The French engineering group Alstom, a provider of design and maintenance services for products and systems used in power and transportation infrastructure on the Romanian market, has announced its expected turnover for 2005 at between 60 and 70 million euros.
The group is forecasting a 12-25% drop in turnover for 2005, from the 80m euros seen in 2004.
"We are expecting turnover to fall because the Romanian power market is shrinking, in large part due to the restructuring processes in this sector," explained Jacques Chevrier, Alstom country president for Romania, Bulgaria, Macedonia and the Republic of Moldova.
Chevrier said the French group would invest between 5 and 10 million euros in equipment, research and employee training this year.
The Romanian market for power equipment and services is put at a yearly 500-550 million euros. The market includes powerful international groups, such as Siemens, ABB, General Electric, Alstom, Schneider Electric and Moeller Electric, as well as domestic players.
While referring to the domestic market and to Romanian consumer behaviour Chevrier said: "Romanians prefer to resort to foreign companies for things that can also be manufactured in Romania. The domestic market is not taken into consideration and, as a direct result, no jobs are created."
The French group has been in Romania since 1994, through its companies Alstom Transport and Alstom Power.
Alstom has over 75,000 employees in 70 countries, of which over 2,000 are in Romania.
According to research carried out in 2004 by Frost&Sullivan, a US consultancy firm, the Alstom group is one of the main players on the market offering services to power stations in Central and Eastern Europe, including Romania.
Alstom operates in Romania through a number of companies, the most important of which being Alstom Power Romania.
In recent years, Alstom Power Romania has become one of the largest business partners of the former state-owned giant power company Termoelectrica SA. Termoelectrica had dominated the domestic power market for years before being heavily restructured in 2002 when several power stations were spun off to local authorities.
Another company owned by Alstom in Romania is Alstom Transport Romania.
At the end of 2003, Alstom Transport Romania signed a contract worth 240 million euros with Metrorex, in Paris, which saw Alstom take over metro train maintenance services along with 1,248 employees. As part of this contract the French firm pledged to provide maintenance for the entire fleet over a 15-year period.
The agreement signed with Alstom entails maintenance services for 251 metro train cars made by Astra Arad and 18 new trains made by Canada-based Bombardier.
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