Back in 1997, Vasile Babau and two friends decided to go into business. They worked together, for low wages, in a factory in Beius, and had accumulated many years of experience making furniture. They agreed to a partnership with a Hungarian company several kilometers away, which provided the “necessary infrastructure,” to begin production of double-glazed doors and windows. Twelve years later, Cedru Prod SRL is looking around on foreign markets and is considering applying for European funding to modernize its production unit.
“While visiting a furniture fair, where the usual furniture was being shown, I saw stratified wood windows and doors, which I felt would be become a successful trend in future, so we decided to develop our own factory,” explained Babau. While the Hungarians provided the space, the assets, and the funding for the initial investment, the three future partners contributed the work force. “We worked night and day with four employees, and everything was made by hand,” said Babau. Although turnover in the first year was low, they did not allow this to discourage them, and the money eventually came with the clients, recalls Babau. Word of mouth worked better than any marketing strategy, and the three partners were able to buy space in Beius in 2000 to expand the business. They ended their partnership with the Hungarians in 2004, and established Cedru Prod SRL, with products destined for medium and high-income clients.
The Beius investment amounted to some €5 million, of which half came from bank loans. The company took advantage of the real estate boom on the domestic market before the global financial crisis. “We delivered our products for two 18th century castles in France that were being restored. We prepared all the woodwork for the doors and windows,” explained Babau. He added that the company invests €6,000-8000 on a regular basis to updating its technology. Cedru Prod is now negotiating with a Belgian company which restores buildings, and hopes for monthly orders worth €120,000. After 10 years of activity, turnover is now at some €4 million, and Babau is estimating this year’s net sales to be a little over turnover posted in 2008, with a slightly smaller profit. “We reduced our profit margin as the main strategy to survive in 2009. Until now, our margin was 5-10 percent. Now it is lower,” added Babau.
Modernization is the catchword for all three Cedru Prod partners, and they are now considering accessing European funding, fully aware of the long process for this to be approved. They had considered applying for such funding earlier, in the amount of €400,000, for an environmental project in the form of a steam power station using wood waste, but did not have the leisure to wait for this.
