COMPANIES & STRATEGIES - INDUSTRY

Industrial equipment manufacturing

Industeam secures its production in Romania



By acquiring one of Emsil’s three sites in Romania, Industeam is building on its production base in Eastern Europe. Photos: Romain Gamba / Maison Moderne

By acquiring one of Emsil’s three sites in Romania, Industeam is building on its production base in Eastern Europe. Photos: Romain Gamba / Maison Moderne

The Luxembourg industrial equipment manufacturer Industeam has signed a contract with Romanian company Emsil which will see it base its production there. This will create a new subsidiary for the company, which has been continuously diversifying over the past 15 years.

For several months, Thierry Franceschetti has been preparing the dossier from his office in Bettembourg. A few return trips to the site were needed before signing the contract on 7 August. This will see a subsidiary for Industream created in Romania effective from 1 September.

The Luxembourg-based industrial assembly company, which was created in 2006, currently has 17 sites “from Calais to Mulhouse” and 700 employees. Most of its activity consists of building or transferring industrial equipment from one country to another. Between 40% and 45% of Industream’s activity comes from maintenance. On the manufacturing side the group has always relied on subcontractors. It will now supplement these with its own production of industrial equipment via Industeam East Europe in Romania.

A base in Aiud

The group started doing work in Romania about ten years ago. “We have done a few large transfer operations. And we saw that the workforce matched our needs,” says Franceschetti. Several of Industream’s subcontractors linked to the automobile industry began to disappear because of changes in the sector and the covid-19 crisis. “We thought about integrating production rather than subcontracting it in order to control and secure our offer,” says the managing director.

Industeam analysed the Romanian market and identified the company Emsil, which specialises in the manufacturing of machine tools and turbines. The relationship began with subcontracting. A year and a half later this led to the recently signed contract. “We took a minority stake in a group of 300 people, with a turnover of 15 million euros per year,” says Franceschetti. One of Emsil's three sites becomes Industeam East Europe, in which Emsil retains only a minority stake.

“For example, we have just signed a three-year contract to expand a factory in Mexico. The equipment will be manufactured in this workshop,” says Franceschetti. The shares of each party, as well as the sum paid as part of the transaction, remain confidential.

The 30% limit

This is not Industeam’s first acquisition. The equipment manufacturer already integrated D.S.D. Luxembourg and Imecolux into its portfolio at the end of 2020 as well as Secométal, one of the French subsidiaries of Belgian company Pirson. For the two Luxembourg-based companies, this represents a turnover of €10m and 80 new employees. “They were our competitors and were working in areas of activity such as cement, in which we were not.”

Diversification has been “the group’s strength.” Initially specialised in the steel industry--its first major operation was the transfer of the rolling mill from Dudelange to Genk in Belgium--it then started working in the food-processing industry, the railways, etc. “We don’t allow ourselves to have more than 30% of our orders from the same customer. We don't want to be dependent on a single sector of activity.”

For the past three years, Industeam has been turning to green energy. “We’re busy converting thermal plants that used to run on coal using pellets,” says Franceschetti. “We are working on biomass projects, on dams, in hydro power. We also want to offer our services for the construction of hydrogen plants.” All this already represents 30% of the business. “Every year, we think about adding more stability to our business model,” he says, without revealing what is next for the company. For 2021, he expects a turnover of €90m. In 2019, it reached €75m, only to fall by 20% in 2020. The goal is to reach €100m before 2022.

This article was originally published in Paperjam. It has been translated and edited for Delano.