Macromex owner: I learnt from mistakes that business diversification is not good

After 17 years in which he gave up two businesses, sealed two deals and developed Macromex to turnover worth 120m euros, Dan Minulescu says he will bet everything on a single card in the following years: frozen products distribution.
Minulescu, 42, developed from scratch the biggest distributor of frozen products, which last year reached 120m-euro turnover with 500 employees in Romania and another 30 in the Czech Republic.
In the first two years, Macromex's business was very simple, like most businesses in the early '90s. Initial investments stood at only 2,000 dollars, borrowed from friends as freight transport vehicles were rented.
In 2005, Macromex opened the first sales points in the country and then further developed counting on the same segment, which can still be considered a market niche: distribution at refrigerated goods. Minulescu says his best years as an entrepreneur were due to Romania's EU integration.
After 2007, the company followed two directions to develop its operations beyond Romanian borders: it started deliveries to clients on other markets and set up the first foreign subsidiary, in the Czech Republic. "2007 was our best year, in terms of profitability. The performance we reached then is still helping us now, when the market looks bad," Minulescu adds.
Instead, the toughest period for him was 1999, when the company was seriously hurt by RON decline and rising borrowing costs. Problems prompted Minulescu to start discussions, for the first time, with an investor interested in taking over Macromex. He says he does not regret not having attracted a financial investor in the company because under the control of a financial investor the company's flexibility would have been hurt. "(...) We're a sound company and we can raise more resources from banks than we need," Minulescu states.
Instead, he sealed two deals with two large companies, with international operations.
Minulescu says he does not plan to invest in production again and admits he made a mistake when he decided to enter the charcuterie market with Cominca company. "In our case, business diversification was not a good strategy".
He reckons 2009 is year when cost control is more important than ever. Dan Minulescu speaks about the development of new businesses, too. For Macromex, new businesses mean the development of the distributed product portfolio by entering new categories. Minulescu says he will support the development of these businesses by investments in a distribution centre in Transylvania, to be opened in 2011.