Acting Minister of Economy, Digital Transformation, Entrepreneurship and Tourism Irineu Darau announced at a press conference on Wednesday that state-owned company Romarm SA and its 15 subsidiaries would be reorganised into an integrated industrial holding in the defence sector, with a decision expected by the end of the year.
"Romarm SA must be reorganised into an industrial holding that is both modern and competitive on the private market. Leaving aside that Romarm is a state-owned company, the state cannot guarantee its business. Romarm must be a competitive company, just like any other. Yes, it is part of the national defence industry, as are many other private companies, and I have always conveyed this message to them. The days of unnecessary subsidies that prolong the ailment of Romarm and its subsidiaries are over. Romarm and its subsidiaries must become competitive," the minister said.
According to him, the company acts merely as a commercial intermediary, holding stakes of less than 20% in most of its subsidiaries.
"The Ministry holds the remaining shares, and Romarm's role is to broker contracts. If the subsidiaries fail to secure orders, that means Romarm is not doing its job very well either. Some subsidiaries even complain that Romarm's commissions make their final prices uncompetitive. We are convinced that the solution is to create an integrated industrial holding, rather than continue to have 15 separate subsidiaries. It should operate under a dual governance system, because it must not be politicised - that is, with a supervisory board and an executive board appointed - and be organised into clusters by sector, such as armaments, ships, research and so on," Darau explained.
The minister said a decision on the matter could be taken soon.
"In the coming days, we will publish a white paper outlining the options available to us. However, we insist on the urgency of this matter. We will also take it to the Supreme Council of National Defence (CSAT). We believe a decision must be taken by the end of the year so that, in the coming years, the integrated industrial holding can be established and become competitive on the private market. Otherwise, Romarm and its subsidiaries won't be able to survive much longer," the economy minister stressed.
He added that even under the company's current structure, the legislation in force is not being complied with.
"I have initiated several procedures to change this situation and bring the articles of association of Romarm and its subsidiaries in line with the law. Of course, we have faced a legal challenge, but we are moving forward with what we believe is best for the industry. I am confident that those who want to keep things in the same backward state will ultimately lose this battle - an important battle for Romania's industrial future and the future of its defence industry," Darau added.
National Company Romarm SA is Romania's main domestic producer and exporter of military equipment, weapons and ammunition and operates under the Ministry of Economy.
