Article by the Chairman Mr. Athanasios Papapanagiotou

In Dromeas’ outward-looking approach, as the official supplier of furniture to the European Commission, regarding the differences between domestic tendering procedures for project acquisition compared to those abroad, as well as the challenges posed to businesses by the operation of the banking sector in Greece, refers the President of DROMEAS ABEEA, Mr. Athanasios Papapanagiotou.

-For 15 consecutive years, Dromeas has been the official supplier of office furniture to the European Commission. Additionally, over the last decade, you have won consecutive contracts with the German Army, supplying hundreds of thousands of pieces of furniture. What factors contributed to this great success?

During the onset of the financial crisis in our country in 2008, when the domestic office furniture market collapsed, our company had just completed investments to improve its production capacity, amounting to 40 million euros. As you can imagine, this could have been a death blow to our company. However, by leveraging precisely these capabilities and flexibilities provided by our investments, we managed to win the European Commission tender in 2009 valued at 25 million euros for 4 years. The combination of a detailed approach to their needs, the quality of materials, the certifications we achieved for our products, and the competitive prices we could offer, constituted the recipe for our success in that specific tender.

This first tender represents a milestone in our history as well as an important “school,” as it was the moment we looked more strongly outward, and also gained the experience and organization to pursue similarly sized projects in the future.

From that tender onwards, we had the advantage of being recognized as major producers in the international environment; we were not an unknown choice for them, and even more importantly, we successfully completed the project.

In the subsequent European Commission tenders that we won (in 2015 and 2020, totaling over 50 million euros), the positive experience of working with the Commission over these years also tipped the scale in our favor. Thus, we have been supplying office furniture to the European Commission exclusively from 2009 to the present and will continue at least until the end of 2025.

A similar situation occurred with the German Army. Once they knew us and trusted us, each subsequent tender became a bit easier to win. Of course, the issue is that the rest of the market also knows you, and your competitors know what to expect from you, so for each new tender, you must strive to differentiate yourself to maintain the element of surprise.

I should note here that the German Army tenders we have won from 2013 until today amount to 71.5 million euros, covering approximately 500,000 units.

The significant point for our company is that the open remaining projects for the European Commission and the German Army are around 50 million euros, with a completion horizon over the next 2 years.

-In recent years, your company has also won several tenders in Greece with major organizations (Piraeus Bank, PPC, OTE, etc.). Are there differences between domestic tendering procedures and those conducted by European entities?

Unfortunately, there are differences, and they are negative. Despite the fact that, as you mentioned, our company wins several major tenders in Greece—which should be perfectly normal since we remain the only manufacturer of professional furniture in our country—you would be surprised to learn how many significant projects we have lost for at least suspicious reasons.

Unfortunately, many tendering procedures, especially public ones in Greece, completely lack the certifications required by European regulations. This allows commercial companies to offer products of questionable origin with no specifications or quality certifications. They do not (or do not want to) understand that such practices are against the public interest, despite many letters we have sent over time explaining this exactly. That is, they may purchase something cheaper, which, however, over a 5-year period will need multiple replacements or repairs, resulting in employees not receiving the necessary comfort and safety they deserve, increasing their environmental footprint, and ultimately paying far more for the product than a certified product would cost, which would provide safety and durability during use.

Furthermore, the practice of “under-the-table” agreements between procurement officials and suppliers, to favor their agreed offers by inventing reasons to reject more suitable bids, is quite widespread. These are chronic pathologies of the Greek system that hold us back compared to Europe, with responsible ministers often remaining indifferent.

-As an active entrepreneur, what are, from your experience, some obstacles in the country regarding business development? As far as I know, energy issues have particularly concerned you in recent years.

What you say is true. In our country, the main source of electricity generation is gas, which, however, is continuously decreasing while renewable energy sources (wind and solar) are increasing.

Investments in wind farms are high-cost with corresponding returns but are limited to a few investors, who in our country are 5-6 and have evolved into electricity providers with overlapping investments to ensure a stable flow.

The strengthening of these providers has “managed” to convince licensing authorities (HEDNO/DEDDIE) not to authorize production from solar parks for 6-7 years, losing free solar energy worth tens of billions.

The refusal of DEDDIE to issue new licenses for the creation of solar parks ensured that providers would not lose the energy that would have been produced by the solar parks for self-consumption under the NET METERING law.

The excuse given by DEDDIE is that the electricity transmission network is saturated. The reality is that transformers are missing, which should have been installed by DEDDIE. In the case of wind farm production, providers incorporate the transformer costs into the high investment cost with DEDDIE’s approval.

Investments in solar parks are much lower-cost than investments in wind farms and cannot absorb the cost of transformer installation within the investment.

Given these conditions, electricity production from renewables has been limited exclusively to the six providers, preventing production through solar parks due to DEDDIE’s refusal to authorize. The losses to the country’s economy amount to 5-6 billion euros per year, in addition to obstructing the application of the NET METERING law, which disadvantages thousands of businesses while increasing the profits of the providers. This oligopolistic regime must change, as it borders on national underbidding!!!

-How do you assess the banking system in Greece? Do you think it contributes to investment development in our country? Do you face obstacles that create barriers for you?

In our country, banks set lending interest rates unchecked, resulting in rates more than double those in Central European countries. With the rise of EURIBOR, they add the entire rate to the existing SPREAD, causing already high interest rates to more than double.

The determination of the EURIBOR rate by the European Central Bank to counter inflation does not mean that the entire rate must be added to the existing SPREAD, nor is it mandatory.

Unfortunately, in our country, banks pass this on and add the entire rate to the existing SPREAD. This renders business development uncompetitive and, by extension, affects the country’s growth.

The Federation of Industries of Northern Greece (ΣΒΕ) should also request from the government that SPREAD and EURIBOR rates be limited to levels equivalent to those of EU member states. Excessive enrichment of banks alone does not contribute to the country’s developmental trajectory.