Romanian Courier Cargus eyes boost in 2007 Profit, Turnover

Romanian courier services provider Cargus expects a rise in its gross profit and turnover next year on the back of rising clients portfolio, a senior official told SeeNews.

“For 2007 we project a turnover of more than 25 million euro (USD32 million) and a profit of more than three million euro. The growth will be supported by the rise in the number of the clients and the widening of the services we offer,” Cargus vice-president Carmina Dumitrescu told SeeNews in a recent interview.

Cargus projects a gross profit of 2.1 million euro for the current year on an estimated turnover of 20 million euro, Dumitrescu said. The company reported a 15.3 million euro in turnover for 2005, and a gross profit of 2.46 million euro.

“Currently, Cargus has a 35% market share in Romania and up to 10% from the [country’s] international courier market,” Dumitrescu added.

Cargus plans to consolidate its leading position on the domestic market next year and raise its market share, by pursuing its investments in logistics and by constant monitoring of the market and meeting the demands of the clients, she added.

The company has allotted 2.5 million euro for investments in 2006.
Cargus, (www.cargus.ro) set up in 1991, offers same day delivery, next day delivery, cash on delivery and declared value services. It has a fleet of 800 transport vehicles and employs 1,400.

EU CHALLENGES
“The nearing of the EU integration draws big companies to Romania that invest more and more in the Romanian economy. Also, the rising living standards bring about development of the services,” Dumitrescu said.

Romania will join the European Union on January 1, 2007.

Dumitrescu sees the Romanian courier services market rising rapidly in 2006 and 2007 on growing demand.

She projected the value of the Romanian courier market at 78 million euro this year, up from 65 million euro last year.

“For 2007, we project a total (market) value of 100 million euro.”
Dumitrescu added that once Romania joins the EU, courier firms will register rise in the shipments, especially on international level, and this will boost turnover.

“The companies already present on the Romanian market will have to keep the pace with their competitors from the EU. This will be possible via consistent investments as well as an adequate managerial policy.”

A probable future for some of the couriers will be a takeover by bigger firms that want to enter the Romanian market.

At the same time other domestic firms will have to grow on the European markets to become truly competitive.

“Other firms will choose to specialise, which could be a solution for a moment. In that way the companies will offer exclusively local deliveries or just one type of deliveries, those where they can offer competitive solutions,” she said.

“Cargus chooses to grow.”

Express delivery services company TNT Romania, a subsidiary of the Dutch TNT Express; DHL International Romania, the local arm of German-based global courier firm DHL and Trans Courier Service (TCS); the local agent of U.S. delivery company United Parcel Service (UPS) are among the biggest players in Romania.

(USD=0.7723 euro)