From initial investments worth 200,000 euros, Rematholding group, which specialises in the collection, processing and sale of scrap iron, has derived in excess of 100m euros turnover in its first three years of business.
The group was founded 4 years ago by Mihai Sofian, the current general manager of Rematholding, and Oliver Scholz, an official from the powerful German-based scrap iron trading group Scholz, reads Business Construct monthly magazine, which will be published on September 27, together with ZF.
Rematholding last year derived around 70m euros in turnover and forecasts around 85m euros for this year, after the turnover reached 57m euros seven months into the year.
Sofian, who got his degree in non-ferrous metals from the Faculty of Metallurgy in 1979, explains how he set up a business worth above 100m euros on a market that lacks visibility, but exceeds one billion euros and where major players prefer to keep a low profile. "I started with trading, buying and selling sold scrap iron. I had to buy a 11,500 square metre plot of land for 310,000 euros in Berceni, to be able to get a licence to operate on the scrap iron market and, so as not to waste time, I acquired Remat Vrancea, a loss-making firm for 275,000 euros," he explains.
As acquisitions were the most important aspect of the business, the first investments were made in the development of metal storage space, the rental of a car fleet and the acquisition of scrap iron. After it accumulated a satisfactory level of stock, Rematholding embarked on an aggressive acquisition campaign and bought Remat Vrancea, Remat Bucuresti Sud for 5.3m euros and finally Remat Dambovita for 447.000 euros.
Rematholding's strategy was quite simple - to develop its own market for acquisitions to begin with, and then develop a market to sell to.
Around 87% of the scrap iron collected by Rematholding is delivered to the domestic market, whilst the remaining 13% is sold to foreign markets such as Germany, Italy and Hong Kong.
Starting next year, Sofian believes the situation will change. "(...) We will have to import ...because the Romanian metallurgic industry is in full swing, with the need for raw material expected to increase," he adds.
To sustain growth, Rematholding has already started investments worth around 8.2m euros in Chitila, in a new scrap iron storage and processing space.
The company purchased the land (approximately 5.5 hectares) for 2.25m euros, with the Chitila warehouse to also benefit from its own railway.
Scholz holds an equal stake in Rematinvest group, which was also set up in 2003 and closed last year with turnover in excess of 50m euros.
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