Cooper Cameron, one of the world's top producers of oil equipment and gas pressure control equipment, is planning to transfer part of its production facilities from Western Europe to Romania, sources close to the US company told Ziarul Financiar. The reasons behind this decision are the lower labour costs and a strengthening presence in the East European region.
Cooper Cameron took over oil equipment producer Sterom Campina last year from another US group, Precision Castparts Corp. (PCC).
The new owners of Sterom are planning investment in the plant of between 5 and 10 million dollars (3.8-7.7 million euros) for this year, mainly to raise production capacity and improve quality.
Raising Sterom's production capacity will in fact mean a transfer of production from other plants, mainly European plants, owned by the American company.
Beside the lower labour costs, the Americans will also benefit from the greater proximity to the Russian market.
Before the Sterom takeover, Cooper Cameron had no Romanian customers, and its presence on the Russian market, one of the world's largest, was extremely low.
Cooper Cameron owns production facilities in the United States, Canada, France, Great Britain, Germany and Singapore. In 2003 they generated total revenues of 1.4 billion euros amid net income of 60 million euros. The company has assets worth a total of 1.8 billion euros and is listed on the New York Stock Exchange, where it has a capitalisation of 2.3 billion euros.
Turning Sterom into a regional production centre was also the intention of its former owners several years before, though in the end the plan was not carried through.
In 2001, PCC drew up plans to raise Sterom's turnover from 20 to 150 million dollars by 2003, and to transfer no fewer than 15 production lines from other European plants to the Campina location.
Sterom was taken over by Cooper Cameron last November in a deal worth 80 million dollars (61.5 million euros).
The deal included other production facilities belonging to PCC: the American companies General Valve, TVB and AOP Industries, as well as the Italian company PCC Ball Valves. During the last fiscal year, these companies turned over a total of 122 million dollars.
PCC bought Sterom from the state in February 1999, and pledged to invest 20 million dollars over five years.
The latest financial data available shows that PCC Sterom made a turnover of 34.5 million euros in 2003 against losses of 7.6 million euros.
The new managers of Sterom were unwilling to give details of the company's results for last year or forecasts for the following years.
vlad.nicolaescu@zf.ro
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