THE KEY TO SUCCESS: A COHERENT STRATEGY, RESPECT AND A GOOD MEASURE OF COMMON SENSE!

Ștefan Cherciu (49 years old)

Position: QFort president;

Professional experience: 12 years in the field of thermal insulating joinery

“My advice for companies in the industry is to carefully prepare their product, train their managers/employees to support development, hire people who have strong foreign language skills for exports, train specialists in services. Although they automatically translate into costs, the effort must not be made overnight and it has to follow a well-established strategy.”

Virtually unknown in the local thermal insulating joinery field 12 years ago, Ștefan Cherciu is an indisputable authority in the industry now, having succeeded in building from scratch a truly successful business model. The strategy and the management team have always been the building blocks that have driven the entire development of the company, which reached a turnover of 42 million Euros in 2015. The key to performance was, as the president of the Casa Noastră group says, the QUALITY OF STANDARD OFFERED PRODUCTS, OF SERVICES, as well as the ambition to always add state of the art technologies to the company’s offer while maintaining a competitive price in strict accordance with the added value. All this has transformed the Craiova-based company into a real trendsetter with an addressability that far exceeded Romania’s borders.

 

-What was the main element that made such an evolution possible?

-The recession forced us, starting with 2009, to shyly shift towards export. We began with Austria and continued with Italy, and in 2010 we managed to report the first million Euros earned from deliveries on foreign markets. Basically, the following year, 2011, was the “T0 moment”, when we were fully prepared for a fair approach to foreign markets, that is, after two years of study... It must be stressed that IN ORDER TO EXPORT IT’S VERY IMPORTANT TO PREPARE THE PRODUCTS AT A HIGHER LEVEL OF QUALITY, ALONGSIDE TRAINING EMPLOYEES, IN ORDER TO PROMPTLY RESPOND TO ANY REQUESTS DIRECTLY IN THE LANGUAGE OF THE BENEFICIARIES IN BOTH SALES AND POST-SALES PROCESSES, otherwise the risk of failure is extremely high and the recovery potential is low! We chose the right path. For example, in Italy alone we managed to increase sales from 4 million Euros in 2011 to more than 12.7 million Euros in the following year and 26 million Euros last year! For 2016 we aim to achieve a revenue target of more than 10 million Euros in France and more than 31 million Euros in Italy. Our market share in Italy has already reached 8.5%, and our target for 2016 is 10%, which will make us the second biggest manufacturer of PVC thermal insulating joinery that operates in this country. We aim to achieve a market share of 15% in the medium term and become market leaders in the peninsula.

 

-How does Romania fit into this equation?

-Domestically, if we take into account the physical volume of thermal insulating joinery deliveries, we no longer occupy the first position. In 2015 we sold 11 million Euros worth of products (about 9 million Euros if we excluded assembly) from a PVC frames domestic market value of approximately 110 million Euros (according to estimates by Interconnection Consulting). That means that we currently have a market share of 8.2% in Romania, which we consider to be satisfactory for the time being. It should be noted that the share of domestic deliveries in the company’s turnover is only 26%, and it will decrease in the coming period, reaching almost 10% in the medium term as export operations will increase.

 

-How profitable is the production activity in the local window industry anymore?

-For our part, the available data indicates a net profitability of 5.5% for 2015 and our target is to reach the 15% threshold. This objective is feasible from our point of view and it can be achieved in the next five years. The path we are going to follow is simple and consists in introducing new high value added products which we will sell especially for export. We have already begun to manufacture anti-insect nets, we will be involved in the manufacture of rolls, blinds incorporated in the structure of the thermal insulated window, aluminium shutters, everything related to the closure of the house, safety and sun protection in general. We have all the technical and logistical means necessary to support this kind of development strategy, which will be accompanied by a consolidation of our staff, which now numbers about 1,100 people (of which 550 are directly involved in production and logistics and 50 in assembly).

 

-What advice would you give your domestic competitors from your position?

-I am not selfish by nature and I want to share with other the experience I have accumulated since I began doing business. Thus, I want to correct an abnormal situation that currently exists in Romania, where most manufacturers sell without a profit margin. For several years, during the early years of crisis, we sold our products at the threshold of profitability just to keep our businesses open. This automatically means regress because if you don’t make a profit you cannot grow, you cannot pay your employees well, you cannot attract quality resources... the preparation of the sale - this idea must be reiterated - is vital: rather than selling a cheap, poor quality product without any services and embarrass yourself, you might as well not sell anything at all!

 

-To what extent will the brand you created constitute a support for achieving your proposed targets in the coming period?

-The QFort brand, which was developed in 2006 and launched in 2008, was chosen following a careful selection process and it fully represents us, suggesting quality, comfort and force-endurance over time... Time helped us... We had the time that we needed in order to show that we are making quality products!... From the very beginning we put an emphasis on the importance of quality and added value, promoting joinery made out of profiles with five isolation chambers, windows with Low-E glass and argon insertions when these types of products were a part of our competitors’ premium segments or didn’t even exist in their offers. This process kept going, for example by introducing the warm-edge bar, the perimeter hardware with two safety point and saline protection, the “Secustik” (anti-burglary) handles, the triple-glazed windows (which now represent 72% of total deliveries in Romania). In Italy, we have over 130 QFort branded showrooms from over 1,300 partners, and the way communication is achieved, through slogan repetitiveness, ensures a high brand awareness. A recent study conducted in Romania showed that 92% of the interviewed subjects recognize the QFort brand and 84% say that it’s the first joinery brand that comes to mind.

 

-Name a few milestones of your development strategy.

-This year we will build an office building. The 4 million Euros investment is aimed at building a state of the art class A building with a total surface area of 4,200 square meters, including a 310 square meters showroom, as well as 14 training and discussion rooms. We will also lay the groundwork for a research department that will focus on developing our own products. One of our surprises will be the release of the forth PVC product under the QFort 7Stars brand - an exclusive QFort profile. Our long term objective for the next 11 years is to have about 15 products that will bring in about half a billion dollars in revenue (more than 10 times the revenue we will make this year) exclusively through organic development, with production being located only on our current site (unless, hypothetically, we make purchases).

Ovidiu ȘTEFĂNESCU

FEREASTRA Magazine - May 2016