Comtech Co invests EUR 5 mln in Slatina-based factory

Comtech Co invested 5 million euros in a factory for the steel tubing polythene insulation in Slatina (southern Romania), with the manufacture having started in this November in a market put at 100 million euros a year, the company says in a release.As much as 65 percent of the investment comes from Comtech's own funds, with the remainder 35 percent being secured from bank lending.

'Three million euros of a total five million euro-investment was absorbed by the manufacturing equipment, while two million euros went to the building-proper of the factory', company owner Constantin Goanta said.

He added the new production facility is a brownfield-type investment, with 20 percent of the buildings and the storage areas having already been there and having been merely upgraded.

The factory will manufacture 30,000 tons of polythene-insulated steel tubes a year. The new unit will have a positive impact on Comtech Co business, pushing the company's turnover to some 32.5 billion euros next year.

'We forecast 27 million euros in businesses this year and the opening of the factory will bring 20 percent growth of the business next year. Moreover, we anticipate profitability will rise to over 12 percent in 2013, while also hoping to recoup the investment in no more than five years', Goanta added. The company ran 24 million euros in businesses in 2011, he announced.

Goanta said part of the new output of the Slatina-based factory will be shipped to foreign markets starting next year, namely to Europe, the Middle East and North Africa. It will also provide insulating services for the Romanian steel tubing makers.

The new unit will process pipelines for oil and gas transport. 'At this moment, 40 percent of the company deliveries are made to the oil and gas industry, 20 percent to the engineering industry, 10 percent to the energy industry and the remainder to other sectors', the company owner stressed.

He estimates the seamless steel tubing distribution market, a third of which is covered by Comtech Co and Comgaz SA based in southern Ploiesti, where Comtech Co has a 80 percent stake, will amount to some 100 million euros this year. The market will stay flat at around 80,000 tons, he said.