SLATINA, Romania (BRAIN)—Campagnolo has opened a second Romanian factory in a small town near the Bulgarian border, about 60 miles from its existing production facility in Eastern Europe.
The newest location was built from the ground up on land owned by Campagnolo. It opened in September for employee training and production began in early October. The 16,000-square-foot factory will employ about 140 workers by the end of next year when construction finishes. That’s in addition to a 70,000-square-foot factory in Pitesti, Romania, with 270 people on staff and two manufacturing plants at Campy’s headquarters in Vicenza, Italy, that employ about 180 workers, said Valentino Campagnolo, the company’s president.
“We need more space,” Campagnolo said of his decision to grow the company’s presence in Romania. “Where we are right now in Pitesti, we cannot expand any longer.”
Campagnolo opened its first Romanian factory six years ago in a leased 6,400-square-foot space. That factory has grown to a size 10 times that as Campagnolo has shifted more production to Eastern Europe to keep overhead costs at bay.
Labor costs in Romania are about three-and-a-half times less than in Italy, and are comparable to those paid to factory workers in Taiwan, Campagnolo said. That has allowed Campagnolo to offset some of its labor costs without outsourcing to a factory in Asia—potentially opening up its intellectual property to vulnerability—and in a location that’s driving distance from Italy.
Campagnolo has moved more production to Romania over the past few years as it has increased the use of carbon fiber in its wheels and components, which requires a high level of human labor. All assembly is now done in Romania. Assembly of Campagnolo’s new Electronic Power Shift drivetrain components will move east next July, Campagnolo said. Chain assembly remains in Italy because it is machine automated. The split in production across countries has little to do with the actual product or its value, but rather the amount of labor a specific part requires, Campagnolo said. Manufacturing processes are uniform in all four factories.
Campagnolo is adamant that some production will always remain in Italy. Headquarters also houses all R&D, engineering and the main test lab. Lorenzo Taxis, Campagnolo’s director of marketing, estimated that about 30 percent of parts are currently produced in Italy.