Bucking the trend

Chris Fitzsimmons talks to Adrian Ionescu managing director of Romanian installation and rental specialists the Paradigma Group, and started by asking the sadly obvious question – how is the group faring in the current economic climate.

For the last 5 years, Romania has been somewhat of a poster child for economic reform and growth outside the Euro-zone. According to Eurostat, it has maintained GDP growth over 4% for almost the whole of that time, and by Q4 in 2008 it was cruising around the 9% level.

However things can change very fast in economics, and by the end of June this year they had. The country slipped into recession, with a contraction of almost 10%.

In this climate doing business is tough, but with the right approach will still get you through. The man at the Paradigma Group, with responsibility for finding that approach is managing director Adrian Ionescu.

He bemoans the lack of fiscal action of his government: “They [the government] have showed so far little interest in implementing structural reforms and adjusting its lax fiscal policy. Recently, they finally started cutting public sector pay levels, but unemployment at the moment is at its highest level for many years.

“The economic downturn is affecting our business like any other, but our industry is far from being among the most damaged. Rather, I would say that it was in a privileged position compared to other sectors.

“Due to that fact that we supply technical support services in both our sales and rental activities, our staff has a leading importance. I would therefore say that we have even had to slightly enlarge our technical team in the past few months.

“Equally, time of economic downturn can be the best opportunity to find quality professionals at the best price on the market, therefore if you need them and can afford them, this is the time to go head hunting.”

Paradigma itself is one of the leading rental and sales suppliers of AV equipment in Romania, forming part of the pan-European Ampco Flashlight group. It operates over a broad range of sectors, and I was also curious to know which ones were standing up best.

“The concerts, big scale events and music festivals seems to be less affected by economic restrains. All the major festivals we were involved with this year went ahead with record crowds.

“On the other hand I think the corporate events downscaled, both in terms of numbers and budget. We did not see the number of large and expensive corporate events we have been accustomed to for the last few years in Romania. Whilst I don’t have an official figure, my estimate is that the corporate events market decreased by around 30%.

“Our sales activity was mainly threatened by the economic instability, which opens up the possibility of losing current customers (both retailers and dealers). This down-turn is accentuating the issues that always plague the sales side of the business. Grey imports enable our competitors to offer lower prices, therefore pricing pressures and intense competition, negative publicity and poor impressions about counterfeited products all become larger problems.”

However Ionescu remains relatively upbeat on the prospects for the medium term. “There are signs that the economies of most important western states are improving, so whilst Romanian analysts estimate that the final quarter of this year will be the first, once that is over we should be in a better position.

“Our organisation responds to the standards and trends of the industry, therefore we are proud of the fact we have been able to help dramatically reduce our customer’s budgets whilst still being able to supply high standards of service.

“We are also committed to always updating our inventory, so our clients can be assured they are dealing with the latest models on the market. Continued hard work gives us the confidence that we will keep strong relationships with our customers and establish new ones.”

I’m no expert, but that sounds to me like a way to get through the toughest of economic conditions.

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