For Alusystem, part of the Bog’Art group, 2022 looks very promising. The company started 2022 with 70% of its production capacity contracted. Currently 75% of contracted projects are residential projects and only 25% office or other functions. There are signs that the balance is shifting a little, but residential projects are the predominant ones on offer.
“For 2022 we estimate a 20% increase in turnover compared to 2021,” said Răzvan Popa, Executive Director of Alusystem.
According to him, an open relationship with project beneficiaries is the key to success; ongoing and honest communication at these times can be the key to successful projects in an unstable market. Perhaps now more than ever, trusting relationships cultivated over time will be the foundation of success.
In 2021, the company shifted its strategy to the residential area using the technology and know-how it had accumulated in the office/premium area, and now it can be seen that it was a winning strategy.
Certainly the transition from the office to the residential market has been an effect of the pandemic, given that one of the current requirements of buyers is to have a dedicated space to set up a home office in the context of the new trend of hybrid working, which will continue.
However, Răzvan Popa argues that it is not yet the case to discuss about a market restructuring. “I think we are rather talking about a restructuring of consumer needs in this market. The buyer has changed his priorities with regard to the housing space, but in essence the market continues to offer something for all customer profiles.”
He says that there is a shift in buyers’ focus towards light and generous spaces and an increased focus on highly insulated homes, so saving energy is no longer just a marketing phrase but a reality.
Alusystem currently has residential projects worth over €14 million with the largest investors in the market, and two office projects worth over €6 million under contract. „”It is true that the large share of turnover in 2022 is given by the Hi-end residential area in the projects One Properties, Peninsula and One Modrogan, but also in office we are present with projects like Poșta Puișor, U center 2, Victoria Park extension – My Hive.
There are many real estate projects under development at the moment and this growth is correlated with all industries and supported by national economic growth. There is a possibility that the next drop (in terms of volume) will be generated by a shortage of materials and not a drop in demand in this market.”
“This year we are investing in technology and human resources. It is the only way to mitigate the effect of rising prices, which seems to be going on and on. It is only through engineering and technological solutions that we can offer added value to our services”, said Răzvan Popa.
Asked what the problems in the building sector are and what obstacles they face in their day-to-day work, he said that “at the moment the problems in our industry are coming from two totally different directions, but which cumulatively amplify the uncertainty in which we live. The lack of availability of raw materials is a crisis not seen in the fast century, leading to exponential increases in raw materials.
What does an energy crisis mean over this situation? Once you put these problems on the table, the shortage of skilled labour is not so tragic, but when you add it to the problems mentioned above, it makes the situation even more difficult.
In addition to the high cost of building materials caused by the pandemic, skilled labour is becoming a rarity. And that shows in the costs. Alusystem’s chief executive says this year the cost of labour could rise by at least 20%.
I believe that resilience is the answer to getting through the next period. I don’t think the solution has to come from a third party, I think we as individuals and the companies we represent have to show resilience, understanding and work ethic during this period and together get through the difficult times ahead.”
Given the interconnectedness of business, today we are influenced by any unnatural change in political-military contexts. In the current context, where the main players, Ukraine and Russia, are the largest suppliers of raw materials to the construction industry in Europe, the global supply chain is strongly affected and this is immediately felt. “In a market where demand is relatively constant but supply is falling by half, disaster strikes. As a result prices no longer make sense and raw material availability becomes an illusion.
The company Alusystem, part of the Bog’Art group, was founded in 2003 and is a leader in the facade and curtain wall market in Romania.