Increasingly more international companies are relocating their production activities to Romania, lured by the cheap workforce, then close down their Western plants. This is not a new trend. However, Italian group Magnetto Wheels, Europe's largest wheel producer, has chosen a different variant for its plant in Dragasani.
"In those countries where high costs are associated with the workforce, such as France, Italy or Great Britain, Magneto Wheels makes large series of products, which call for a high automation degree and fewer people. The rather small series are transferred to Romania, but certain production lines have also been transferred to be able to manufacture these products," Gabriel Stanciu, general manager of Magnetto Wheels Romania (the former Auto Wheels Dragasani), told Ziarul Financiar.
A production line transferred from Italy is now being installed in Dragasani. "The group is reorganising in Italy, with some of the customers being assigned to the plant in Romania. For instance, the Fiat factory from Poland is one of these clients. Suzuki's plant in Hungary could be next," said Danut Iordache, human resources director of the company and a member of the Board.
The former Auto Wheels could also profit from the launch of the X90 model (or the 5,000-euro Dacia), scheduled for the end of next year. "The group has designed the wheel for the new Dacia and we hope to be accepted as producers for the Pitesti carmaker," Stanciu stated. In fact, Magnetto Wheels is, according to Stanciu, the main wheel supplier worldwide for the Renault group, owner of Dacia. At the same time, Dacia is one of the main customers of the Dragasani factory, together with the other Romanian carmakers - Daewoo and Aro, but half of the Magnetto Wheels Romania output is exported.
According to the general manager, the company has benefited from investments worth 15-20 million euros in the past three years, to update installations and expand the production capacity. When the plant was privatised, back in 2000, the Italian company pledged investments worth more than 4 million euros, which have already been made. "Investments will continue. We shall contract a 7.5 million-euro credit, for modernisation works," Stanciu said.
The company aims to make 1.2-1.5 million wheels this year, almost double last year's level. "Last year's average output was 60,000 wheels monthly (720,000 annually), but we managed to make 170,000 wheels last month, for instance, and, after we complete the investments, the plant's production capacity will exceed 200,000 units monthly," Iordache stated.
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