IRUM – The ambition to influence market developments

IRUM SA manufactures at Reghin performant skidders and agricultural machinery. Originally intended for domestic market only, IRUM machines are now being sold in several European countries such as Hungary, Ukraine, Serbia, Poland, Croatia, Austria and Germany. Mr. Mircea Oltean, CEO at IRUM talked to us about environmental care, performance, design and the attention to safety in operation and user experience that goes into the machines designed and built by IRUM.

Mircea-Oltean,-CEO-IRUM

Mircea Oltean,
CEO IRUM

IRUM celebrated last year 60 years of existence. How did the company evolve during this time, what would be its turning moments and which have been the most successful products?

state-owned company. The first studies on forestry machines were made in 1968 and the first skidders were built a year later. Thus arose some models whose DNA we can also find in recent IRUM products such as TAF 650 or TAF 657M. IRUM becomes a fully private owned company in 1999 with MAVIPROD as its main shareholder and a focus on forestry. At the time of privatization in 1999, the Romanian state was the majority shareholder with 51.4% of the shares, the remaining shares being held by SIF Transilvania and various individuals. In 2010, based on some market research, IRUM started a collaboration with the agricultural tractors producer Belarus Tractor – a cooperation which resulted in an assembly line of agricultural tractors. In 2011, IRUM‘s next step was to upgrade its products by launching the TAF 2010M skidder.

What prompted you to invest in IRUM?

The company MAVIPROD was founded in 1993, having the sale of parts and accessories for forestry and agricultural machinery as main activity. In 1998, it was observed a growing demand for this type of equipment which is why MAVIPROD decided to purchase IRUM who was already manufacturing skidders at Reghin.

Only about a year after MAVIPROD acquired IRUM, you launched the first agricultural machinery. How was the decision made? Weren’t you afraid of strong competition coming from powerful companies from both West and East?

The first IRUM agricultural machinery came out in 2010 as a necessity, responding to the market needs, given that it was no longer manufactured locally. We were’t afraid of competition, because we relied on creating a 100% Romanian product.IRUM-tractors

What types of agricultural machinery do you produce and who are the main customers?

Five types of agricultural tractors, having between 80 and 110 hp, are assembled at IRUM. Among our clients are large private farms or farmers and family associations, city halls, companies with specific agricultural activity. The main activity is, however, the production of equipment for forestry; in 2012, you have released a new model: TAF-2012. How long it takes to design such a machine and for how long it remains in production (car models, for example, remain in production for a 7 years average period)? The TAF 2012, equipped with a two bobbin winch, is mainly used in logging operations, to collect the lumber resulting from main or secondary harvesting. This process involves transporting the logs from the cutting site to a landing. The first stages of transportation involve undeveloped routes after which more developed routes are used. The operation of timber collecting generally has two phases. First, each log is moved from the stump to the roadside, where it is collected and then transported to a platform near a permanent transport installation. On short distance, the skidder can also be used in the construction of forestry cable transportation installations. It also has log handling abilities and its grading bucket can be used in routes clearance. The TAF 2012 is equipped with the latest Perkins engine and it is the only equipment in this category in operation in Romania to comply with Stage III B requirements established by Directive 2000/25 / EC of the European Parliament and of the Council on measures to be taken against the emission of gaseous and particulate pollutants from engines for agricultural or forestry tractors. The 82 kw Perkins engine, the ROPS, FOPS, and OPS certified cabin, the Sauer Danfoss power steering system, the 4×4 transmission, the big aspect ratio of the tires, the locking dif ferential and the axles with multi-disc oil bath brakes are a few of the components that make TAF 2012 a powerful, reliable and efficient skidder. It has a high ability for crossing obstacles, low fuel consumption and friendly user and environment. Compared to similar machines in operation in Romania the main advantage of the TAF 2012 is the higher performance / price ratio.IRUM-buldo

What do you have in mind when designing a new product?

Designing a new product takes into account a number of factors that are interdependent:

  1. Customer requirements. The rapid evolution of society, driven by strong competition and the increasing globalization, produce a change in buyers’ options. They are increasingly opting for products that meet their needs, while keeping the expenses as low as possible.
  2. Environmental requirements. The market penetration of advanced products – in our case, Perkins engine – with superior performances, low fuel consumption and in compliance with the environmental requirements causes considerable leaps in terms of quality.
  3. Our own resources which can influence market developments. An innovative product with improved features, that provide services or additional features to the consumer, may influence purchase intention. For example, while developing TAF 2012, we have created elements with a high degree of novelty, subject to three patent applications filed with OSIM.IRUM1

How many parts that are used to build an equipment are IRUM products and how many come from different suppliers?

Approximately 60% of the parts are produced by IRUM, the remaining 40% coming from different suppliers.

Of those coming from suppliers, how many are produced in Romania and how many abroad?

In the case of TAF 2012, all parts that are not IRUM products are imported.

How do you decide what parts to produce and what to import?

It depends on our own technical capabilities and the production costs involved.IRUM-system

How many parts create a TAF-2012 skidder?

7.000.

How much machinery do you produce annually?

250 skidders and 500 agricultural tractors.

How many of them do you export and how many are sold in Romania?

As a result of the launch of the new generation of TAF’s, the company has won distribution agreements in several European countries. Currently, the share of exports reached 20% of turnover and the most interesting markets for IRUM are Hungary, Ukraine, Serbia, Poland, Croatia, Austria and Germany.IRUM2

With these machines, how important it is the aesthetic design compared to the utility? Can we say that form follows function? How important is the appearance of a tractor?

Both are important. In planning and designing of our machines we apply the so-called industrial design. This is significantly intersecting with engineering and focuses mainly on functionality. So, we use both the artistic and scientific sides to improve the aesthetics, ergonomics, functionality and use of a product. Such an approach makes marketing – and even the production – easier. The ultimate goal is to find and provide solutions to problems of form, usability, ergonomics, marketing, sales and help brand development. The final design is a homogeneous mixture between form and function, without compromise. A pragmatic sense would say that the function prevails in such domain, but the form must also determine some changes in the technological process, taking into account ergonomics, aesthetics, marketing etc. Otherwise, we would not create trends and technology would seize to evolve.IRUM-Machinery

What do you take into account when considering user comfort? How much time an operator spends in such a machine daily?

The technical developments in forestry industry eased in many respects the jobs of those working in the field. The amount of hard and stressful activities decreased considerably, but while the job of the ground operator moved in the cabin of a machine, other problems appeared, especially musculoskeletal disorders. Timber processing (cutting – binding – transport) requires the operator to use on average of 24 functions and simultaneously take up to 12 decisions for 10-14 hours a day. This process can be compared to the working conditions of an airline pilot. The technological developments laid a greater responsibility for the operator, and working conditions put pressure on the operator, both mentally and physically. We, at IRUM, are consistently creating different prototypes, whose performance enable continuous improvement of production models. We allocate part of our resources on cognitive requirements and on the interaction between man and machine. This is a relatively new field at global level also and there is still potential for improvement in many respects. Well-designed interfaces, such as adequate facilities placed in the space provided for the operator (cabin, controls, protective structure) can increase productivity, comfort and safety in operation. The operators of skidders are subject to substantial pressure, due to body position and the working environment (leading to back, neck and legs pain, vision and hearing problems, etc.) which is largely due to the mismatch between the size of the cabin – or controls positioning – and the physical dimensions of the operators (height, weight, reaching distance, etc.). We want to eliminate these problems and create the best skidder possible in terms of ergonomics and technology, capable of reducing mental and physical stress, thus increasing productivity. Also, particular attention was paid to creating safer conditions for operation.

Is there a network of IRUM dealers?

We sale our products through both our own distribution points across the country and dealers.

What was the turnover in 2013? How about the net profit? What are your expectations for 2014?

The company had a €13 million turnover in 2013 and for 2014 we are expecting an 15% increase.

How does the revenue split between the different machinery categories you produce? How much do the service sector – foundry, metalworking, manufacturing and heat treatments – contribute to turnover?

The main activity is the production of tractors and skidders and all the service sector represents 20% of turnover.IRUM-machine

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