BUSINESS Magazin was interested in finding out about Blue Projects’ success story which began 10 years ago.
Discover how everything started and what our future plans are. This news is a translation of the Business Magazine article published on January 17th.
Almost a decade ago, a Turkish and a South African set up an engineering and project management company in Romania, with an initial investment of approximately EUR 20,000. The Romanian company Blue Projects, with an annual turnover which last year reached about EUR 10 million, has permanent offices in Poland, Russia and Belgium and is still expanding. In this respect, for the next decade, Blue Projects targets a tenfold turnover.
In 2015, Blue Projects recorded a turnover of nearly EUR 6 million and Umut Demircan, one of the two founders of the company, estimates that last year’s turnover exceeded EUR 10 million. The plans for 2017 aim at doubling the business, through the contribution of the newly opened company branches. Thus, within ten years from the company’s set up, the proceeds might reach as far as EUR 20 million.
The story of Blue Projects
The story of Blue Projects began in 2007, when the two managing partners were working within a large industrial project, on a decommissioned site, for an international engineering and project management firm. “it was then that I met Neal Barber, my current business partner,” says Umut Demircan. When they managed to turn a project, which foretold failure, into an utter success (the story involving the idea of replacing a crane by help of a helicopter), the respective client suggested that they set up their own engineering and project management company. That was the moment the idea of a new business came to life.
Umut Demircan first came to Romania in 2003, on business. Subsequently, he worked for several local projects, which allowed him to access the business environment. “During my stay in Romania I was impressed with the quality of education in engineering and the large number of very talented engineers, but I also noticed that, unfortunately, the qualities of project managers were somehow inferior to the human capital of the country,” says the Turkish entrepreneur. So, he came up with the idea of setting up a company, together with his associate. ““When we set up Blue Projects, I confess I was not financially in a great shape. I was about to complete repaying my MSc education loans […] Our initial investment cost was financed by the advance payment we received from our first order, 20,000 EUR”, said Demircan.
Their first local contract was concluded with Sabmiller for Ursus Brewery in Buzau, a “multi-million EUR project”, as Mr Demircan mentions. The project envisaged the extension and modernization of the manufacturing plant and equipment installation needed to produce new sorts of beer, such as Redd’s and non-alcoholic Ursus. Blue Projects was responsible for several services, including design and construction management, cost management, health and safety and project management.
Ever since its set up, Blue Projects has developed a comprehensive package of consultancy and design services, able to cover a construction project throughout its entire lifespan, embedding all required specialized disciplines. These services are provided by the main offices from Bucharest and Cluj, which employ more than 130 experts. In time, the firm has grown globally and currently has permanent offices in Poland, Russia and Belgium, in addition to the Romanian office (the company headquarters); besides, Blue Projects is also active in the Czech Republic, Canada and the USA.
“I feel compelled to say that we do not differentiate between our clients, in terms of their size, but we want to bring added value to each project carried out,” adds Demircan. As for monetisation, he compares this to a boxing match: ” Once the box match starts, we do not count the number of fists we are throwing as per our quotation, but keep going on, until we win by knock out.” The quotation does not represent the core of a project, argues Demircan, and the plan is always amended according to requirements. “Having understood the bespoke scope of any given project, we put together the right plan that we quote upon, which is quite a challenge, as projects have a very dynamic life cycle from beginning until completion,” explains the entrepreneur. Within the near future, Blue Projects intends to open new offices in Canada and Johannesburg (South Africa), adds the co-founder.
In 2017, in addition to doubling the business, through the contribution of the new branches, the company aims at doubling the number of employees, in order to properly carry out its numerous projects. Over the next decade, the founders hope to reach an annual turnover of EUR 100 million, ten times higher than last year’s financial results. Blue Projects would thus become a global provider of project management and engineering services, with more than 20 permanent offices worldwide and over 1,000 employees. “We are able to provide project management and engineering services for any construction project in the commercial, retail, residential and industrial sectors. We are proud to come from Romania and we wish to persuade our clients – not only from Romania, but also from the home countries of our competitors – of the fact that Blue Projects is able to deliver projects which are of the same quality as those developed by our competitors, if not even better”, mentions the co-founder.
Demircan admits, though, that over the last ten years, many other good project management companies have developed in Romania. On the other hand, the co-founder of Blue Projects believes that, in order for this market sector to evolve, a platform which should develop communication with other project management providers could help establish a clear direction for the Romanian profile industry. However, such a platform should not envisage increasing profit margins or market expansion, but rather focus on building proactive relations with universities or post-graduate education institutions, creating ethical benchmarks and finding new ways of contributing to the development of our society, explains the Turkish entrepreneur.
“I first came to Romania in 2003 and I can honestly say that there have been moments of ups and downs in Romania’s economic development. The way Bucharest has changed since then is extraordinary – it has turned into a genuine European capital. But there are still many things to be done for the population, because once you get out of Bucharest, you can see that the economic development of the last 13 years is not that impressive” says Umut Demircan about the country which “has adopted him”. In his opinion, amongst the urgent measures that need to be taken are the infrastructure projects developed on the outskirts of the capital city, which should be commenced and finalized as soon as possible, to allow goods to be produced and exported quickly and to attract, thus, many more investors in Romania.
This fact would obviously increase the number of jobs in other regions, as well and would raise the living standards throughout the country. “I think a country needs at least one of the four basic elements which lead to development: population growth, innovation, increased productivity and foreign investments”, argues Demircan.
Because the population is quite stable here, the entrepreneur believes that Romania should focus more on education, to increase productivity, and also on investments in research and development, and on attracting investment projects. “Without these essential elements, no real growth can occur, but rather remains a mere illusion,” concludes Umut Demircan.