Mehmet Gulgez, country manager with Tekzen Romania, the latest DIY chain to enter the Romanian market, states that the Turkish network intends to approach the domestic market with an aggressive pricing strategy, which will be sustained by direct imports from the plants the Tekfen group owns in Turkey.
"By the end of the year, we'll have three stores opened on the Romanian market. We are in talks to rent a plot of land with a building on it in the central area of Bucharest for another opening," states Mehmet Gulgez.
The first network store in Romania is scheduled to open in July, and will be located in Brasov, at the entrance to the highway currently under construction. The Turkish firm is also targeting other Romanian cities for future development including Iasi, Craiova, Oradea and Arad. According to the company's strategy, by the end of next year Tekzen will have invested 150m euros on the domestic market, and expects to be operating a total of 14 stores.
The first opening, which entails an investment of 10m euros, will be self-funded, whereas, as the network expands, Tekzen will turn to UniCredit for loans. The stores will have a sales area of around 5,000 square metres; with 1,500 of the 40,000 items displayed, per store, being imports from the company's plants in Turkey.
"This way, we can set prices 20-30% lower than the current level of the market," states Gulgez. The Turks are relying on home-design products and also on imported products from Germany and Turkey.
The Tekzen outlet network, which overall includes 18 DIY stores on the Turkish market and witnessed sales of 250-300m euros in 2006, is part of the Tekfen group, along with the third largest constructions company in Turkey specialising in civil engineering. The group also has other operations on the domestic market, such as participation to the construction of the Brasov-Bors highway, and plans to develop some residential projects in Romania in the future.
In parallel with its entrance onto the Romanian market, Tekzen also plans to add another 3 outlets to its Turkish network by the end of the year.
Mehmet Gulgez, a Turk who came to live in Romania about seven years ago, is responsible for persuading Tekzen shareholders to invest in the development of a Romanian network.
"I strongly believe in the potential of the Romanian market. The first time I proposed that Tekzen enter onto Romanian market was 4 years ago, but the shareholders refused. Meanwhile, the management at Tekzen changed, and the expansion strategy along with it. Had they accepted my proposal, we'd have been opening stores in many of the locations Carrefour has, in the meantime, taken," Gulgez added.
Gulgez estimates sales worth 12-13m euros, per outlet, in the first year. "After we have finished expanding our Romania network, Tekzen intends to enter onto the markets of the Czech Republic and Hungary. On the Romanian market, we could also open smaller store formats specialising in home-design, after we have covered the major cities in Romania".
Mehmet Gulgez
Owns the Ultra Invest company of Brasov responsible for the distribution of approximately 250 Nestl? hot drinks machines in Transylvania
For 3 years he held managerial positions in the G'Market Turkish operator of supermarket networks, before setting up his own business
After coming to live in Romania some 7 years ago, Mehmet Gulgez convinced the shareholders at Tekzen to invest in the development of a network on the Romanian market
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