The crisis from Ukraine prevents Romgermed from expanding abroad
Romgermed Healthcare Group announces its rethinking of the expansion strategy towards the Republic of Moldavia and Bulgaria pursuing the regional geopolitical situation, stating that the move does not affect the company’s turnover, as estimated to increase by 15% compared to 2013, when the addition was of 20% compared to the prior year (18 million euro in 2012).
Last year, Romgermed invested approximately 2 million Euros, and in 2014, in addition to the expansion of the laboratories network and the incorporation of Romgervet, the works for the group’s hospital unit are coming to an end, according to a release issued todays to the editorial office.
Ciprian Nicoara, Romgermed’s general manager, claims that any investment plan needs economic and political regional stability in the first place, as well as predictability: “Nothing can be built on uncertainty and tension, and the issues from Ukraine have an unfavorable impact, thusly affect the forecasting capacity and trust in the good economic path. This negative perception was consolidated in the last weeks and between the businessmen and the banking environment and, unfortunately, not only just because no stabilization is foreseen, but on the contrary. All recent political positions from the EU space and Russia indicate an accumulation of tensions”.
The official added that the expansion of a business needs energy and enthusiasm, however these only as additions to the prudence and analyses of success perspectives: “The plan regarding the expansion was correct. What is not working is the political, regional climate. Romgermed’s decision is to wait for the clarification of the political situation and the stabilization of the economic evolution in the area”.
The decision does not affect Romgermed’s financial evolution. The company’s analysts deem that the perspectives on the internal market are positive, of reinforcement. The expansion plan had and still has in regard the business development and increase of income, however also implies the performance of the related investment.
“Now we shall direct these funds for the reinforcement of capacities on the national market. For the Group, the evolution on the internal market is anticipated to be positive in the current year as well. We have considered that Moldavia and Bulgaria are markets in progress of maturation, of growth – the patients become more informed and more careful to select quality (…). In addition, at the beginning of the year there was the perspective of a good economic evolution at European level and now, against the instability generated by the situation in Ukraine, and against the economic stagnation in EU, the optimism was moderated. The expansion of a business, entering a new market firstly needs stability, safety and the general impression nowadays is rather of uncertainty”, added Nicoara.
Romgermed also communicates that, 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.
In 2015, Romgermed plans to expend the laboratories network, the target being a coverage of 50% at national level. Also for the next year, the investments in the hospital shall be completed.
„The investment is in an advanced stage from the point of view of works, simultaneously running the process of purchasing equipment and systems that present the hospital’s fitting. This year the negotiations shall be finalized and implicitly, the orders related to the technical chapter (…). 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.
The manager has also stated that the delay of launching bears a clear explanation: “As stated with other occasions, the sanitary system in Romania is improvable. Representing part of the private component of this system and we must report to refer to the issues of this system and to be subjected to procedures which, in many cases, are difficult to cross both logistically as well as from the time perspective”.
Romgermed Group currently holds 20 laboratories at national level, in 2013 performing over 4 million tests. In Bucharest, Romgermed holds 21 own sampling locations, in the most important polyclinics in the city. “For year 2015, we proposed to develop a network of sampling location at national level, as currently, we only cover the counties around Bucharest”, adds Ciprian Nicoara.
As of inauguration (the 15th of May), the veterinary analysis laboratory Romgervet had an increase in the turnover of over 20% per month, concludes the release.
