NIMET is a remarkable industrial success story. Started by a mechanical engineer, it began as a niche producer of bars, shafts and tubes for hydraulic lifting, loading and handling systems. Just one year later, the Austrian giant Palfinger, the global market leader in cranes, entered into a joint venture with the Romanian company, in a move that Palfinger has described as one of its best investments ever. NIMET CEO, Samy Numan, explains how a small manufacturer from Romania quickly morphed into a respected industry leader that exports to over 70 countries.
What is your background and how did you get the company started?
I am a mechanical engineer and a machine tools designer. In January 2008, I started a small company to make niche products, starting out with just 10 people and a 500m² facility where we produced our own rods for local industry. In 2009, Mr. Palfinger from Austria contacted me and he proposed a joint venture that I accepted. He said that he would like to work with me and make special piston rods together. So we built a 1000m² facility in 2009, during the crisis, focusing on very particular products that were hard to find. We grew the business until 2013, when we changed the joint venture conditions, and we achieved very good results last year, with a turnover of €85 million and a staff of over 600 people. We now export to over 70 countries and we enjoy a good reputation. NIMET products are now known worldwide.
How does the association with Palfinger work?
Palfinger does business in Romania, but they only come visit twice a year, as they are fully confident in our Management, and we pay them back with full transparency. After 11 years of partnership, everyone is happy. Last year they said that NIMET was the most spectacular investment Palfinger had ever done, in terms of their return investment.
What is it that sets you apart from the competition?
We have an entrepreneurial spirit here; we explore different ideas to build the right products for different clients and countries. Some foreign companies who came to Romania made mistakes: they came in with lots of strict rules and killed creativity. We have rules too, but we also encourage bold initiatives and allow making mistakes from time to time. Some rules can stifle a business; we have seen it happen. At NIMET, we stimulate creative solutions for different needs, and we provide something more than just products: we also offer services to our customers, which add value. A full 40% of our production is customized. And our most important advantage over our competitors is that we react quickly with replies during the same day. We have 14 sales people who are constantly online. Time is the most expensive thing these days; customers don’t have time for lengthy processes. If you can offer the product they want immediately, you win.
How did Palfinger find you in the first place and get interested in your work?
Before NIMET, I used to work at a Romanian company where I developed some innovative solutions and helped Palfinger Group on a project. Mr Palfinger, who met me then, later approached me about a dream he had. He wanted to produce special fully automated cranes to clean and paint ships. For this project he needed special nickel chrome rods that would be resistant to seawater, which he couldn’t find. So we made them for him. He saw that we were a strong team of engineers and felt he could develop such a product with us. There are currently two producers in the world, one in Sweden and one in Romania (Nimet).
How is the balance of the industries that you work with?
It’s quite good and the risk for our business is rather low: if one sector is not doing so well at one point, say agriculture, there will be others that are generating good figures (oil extraction, medical equipment, fitness machines). Nearly every industry needs to lift something, to transport something, to move something. Ours are unique products, yet universal ones at the same time.
How relevant is your export market?
Around 70% of our exports go to Europe, and the rest is quite evenly distributed: 4-5% to the United States, 4-5% to Brazil and Chile, 4-5% to Russia, and a little less in Asia Pacific. South Africa is quite a good market as well. But being part of the EU is important, because our main suppliers are from the EU, and you need a lot of money to buy the raw materials in this line of business, so you need credit security, which is ensured being located in Europe. It also helps when it comes to selling your products, as in other markets you cannot secure your sales in the same way. The size of the hydraulic market in Europe is €800 million, in the US it is €1 billion, and in Asia Pacific it is €700 million. Working in Europe means no VAT, secured credit, and a certain reputation: other countries don’t judge a European company as they would judge a Romanian company on its own.
Is there room to grow?
Yes, mainly by taking market share from other companies. For nickel-chrome plated rods we only have one competitor, in Sweden, but for chrome bars there are five producers in Europe. Keep in mind that everything from printers to excavators need the kind of products that we make. Even hospital beds use hydraulic systems. Only 10% of our rods go to Palfinger; the rest go to all kind of different sectors.
How important is the German market for NIMET?
Germany is good for us, because customers there ask for very special products with a lot of specifications, quality standards, and different characteristics. They demand high quality. We have a very good sales balance in Germany of all different sectors that we cater to. If you go to Italy, Spain or Turkey, they tend to use standard commodity products. But in the Northern Europe they ask for more specific products that are also more expensive. In Belarus, for instance, it is mostly agriculture. But in Germany there is lifting, parking, fitness, automotive, and so on.
Does your company invest in innovation?
We are always innovating our machines. We built the main facilities ourselves, and this is the key to our success. We build machines according to customers needs, in order to make what they require with maximum productivity. Palfinger has one criteria, Volvo has another one, and so on. You need to respect each one of them, and this is the hard part of the business. The key point is to build equipment with automation and yet to keep also the ability to switch from one specification to another.
You have found your team in Romania. How do you see human capital in this country, and in your industry in particular?
Our joint venture with Palfinger gave us the push we needed to invest in a group of engineers who helped us develop the business. In the last few years engineering students have been coming back to Bucharest University. There was a gap for some years because there was no demand for them, and the market adapted to that. Now I see more students in engineering courses again. NIMET runs a collaboration with a local university where we select second-year students and offer them a scholarship to come spend time with us and get a sense of what we do, and maybe join us when they graduate. I feel that the company must invest in talent this way. If you wait for engineers to come to you, you can wait a long time. You need to go out and find them. We work 24/7 all year round, we have 600 people working in different shifts, therefore we have the capability to invest in human capital.
Are you planning to expand in any way?
A few months ago we bought some land and in 2020 we want to start the construction of a new building. We want to book our capacity through contracts with partners like Palfinger, Caterpillar or John Deere, and concentrate on EBIT and on securing a sustainable business for the future. I can sell my products in many parts of the world, it’s just a matter of price, but the time has come to focus on a few strong players and on top quality. This is a difficult year: Brexit, the situation in Turkey, US-China trade wars…there has been a decrease in investment in many parts of the world, so we need to adapt our fix costs to this reality.
What are your expectations for this year?
We expect a similar turnover or higher, but less profit because the automotive industry experienced a slowdown, which means that so did steel, and this sends a signal to the market that everything is getting cheaper. All the horizontal businesses are impacted.
How would you improve the image and investment conditions in Romania?
There is an infrastructure problem here, and also a problem with retaining talented employees. But we have managed it: we have built a company with a good team that I found right here, and in seven or eight years we took it from nothing to a globally respected company. There are skilled people here, you just need to go out and find them, and give them an incentive to stay by offering them a rewarding job. My team is very proud to be here, and I have not lost a single person in top management in all these years, which means they are satisfied. So the message is, if you invest in people, you will have a good return.