The conflict from Ukraine and the economic decrease in EU postpones the expansion abroad of Romgermed
Romgermed Healthcare Group announces the postponing of the expansion strategy in the Republic of Moldavia and Bulgaria pursuing the regional geopolitical situation.
This management move does not affect in any way the Group’s turnover, which, in 2014 holds an increase of approximately 15% against year 2013, when the increase was of 20% reported to the prior year (in 2012, the Group posted a turnover of 18 million Euros). We need to state that, in year 2013, Romgermed Group performed investments of approximately 2 million Euros and, in year 2014, in addition to the expansion of Laboratories network and the incorporation of ROMGERVET, the works at the Healthcare Group’s hospital unit are coming to an end.
Expansion, prevented by regional instability
Ciprian Nicoara, Romgermed Healthcare Group’s General Manager states that any investment plan first and foremost needs economic and political regional stability, predictability. “Nothing can ever be build based on uncertainty and tension, and the issues from Ukraine have unfavorable impact, affecting the forecast capacity and trust in the good economic path. This negative perception was also reinforced during the past weeks between the businessmen and the banking environment and, unfortunately, no stabilization is forecast, but on the contrary. All recent political positions from the EU space and Russia indicate an accumulation of tensions.”
According to Nicoara, the expansion of a business needs energy and enthusiasm, but these only in addition to prudency and the analysis of the successful perspective. “The expansion plan was correct. The political general and regional climate is not working. Romgermed’s decision is to wait for the clarification of the political situation and the stabilization of the economic evolution from the region”, states him.
The decision to postpone the expansion does not affect the financial evolution of Romgermed Healthcare Group in anyway. The company’s analysts deem that the internal market perspectives are positive, of reinforcement. The expansion plan aimed and still aims to developing the business and increase of income, however it also involves the performance of related investment, “Now, we shall direct these funds for the reinforcement of the national market capacities. For the Group, the evolution on the internal market is forecast to be positive for this year as well”, explains Romgermed General Manager.
The patient, the only loosing party!
„We considered Moldavia and Bulgaria to be markets that are still expanding, still maturing – the patients become more and more informed and careful to select quality and we provide a quality service based on the experienced gained for many years, on the investment in specialists and in new equipment. In addition, at the beginning of the year there occurred the possibility of a good economic development at European level and now, given the instability generated by the situation from Ukraine and the economic stagnation in the EU, the optimism is more tempered. The expansion of a business, entering a new market first and foremost needs stability, safety and the general impression nowadays is rather of uncertainty”, stated Ciprian Nicoara. According to the Group’s plans, providing the current tensions shall disappear and the business climate shall be a safe one, the expansion plan shall be updated with the information from the related moment and a decision shall be taken.
2014, increase by 15% of the turnover
According to the financial data updated as at the 31st of August 2014, Romgermed Healthcare Group finds itself on a superior stage of the income chart. An increase of up to 15% in turnover is estimated.
2015: laboratories with national coverage of 50% and completion of hospital works
With respect to year 2015, the laboratory network shall be expanded, the target being to obtain a coverage of 50% at national level. Also for the next year the hospital investments shall be completed, leading to a sanitary unit with beds, to run the specialized activity in a field uncovered so far by private units.
„The investment is in an advanced stage from the point of view of works, simultaneously running the process of purchasing equipment and systems that represent the hospital’s fitting. This year the negotiations shall be finalized and implicitly, the orders related to the technical chapter. As they are state of the art equipment, some even unique in Romania, we may state that the entire endeavor initiated by us has a powerful innovating character, if we were to report to the specialty market. However, given the bureaucratic, laborious process of performing the documentation and procedures on the activity observing the norms specific to the medical sector, we face a few delays with the functioning authorities. And it is against this aspect that we express the trust that the entire endeavor shall be finalized in due time” sustains Ciprian Nicoara
According to the Group’s General manager, the delay against the announced launching moment has a clear explanation: “As stated with other occasions, the sanitary system in Romania is improvable. As we represent a part of this system’s private component we also need to refer to the issues which characterize this system and obey the procedure which, in many cases, are difficult to cross both logistically as well as from the time point of view.”
Positioning against the competition
Romgermed group currently holds the largest laboratory network in Romania (20 laboratories at national level), in 2013 executing over 4.000.000 tests. The company provides these services at a superior quality standard, nevertheless applying affordable prices. Romgermed’s effort is mostly focused on the largest sampling location network in Bucharest, where it holds 21 own sampling pints, located in the most important polyclinics in the city.
Furthermore, the company has succeeded in significantly optimizing the tests issuance time – accessible to patients in a few hours! Moreover, the strategy of incorporating ROMGERVET – veterinary laboratories – proved to be a good one at investment level. “Romgervet, set up as the largest veterinary tests laboratory in Romania, the only one of this kind working in compliance with the international quality norms and standards, proves of to be an inspired investment.
As of its opening (the the 15th of May 2014), it had a turnover increase of over 20%, which make us more trustful in the favorable financial evolution. For the year 2015 we aimed the development of national sampling location network, as we currently cover only the counties around Bucharest”, says Ciprian Nicoara.