German billionaire Hans Peter Stihl, owner of Stihl producer of power tools, with annual turnover worth above 2bn euros, visits Romania every two years and says the evolution of the domestic business has gone beyond his initial estimates because "Romanians have chosen to develop in the right direction".
Stihl group has succeeded in staying a family business since 1926 despite the countless takeover bids received from investment funds and companies operating on the same market because it has not resorted to banking loans and developed a network of dealers as close to customers as possible.
"Three or four years ago, we used to be quite often contacted by companies interested in becoming shareholders of the company, but we declined their offers because Stihl has been and will be a family business. Since then, they've given up and we haven't been contacted any more," states H. P. Stihl, the son of Andreas Stihl, the founder of Stihl group, in an interview with ZF.
The group's Romanian subsidiary, Andreas Stihl Motounelte, last year saw turnover go up by 20%, to 28m euros, but for this year Stihl expects similar revenues as one cannot speak of growth amid the current crisis.
The German group entered the Romanian market in 1997 by opening a subsidiary in a rented space, and subsequently invested 3m euros to build its own logistics and sales centre in Otopeni, which has a 3,000-sqm area and is set to be expanded.
How has it succeeded in remaining a family group?
"Now, the reasons may seem simple: because we haven't resorted to loans and we've grown organically. The main idea has been for us to focus on quality products we should sell only through dealers, and not through distribution chains. We started developing this business philosophy shortly after WWII and we've kept this strategy so far," explains Stihl, 77. He says the group has enough cash flow to survive even in case the company's sales should fall.
Moreover, Stihl produces most parts in house and very rarely resorts to production outsourcing.
As its products are mainly used in rural areas, the company's strategy was to set up a distribution network as close to potential customers as possible and not resort to sales through DIY stores.
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