„Tractorul” moves to Reghin

„Tractorul” moves to Reghin

They started with a tyre and a radiator, in a house in Reghin. Now they’re in production, trade and they have a turnover of over 30 million euro. Besides, they wish to try their luck on the market of agricultural tractors and to move the “tradition” from Brasov to Reghin.

Anca Doicin Redactor-sef Business Days Magazine

For the first time, after over 25 years, a tractor manufacturer has decided to invest 1.5 million euro in a research & development centre. The news is important for at least two reasons– we have an important tractor manufacturer, for the first time in so many years, and, moreover, one that is able to undertake an investment in an area ignored by many industries in Romania – R&D.

For the manufacturer in question, this centre is going to sketch and test new tractor models and to propose the prototypes that are going to create growth.

From the point of view of the business, at the moment, for the manufacturer things are like this – a share of 12% on an ascending market – that of agricultural machinery, and over 92% on an almost mature, settled market – that of forestry machinery. The stake – new strong tractors with competitive prices and quality, comparable to those of big producers, which can ease and strengthen the way to export, helping it consolidate its position on the internal market at the same time. The manufacturer is IRUM Reghin and the stake is placed by the Oltean family.

STARTING POINT. “We hope the decisions we have taken are the good ones, those that will help us grow”, says Andrei Oltean, development manager at IRUM, the second Oltean generation owning the business from Transylvania. Anyway, the money for the development of the research centre comes from European funds and the company’s profit, which is and will be reinvested, not from other sources of financing. “We’ve had loans and we’re sick of that”, laughs Andrei Oltean, the only member of his family available for statements – the other two were abroad, on business. From the gates of the research and development centre would come out forestry and, above all, agricultural tractor prototypes.

In theory, according to the development manager, IRUM would do well in the field of agricultural machinery. “In 2010, when we decided to enter the market of agricultural machinery, we noticed there was no other Romanian representative with a product. Although the market does exist. From the point of view of business– agriculture has a huge potential”, he adds. According to Andrei Oltean, on the market in Romania, about 2,000 tractors are sold at the moment, and studies show that over the next 5-10 years, almost 10,000 tractors will be sold. “As a comparison, the Polish tractor market is about 20000 tractors per year. So if we want to go somewhere at a European level, from the standpoint of technology, we would need more tractors per year”, he says.

The other players on the agricultural machinery market say the same thing: the market can stand them all.  According to the players, the best year was 2013, when 1900 units were sold, and then the numbers of tractors sold varied between 1,600 and 1,700 units.

From the estimations of Autovit.ro, an online platform for the sale of agricultural machinery, the national park is about 184,000 units. But Autovit also says that 73% of the tractors have exceeded their normal working duration – one third are even older than 20 years.

“Now, the technology on the market is outdated. We’ve seen other studies that say that if we want to have the same degree of mechanisation as Poland, we should inject 110,000 new machinery, to reach the same level of technology as a civilised country”, argues Andrei Oltean.

And then we get the legitimate question: why doesn’t modernisation occur sooner? Why doesn’t the market grow faster? The most plausible response is related to price. Because large farms buy established brands and small ones care about the price. Autovit noted in a study from 2013 that farmers with limited funds and smaller surfaces buy tractors under 45-50 HP, whose prices vary between 13,000 and 20,000 euro.

Therefore, although the market exists, to find its own spot, the producer in Reghin has to come up with reliable models and “at the best quality/price ratio”. Quite problematic, so to speak. But, for the moment, the bet about agricultural tractors is not the first one assumed by the Oltean family.


Like the company’s motto, “It pulls and it performs”, the Oltean family is accustomed to work. And results. From a debt of 2 million marks, they had a turnover of over 7 million euro last year, they kept jobs, they diversified their production, with agricultural tractors, and  they make all the investments out of the profit. Moreover, from privatisation until now, with forestry tractors, have managed to cover 92% of the market.

The IRUM owners made their first money out of work, too, in holidays in Germany. “I remember, I was very young, they worked either in grape picking, or in constructions, to be able to save money”, says Andrei, who used to dream of becoming a tractor driver and who now has a PhD in engineering, in tractor construction. With the saved capital, the Oltean family establish, in 1993, a trading company, Maviprod (an acrostic from Mircea, Andrei, Violeta), which he used to distribute spare parts and accessories, as a response to a demand he notices on the market. “You simply couldn’t find spare parts. Everything started with a tyre and a radiator, in a house, across the street from our current  office. Anyway, my parents added<prod> to the name because this is what they wanted to do – production. Engineers, both of them, they couldn’t imagine not producing something at a certain point”, remembers Andrei.

The occasion came up in 1993, once IRUM was privatised. With the money from Mavi and a bank loan of one million marks, the Oltean spouses decided to privatise. “Basically, when my parents bought the factory, in 1998, everything was derelict. They bought the market, because IRUM was known as a manufacturer of forestry tractors, and the name. At the time of the purchase, my father got a loan of one million marks to pay IRUM. The debt was two million marks and it was paid until early 2000s. It wasn’t a cheap privatisation, with a lot of real estate in it. My parents wanted production”, highlights Andrei Oltean his parents’ determination. Later on, wishing to keep his business “private”, he buys back the shares of private investment funds, for which he spends another 3 million euro, this time. Currently, the Oltean family owns over 90% of the business.


NOW. But the development centre in Reghin should also produce forestry tractors. Just this year, IRUM marketed three new forestry machinery, one of which was in collaboration with Lockheed, one of the strongest producers on the market. “In 1998, when my parents bought the factory, it was very old,  since 1953, and from a technological point of view it didn’t really allow the development of… good products, at the time. What the factory allowed us, what had value, was the end product, which already had a name, its place on the market. And, step by step, after strong investment in technology, in 2010 we reached that level that can allow us to create great products”, Andrei sums up  IRUM’s history of almost  20 years. Certainly, after they afforded it, they also designed a clear strategy for exports. IRUM will enter external markets through dealers, who should afford to buy at least one IRUM tractor, but, most importantly, to be able to train their people in services. “Since 2011, we have tried, step by step, following  a  concrete  strategy, to identify dealers on external markets. We currently have really good dealers in Germany, France, Bulgaria”, says Andrei Oltean. “If a German manufacturer comes to us, ten companies will want to work with it. If you want to go to Germany, you have to struggle to get their attention. The most important part in identifying the dealer – having people who can solve a problem in the service within 48 hours. On our market there are big companies trying to penetrate for over 10 years, but they’re losing the after-sale part because they cannot be prompt”, explains the IRUM development manager.

After all those years of investments and making quality products, the development centre is the next step as regards the evolution of IRUM – “it means we can afford developing as far as machinery is concerned, and that will allow us a wider ranger and, in the next years, to be able to export at a higher level. We want to develop organically and we’re doing all these things step by step. We are currently identifying distributors in Poland, Hungary, Slovakia, the Czech Republic.” The strategy he keeps talking about is designed for five-ten years, and the penetration of the markets of South America and Indonesia – the biggest and most competitive in the world, would be the icing on the cake. What growth does the strategy foresee?

“This year we are to have the same turnover as last year, somewhere a little above 30 million dollars. As for what happens in five years… everything depends on the success our prototypes will have. We don’t want to brag and say grand things. We’d rather do and then tell”, states Andrei Oltean, elliptically.

But as the first prototype is to be marketed soon, the future is being written now in Reghin.


This article is taken over from the 11th number of Business Days Magazine. 



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