About online trade, employees brought from Sri Lanka and the price of timber in a discussion with Alexandru Puchianu

From 500 m3 of product Dippanels.ro swallows about 12-15 m3/month

I had arranged to meet Alexandru Puchianu for a discussion at 1.30 in the afternoon at Dip Panels headquarters in Zărnești. He was coming from a meeting. I had called him that morning, in a bit of a hurry, to see if we could set up the meeting that very day. He took half an hour to give me an answer and probably rearrange his schedule. Half an hour later he confirmed the meeting.

I arrived a little early. At exactly 1.30 he arrived, exactly as we had agreed, and we quickly went on a tour of the factory. For those who didn't see first issue of Revista din Lemn, Alexandru Puchianu is the manager of Dip Panels, a long-established company in the production of wooden panels, which has boldly entered the online market. Dippanels.ro sells, among other things, stairs and tabletops.

I say bravely because online sales do not represent a large percentage of Dip Panels sales. They produce solid panels and almost all sales are to companies that use the panels as raw material. 90% of sales are export. "We are currently active in markets such as Germany, Luxembourg, England, the Netherlands and France. In fact, there's not a corner of Europe where we don't have products, even if they don't go everywhere directly. Austria, Hungary, Switzerland, Germany, Luxembourg, Czech Republic, Slovenia are countries where we deliver directly. Even in the UK we deliver direct. The Romanian market is not yet ready for our products. From 500 cubic meters of product Dippanels.ro swallows about 12-15 cubic meters per month. What I mean is that the ratio is insignificant taken in broad terms. But we test and do it as a hobby..”

We're bringing 24 people from Sri Lanka

Dip Panels has long-standing collaborations with external partners, some of them for 20 years. Export demand is very high, but Dip Panels is working at only 30% of capacity. "These are the limitations that Romania offers in terms of manpower and raw materials. The assets and investments are large, but unfortunately, we have no one to operate them with and, last but not least, we cannot operate them in a profitable manner, because that is what business is all about..”

One of the problems Alexandru Puchianu faces is a lack of manpower. But that's not news to anyone. And because he can't find people here, he tries to recruit them from elsewhere. "We are trying to bring in staff from Sri Lanka. We're going to bring in 24 people. We are working with the help of agencies. We have to provide them with accommodation, meals, all the conditions. We've done a lot of experiments looking for people here, all unsuccessful. We've also tried the Labour Force without success. Unfortunately, we are competing with the car industry and the State in this respect and it is very difficult, if not impossible, to recruit from Romania.”

We have forests that are long past cutting age and are rotting by the foot because there is no access

In the wood industry, the pressure of rising raw material costs has created problems that are difficult to solve. The sensitive subject is generally avoided by people in the industry. Not by Alexandru Puchianu who doesn't see a rosy future for companies and people working in the industry. "The outlook for timber is black. The raw material with its pressures from the state and society - which are not always justified - is an important issue. And we are often faced with this trend - "you cut down the forests, it's your fault". The problem is the source. Everyone comes and blames the wood processor forgetting that the wood processor does not make money from wood. The only one who makes money from wood is Romsilva or the one who sells the forest. The rest just put an added value through workmanship, through technology, through turning wood into another product. But it doesn't make money from wood. Even the forest exploiter does not make money from wood. He makes money from the services he provides. The fact that loopholes have been left to steal ... yes that's right, they exist and they should be stopped ... they should have been stopped. The biggest burden and blame in this system lies with the State through the Forestry Offices. They always cut what is visible, where it is accessible. Because Romsilva fails to build roads. We have forests that have reached the age of felling long ago and that are being damaged by foot because there is no access. No one is going to go and take wood out of the heart of the forests to sell it for 100 euros, twice as much as in Germany, where the forest is on the plane. Nobody is going to buy it. Under these conditions we try to survive as a business. For those who only want wood in the forest I have the following message: imagine life without the wooden objects around you.”

Under these conditions Dip Panels increases margins, reduces the volume of goods produced and reorients. "We need to diversify, to work with high added value. We prefer to reduce volumes, to reorient to another business segment if wood is no longer an option. Plans are no longer made for 6 months or a year. Now plans are made monthly or even every 2 weeks. The companies around us are closing and plans are made as things go on in the market.”

We invest everything we earn in marketing

In an industry very unfamiliar with marketing and sales channel diversification Dip Panels is investing heavily in online marketing. The desire to discover new and simple ways to reach the end customer quickly is visible and commendable. "Think about it, today we are not interested in Dip Panels profit. We invest everything we earn in marketing. If we have collected 3 lei over costs we invest it in marketing ... and think that we do it for the benefit of all. Why do I say that? Because we're promoting wood panels today by pioneering this market, more by educating the market. People are getting useful information, and we, being at the beginning in online commerce, are working hard to create the portfolio, to let people see what it looks like. But we're doing it because we believe that to be resilient in the future, we need an educated market. We're doing it to get directly to the end customer. We believe that DIY stores have too high margins, while at the same time not paying the right price for this type of product. Today we see working at dippanels.ro as a hobby that inspires us and gives us confidence in the future. Dippanels.ro is not just about countertops and steps for us. It means an experience that we will certainly use in the future much more deeply than we do today.”

And if you're wondering what kind of results dippanels.ro has in terms of transactions, Alexandru Puchianu makes no secret of it. "I think we get about 3-4 customers a day on average from online. It's just end customers. We don't have price campaigns for, for example, fitters. Traffic on dippanels.ro generally comes from Google and Facebook, around 1000 sessions/day. We run campaigns on both Google AdWords and Facebook. We pay the highest amounts for Google AdWords campaigns. We have reached 30,000 lei/month in this case.”

Our priority is to educate the market about solid wood

Alexandru Puchianu believes that Romania needs an informed population in all areas, including timber. That's why he encourages us to continue what we are doing now. "To help us directly, the whole industry and you - because Wood Magazine needs wood lovers and to love it they need to know it - there should be more promotion of wood as a material, more understanding of why it is good to use wood, what all the advantages are and in this way people should be informed and be willing to take on a number of disadvantages. I think this is our priority, all of us who work in this field, to educate the market about solid wood. We do not have this culture because in the past very little solid wood furniture was sold in Romania.”

Alexandru Puchianu is the kind of manager who is open to new things and, by extension, to challenges. More entrepreneur than factory manager, he faces problems by looking for sustainable solutions. He leads proactively, making decisions that strengthen the business. In the timber industry he is blazing trails that others are likely to try.