Horațiu Țepeș: “There are groups that have reached a turnover of 6–7 billion euros with 50–60 factories. Why couldn’t we do the same?”

File 23 for 2023. What’s Next for Business and Society in Romania?

“In five years, we plan to have, at least in its early stages, a factory abroad, most likely in Slovakia, and probably a small site in Hungary. Last year, we exported goods worth around 30 million euros. It may sound like a lot, but compared to our overall turnover, it is not that significant,” says Horațiu Țepeș from his office in Brașov.

His vision of building factories through greenfield investments in foreign markets is shaped by how the construction materials market works within the European Union, where business logic pushes you to produce as close as possible to your end markets in order to be more efficient and profitable.

“We became market leader in Romania in 2012, just five years after starting out. Back then, the competition was weak, and I could even say complacent, and the challenge for us was to consolidate our position. There are groups that have reached a turnover of 6–7 billion euros with 50–60 factories. Why couldn’t we do the same? What motivates me even more is the fact that Romanians still haven’t done this (expansion abroad, editor’s note). We have some very good, healthy Romanian companies, but they have not taken that step”.

Horațiu Țepeș expects the first foreign factory to be the hardest to set up, but believes that afterwards it will be much easier to access other EU markets. He also knows the European market cannot be approached with a one-size-fits-all product range, as needs differ from country to country.

“Our aim is to meet domestic demand, invest in complementary products, and then replicate abroad what we have built here. Obviously, in markets where producing metal roof tiles is not feasible, we will focus on insulated panels. In Northern Europe, for example, we would go with metal roof tiles, as ceramic or concrete tiles would not work there. We know exactly what we have to do!”

Part of BILKA’s strategic growth and product diversification is the new insulated panel factory the company has been building for several years, whose commissioning has already been delayed. The factory should reach normal production capacity next year and will be a mature investment within three years.

“The original plan for the new factory was a 20 million euro investment, but in the end we will reach 35 million euros. Equipment, construction materials, and labour have all become more expensive, and we have renegotiated contracts and accepted new terms countless times. We obtained separate building permits for different sections of the factory to avoid bottlenecks, and there were many critical points along the way”.

Bilka’s complete development vision for the domestic market covers four product segments, ranging from the residential sector to the industrial segment with turnkey halls, as well as a drywall profiles division and a garage door division. So far, the company’s investments total 70 million euros, and in the coming years that figure could rise sharply.

“At today’s values, we will probably reach around 170-200 million euros in investments by then, but the size of the market will also play a role. At the moment, we see enough potential to dedicate 6.5 hectares of production halls exclusively to insulated panels on a 12-hectare site. If the market grows significantly, there will be major opportunities both to the north and to the south, and we will certainly have to relocate and adapt to the times. So, our plans for Romania over the next 10 years remain firmly focused on investment”.

The Next 30 Years

“Nothing happened by chance. It may seem that way, but it absolutely was not. Investments have always been part of our plan, and we already know what we will do over the next 30 years. It is true that the time frame for investments can have a margin of +/- 3 years, as was the case with the new factory. We could not have known that environmental requirements, bureaucracy, or equipment deliveries would delay us. But we knew 10 years ago what we were going to do, and we still know what we will do in the next 30 years”.

Looking back at what he might have done differently over the past decade, Horațiu Țepeș says he would have implemented some of his current development plans earlier, such as the insulated panel factory or international production. However, the strategy and direction remain the same, aligned with the strategic development plan.

At the moment, he has no plans to move the company headquarters from Brașov to Bucharest, as he does not see enough advantages in such a move. He does not rule out, however, the possibility of part of the company’s management being based in Western Europe. “In the next 15 years, it is possible that a significant part of our management team will be based somewhere in central Europe. It will depend on what we do in Germany and on how things stand at that time. We would definitely not move to Warsaw, but when the time is right, we would not rule out Germany. Our challenge is to be in the top three, if not the market leader, in the European Union.

One of the initiatives that helped turn BILKA into a market leader came from the area of brand awareness, where the company has invested heavily over the past decade to achieve real results. “We started making substantial brand investments seven or eight years ago, yet the statistics have shown us as the number one roofing brand for only the last two or three years. These things take time. Sales and turnover can grow quickly in the right circumstances, but brand strength and awareness take longer to build. Our focus was to make BILKA the first choice in people’s minds when they think of a roof, but that position was earned over many years through a long-term strategy”.

But beyond the immediate economic context, the entrepreneur looks at the business, the economy, and the country with a long-term perspective. At heart, he says he has no intention of ever leaving the business and still sees himself coming to the office even at the age of 80. The company can function without him, but Horațiu Țepeș considers himself one of the driving forces behind BILKA’s expansion. “I will certainly never step away from operations, and I have no plans to take a break or retire in any way, even when I reach that age. I can see myself still coming to the office at 80, and I cannot imagine a life without work”.

One of the long-term challenges he foresees comes from the available workforce in relation to the size of the population, and the effects of the demographic problem on the labor market could be partially eased by bringing in more workers from outside the EU.

“In my view, the solution lies first in encouraging higher birth rates, but also in bringing in labor from abroad. There is also a need for unskilled workers, and the legislation in this area should be eased, with incentives introduced. In our company, we have 100 Asian employees. We brought in this additional workforce for production, and they are good people. (…) It is an entirely positive thing, and I believe we should set aside issues of race, ethnicity, or any other such matters and focus on bringing in labor from abroad”.

Însă dincolo de contextul economic imediat, antreprenorul se uită la business, la economie și la țară pe termen lung. În fond, afirmă că nu vrea să se retragă niciodată din business și se vede venind la birou chiar și la 80 de ani. Compania poate funcționa și fără el, însă Horațiu Țepeș se consideră unul dintre motoarele principale ale expansiunii Bilka. „Cu siguranță nu mă voi retrage niciodată din operațional și nu am de gând să intru în vreo vacanță sau să mă pensionez în vreun fel, nici la vârsta la care va fi cazul. Mă văd și la 80 de ani venind la birou, nu am vreun gând că pot trăi fără muncă.”

Una dintre problemele pe care le vede pe termen lung vine dinspre forța de muncă disponibilă, raportată la dimensiunea populației, iar efectele problemei demografice în piața muncii ar putea fi atenuată parțial printr-un import mai hotărât de muncitori din zone non-UE.

„Eu rezolvarea o văd în primul rând în încurajarea natalității, dar și importul de forță de muncă din afară. Este nevoie și de muncitori necalificați și ar trebui aici înlesnită legislația, ar trebui venit cu facilități. Noi, în companie, avem 100 de asiatici, am venit cu această forță complementară pentru producție și sunt oameni buni. (…) E un lucru absolut benefic și cred că trebuie să lăsăm deoparte problemele de rasă, de etnie, sau mai știu eu ce alte teme și să importăm forță de muncă din afară”.

Article published on forbes.ro, 27 February 2023, by Ionuț Bonoiu