Construction materials distributor Dedeman, controlled by businessmen Adrian and Dragos Paval, will expand the company's current network by around 3-4 stores each year and plans to reach 30 stores in the long run, from 11 at present.
Considering an average investment of 10 million euros per store, the total amount allocated for expansion could amount to around 190 million euros over the next few years.
According to the Bacau-based company's estimates, the DIY market will continue to grow until 2015, when saturation will be reached in terms of geographical coverage, but competition will increase in terms of improved concepts and offers.
"The company's investment plan entails expanding the current network by 3-4 stores a year, with the aim in the medium term to cover the Southern part of Romania, and in the long run to have 30 stores," said company officials. Dedeman opened a 9,700 square-metre store in Agigea, Constanta county last month following an around 10 million-euro investment.
The store is the first to open out of a series of four units planned for this year, with the next three openings to be made in Botosani, Bucharest and Buzau. Currently, the sales area of the 11 Dedeman stores amounts to 100,000 square metres.
"The next Dedeman store will be opened on August 14th in Botosani and will cover 7,800 square metres with 145 employees.
"In the meantime, works have also started on the Bucharest and Buzau stores," stated Dedeman representatives.
The overall amount allocated for investments this year stands at 47 million euros, 12 million more than the budget announced at the beginning of 2008. "20 million euros of the sum have already been invested in land, and 15 million euros in the construction of stores," explained company officials.
The funds for the investments come from a 45 million-euro credit secured from ABN Amro and UniCredit Bank, which is also meant to cover the construction of new headquarters in Bacau.
Dedeman sales increased by around 25% in the first half of the year, above the 15% start-of-the-year estimates, a rate that will be preserved until the end of the year.
"The main factors behind the sales rise are the expansion of the store network and the increase in the price of construction materials, which, in turn, is influenced by the dynamics of constructions and real estate investments," say Dedeman representatives.
According to Dedeman data, above-average price increases were recorded for basic construction materials (cement, masonry materials etc), as well as for thermal-insulating materials (adhesives, mortars, plasterboard etc).
Under the circumstances, the company's turnover will reach 230 million euros this year, up 25% against the 184 million posted in 2007. The company recorded a net profit worth 19.7 million euros last year, up 25% on 2006, due to three new stores opening in 2007, in Piatra-Neamt, Targoviste and Roman. The Dedeman group, set up in 1992, also includes Dedeman Automobile - a Dacia, Renault and Nissan dealer, with turnover worth 9 million euros, and Dedeman Trucks, a dealer of Renault Trucks, with turnover worth 4 million euros.
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