"Plasmaserv want to double our market share by the end of next year"

Recorded by George Marinescu
English Section / 3 noiembrie 2023

"Plasmaserv want to double our market share by the end of next year"

Versiunea în limba română

(Interview with Tiberiu Vărzar, Plasmaserv CEO)

The polycrisis of the past three years has left its mark on companies in the heavy industry and the machine building industry, which have had to find solutions to overcome problems caused by disruptions or distortions in supply chains, as well as those caused by by the increase in energy prices, an increase that impacted the purchase prices of the necessary equipment and production costs.

The suppliers of the respective companies had to reposition themselves during this period and in turn look for solutions for conducting business as usual, especially since the polycrisis continues if we take into account the recent conflict in Israel.

In order to learn more about the way in which the suppliers of companies in the heavy industry and the machine building industry manage to respond to the current challenges, we conducted the following interview with Mr. Tiberiu Vărzar, co-founder and CEO of Plasmaserv, a company that has been active for almost 20 years uninterrupted in the field of plasma cutting equipment.

Reporter: In two years you will mark 20 years since your company has been active in the market in our country. How is the balance of 20 years of activity presented?

Tiberiu Vărzar: The Plasmaserv story began in 2005, when I met Csongor Csegedi and we decided to put our skills together in a business as we wanted to exist in the market, in the field of plasma cutting equipment. Hence the name of the company, Plasmaserv which we created because we felt we were coming to cover a market need that would grow. Later, we added welding equipment to our portfolio. We believe that the balance sheet and image of success in the case of Plasmaserv has always been closely related to the goals and mission of the company that we have built organically, healthily. If we take into account key aspects of our performance evaluation, we can highlight the evolution of revenues and implicitly the profitability that has grown constantly in these years, thanks to our ability to adapt to the market, by attracting and developing new products and services, thus creating the favorable context for attracting more customers and their loyalty.

Reporter: What was the most difficult moment in your 20 years of activity?

Tiberiu Vărzar: We would describe the difficult moments rather as challenges that led us to grow, develop, innovate. Important moments are related to projects or new and important partners with whom we have signed contracts. Each new partnership helped us to strengthen our confidence that we are on the right track, to reconfirm our professionalism. In our field, it is very important to know how to convince large suppliers to deliver to Romania, but it is equally important to have the ability to bring added value, through the services provided afterwards to the buyer client. And this is achieved if you are a professional in the field and do your job not only with skill but also with passion and confidence that you are doing the right thing. The first challenge came right in 2006, when we became authorized partners of the famous company Hypertherm USA, the largest manufacturer of plasma cutting equipment in the world. The partnership put us in a position to manage a five-fold revenue growth in one year. A year later, we became partners of Eckert Polonia, manufacturer of CNC plasma cutting machines, a new technology at that time for the Romanian market. In 2012, we became Kemppi partners and in 2022, DNE Global partner, manufacturer of laser cutting machines. Each moment had a decisive contribution to the way we developed, to the future plans.

"The revitalization of the heavy-machines manufacturing industry requires an integrated approach"

Reporter: From your point of view, how is the heavy industry and the car manufacturing industry in our country? What should be done to revive these industries?

Tiberiu Vărzar: Heavy industry and the car manufacturing industry in Romania have gone through significant transformations in the last two decades, against the background of economic and political transformations, in particular, but also technological evolution. There have been periods of growth and periods of stagnation, but as with any industry, revival requires an integrated approach. It then requires an adaptation to global trends in technology and sustainability in order to be competitive in the international market.

In heavy industry, the decline in demand for steel and aluminum on the global market, which has added compounded by high energy costs and underdeveloped infrastructure, affected activity, some factories were closed, others reduced their activity to minimum capacity. That is why the revival of these industrial branches is closely related to the improvement of the transport infrastructure, but also to the reduction of electricity costs and the promotion of renewable energy sources.

For the heavy-machines manufacturing industry, Romania stood out in the automotive industry with Dacia Renault and Ford. But we also have to take into account industrial machinery, agricultural or construction equipment, which is why there are factors on which these industries depend, among which the development of innovative technologies and high-quality products is decisive, but dependent on a workforce qualified, coherent fiscal and administrative reform to reduce red tape and facilitate foreign and local investment. The automotive industry, manufacturers and components, is only one of the growth engines for the Romanian economy, but other sectors are equally important. The field of shipyards, one of our main strategic customers, is another field that has helped the Romanian economy in recent years.

Reporter: What are the solutions offered to customers by your company?

Tiberiu Vărzar: Plasmaserv is a company that currently sells equipment, installs it, trains operators, does maintenance, does service, so it offers its customers a complete package. It is important to know that we are not only sellers of equipment, but in the first phase we offer the consulting part, which in some cases may take longer than the signing of the contract, the delivery of the equipment and its installation. Among the company's clients are the shipyards Vard Tulcea and Brăila, Damen Galaţi and Mangalia, Severnav, Orşova Shipyard, but also contractors for specialized industries such as Tehnostrade-UMB, Raal, Irum, Astra Rail, Maschio Gaspardo, Chambon, Peikko and Butan Grup . The equipment sold by Plasmaserv is manufactured in Finland, Poland and the USA, as there are no manufacturers for such equipment in Romania.

"Political instability means trade restrictions"

Reporter: Did the polycrises of the last three years - the Covid 19 pandemic, the energy crisis and the war in Ukraine - have any negative effect on your company? Have you faced supply chain setbacks and if so, how did you manage to overcome them and deliver your company's products to customers on time? What is the relationship with the company's suppliers?

Tiberiu Vărzar: All of humanity had to manage, more or less, the difficult situations created by the Covid-19 pandemic, the energy crisis and the war in Ukraine. Let's not ignore the situation in Israel now. All this is reflected more or less, directly or indirectly, in any activity.

For Plasmaserv, the pandemic period meant the decisive moment for reinvention, in which we took into account the modeling of business development, using a strategy developed by external experts. However, the Covid-19 pandemic has had a significant impact on supply chains. Movement restrictions have disrupted transport and production and led to supply delays. The energy crisis - rising energy prices and supply uncertainty has impacted production costs. From here, the need to make energy consumption more efficient and the importance of identifying alternative sources has intensified. The war in Ukraine introduced geopolitical risks and uncertainties about exports and imports from that region into the equation. Now, adding to this stress is the conflict in Israel. Political instability means trade restrictions, so so many syncopes in the activity of companies. Even if there are no direct or immediate effects, we have always taken them into account and analyzed it to meet the limit situations. In addition, communication and close cooperation with suppliers and customers are crucial elements for risk management.

"We have a new identity: Plasmasev Metal Connection"

Reporter: What further differentiates your company's products from those of competitors in the market?

Tiberiu Vărzar: As we also define ourselves through the new Plasmasev Metal Connection identity, our company brings together people, metal and technology, with the support of values to which we remain faithful. We offer seriousness, professionalism and consistency - this is how we built the relationship with partners, customers and suppliers. We provide solutions to maximize opportunities, increase performance and add value to every company, every team and each of us. Plasmaserv Metal Connection provides solutions with high technology included to increase yields, to provide quality, comfort and safety, and the metal processing. Plasmaserv Metal Connection has become a company that reaffirms the complexity of its services and solutions through an extremely rich offer resulting from solid partnerships with prestigious, world-renowned brands. Through the accumulated expertise, the company adapts to the requirements received and integrates the most suitable technological solutions for welding and cutting, combining the research tradition of suppliers that allow access to the latest technologies, with the experience of specialists.

Reporter: What additional services do you offer to customers? Do you provide maintenance for those products?

Tiberiu Vărzar: As I stated above, Plasmaserv Metal Connection is a company that currently sells equipment, installs it, trains operators, does maintenance, does service, so it offers its customers a complete package.

Reporter: In the financing services, do you include the insurance of the respective products?

Tiberiu Vărzar: The products delivered through financing programs with our partners are insured by the partners who provide the financing. Our company, Plasmaserv, cannot provide insurance services for these products.

Reporter: What are your estimates for the end of this year? What is the turnover you hope to end 2023 with and what profit do you expect?

Tiberiu Vărzar: Plasmaserv went through a series of transformations four years ago, when the founders decided to turn to a consulting firm specialized in business remodeling, so that the company could move to the next level. Plasmaserv's turnover amounted to 5 million euros in 2022, and the target for 2023 was a 30% increase in business, up to 6.5 million euros, as a result of the rethinking of the business strategy and the increase in demand on the domestic market. The number of employees amounts to 30 people.

"Next year we want to strengthen the maintenance and service services for partners in the naval industry"

Reporter: What expectations and goals do you have for the year 2024 and for the next decade?

Tiberiu Vărzar: Our expectations and objectives are also related to the evolution of the economic environment in which we operate and the forecasts related to the evolution of the industry for the year 2024 and for the next decade. Current contexts, especially economic and political ones, can vary significantly by region and sector.

We proposed in the strategic plan to double our market share, to 10%, in the welding equipment sector, which we estimated at 100-115 million euros. In terms of business development, Plasmaserv also opened a work point in Tulcea this year to serve shipyard customers more closely, with a small stock of products and service activity. The company also has a warehouse of about 200 square meters at the company headquarters and a hall of about 800 square meters in a commune near Târgu Mureş. Next year we want to strengthen our activity in the Tulcea area, especially the maintenance and service part, because in the naval industry area we have a lot of welding equipment. We want to invest much more next year in the training of our colleagues, everything that means the training part, not only for the sales team, but also for the TESA staff.

Plasmaserv's forecasts take into account both the development of the profile market and the implementation of the new medium- and long-term development strategy, which is based on the growth of the sales team and the expansion of the product portfolio, by concluding solid partnerships with new suppliers. This year's ambitious plans are based on several directions, the most important of which are the growth of the product portfolio, market demand and the expansion of the internal sales team. In recent years, the market has seen an increase in demand for laser cutting machines, so the expansion of the equipment portfolio to cover such a need came naturally. Collaboration with some of the most important global players in the welding and cutting industry, such as Hypertherm, Kemppi and Eckert, is an undeniable proof of the stability and professionalism shown by Plasmaserv in the way of approaching projects, efficiency and implemented business solutions .

Reporter: Thank you.