At present, globalization is the first negative example in the history of Romanian business environment, Deloitte representatives believe, and the companies must implement the most effective operational management. Each business and industry is different, and all Romanian managers will have to make some tough decisions, and Deloitte representatives advise is to make them now.
“The era of hero-entrepreneur is ending in Romania. This is not the first or the last crisis. We are living moments when operational management is tested, and this form of situation management is not summed up to cutting costs, but to sophisticate the management tools”, said Antonis Ioannides (photo), Partner M&A Transaction Services.
Deloitte organized yesterday, an informal meeting with the company’s top managers, in the context of unprecedented international financial crisis, which has effects in Romania as well.
According to specialists at Deloitte in Financial Advisory, the prospect of an impending economic crisis calls Romanian companies to prepare a real and effective strategy, to provide a successful evolution of activity.
“This kind of strategy involves reorganization on different business levels: financial, operational, and logistic. When the management will acknowledge the mechanisms to reduce the shock or even to avoid the impact of a difficult market, the crisis itself will become a challenge, rather than a disaster”, said Hein van Dam, partner in charge at Deloitte.
In crisis, well-prepared advisory companies have the opportunity to gain market share. “We have more work to do in this period, as the crisis will lead to more mergers and acquisition transactions to relocate the capital in economy”, said Van Dam, adding that entrepreneurs and investors in Romania must focus on the fields they best render output.
Consolidation of some key-sectors in Romania will be the main effect forecasted by Deloitte for local M&A market.
“Many industries will have to consolidate if Romania will be hit by financial crisis. I expect many transactions in the banking sector as well as in leasing segment, where many independent companies will be taken-over”, said Ioannides.
He added that is not sustainable that for example, Greeks to have so many banks in Romania.
Moreover, consultants at Deloitte anticipate a concentration of Romanian pharmaceutical industry where the number of players is too high. “I expect to see 2-3 remaining players in industries such as pharmaceutical, and we should ask ourselves what is the future of companies like Actavis”, said Hein van Dam.
The Iceland-base Actavis is one of the world’s biggest producers of generic drugs. At present, Island is seeking solutions to cope with financial crisis that has seriously hit the banking sector of the country and the Icelandic krona dropped nearly 40% since the beginning of the year, the country’s three biggest banks were put under state’s custody and the government requested international help.
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