting the health of colleagues and those we interact with in this pandemic and personal context. I am directly and sustainably involved in communicating with all team members.
How has the Adrem business evolved, in terms of figures, business, employees, profit and how do you see the evolution further in the coming years, especially in the context of the future needs of the energy system, and I am referring especially to digitalization and smart grids ?
I start with the plans: we have an ambitious goal in terms of reaching a turnover of 100 million euros in 2025, today being about 45 million. If in 2007 we had about 50 employees and about 10 million euros in turnover, the period 2008-20012 brought a significant increase both in terms of the number of employees (about 200 in 2009, 600 in 2010 and over 800 thereafter) and of turnover (increases of about 30% each year up to 35-40 million euros), subsequently there was a lower growth rate, periods of profit fluctuation. In 2017, a steeper intervention was needed in the management and organizational structure. Without reducing the staff, efficiency measures were taken, which started to make their action felt starting with 2019.
Today our group registers an EBITDA of approximately 7-8% of turnover, and the target is 10% for the period 2022-2025. The main supporting factor of our activity was represented by the activities provided to the distribution operators, critical activities such as maintenance and interventions in case of breakdowns, or activities related to the installation, verification and reading of meters. The main risk was the large fluctuations in the investment plans of the most important players in the energy industry, be they producers, carriers or distributors.
We are talking about an energy, a segment with a strong presence of foreign capital. Do you think that there is still room for Romanian companies and, especially, in what field?
If we talk about this sector, I think that a separation should be made between private and Romanian state capital rather than between foreign and Romanian. I say this because, with small exceptions, we notice a slowness in the realization of the investment plans of the companies dominated by the Romanian state and rather a compliance with the regulations or the proposed targets of the private ones with foreign capital.
I think there is room for companies with Romanian capital and because, paraphrasing a classic, a period of great investments in the energy sector is coming, or we will not have energy at all. Who else but the Romanian companies and the local labor force can practically implement and execute these projects? Until other developments in technology, the pillars are installed by people, the concrete also poured by them, the electrical panels as well. Romania needs about 6,000-7,000 MW installed in renewable projects only to comply with the assumed targets, we urgently need the modernization and / or development of stable generation projects of about 2,000-3,000 MW installed only to replace the capacities coming out of production in the next period. These are facts! Unfortunately, we are late and we will do things without a well-thought-out and hasty strategy, but they will be done with the contribution of private companies, especially those with remaining capital.
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30 years of capitalism. "It's frustrating when you're trying to build a business 'like outside' and you're surrounded by cunning, imposture and hypocrisy." How hard was the road to success
Interview given by Corneliu Bodea, CEO of Adrem for economica.net