Castrum Ferreum Kft. (Hungary)

CASTRUM FERREUM Technical Service and Trading Ltd. was established in October 1990 as a sole proprietorship during the economic reform year. The company was named after the Roman name of Vasvár, as the owner of the business was from Vasvár. Initially, the company planned to operate as an engineering office, providing technical design and consulting services. However, due to the prevailing "shortage economy" in Hungary at the time, the company seized the opportunity to engage in office supplies trade. The company contacted a wholesale office supplies company in Vienna and imported office supplies in large quantities for domestic wholesale companies. However, due to a lack of equipment, there were often delays in receiving the imported shipments until the previous deliveries were paid by the domestic wholesale companies. As a result, the operation of the business was intermittent due to a lack of capital. During this time, the Mineral Trading Company (ÁFOR) and the predecessor of the Hungarian Oil and Gas Industry Public Limited Company (MOL Nyr.) announced the sale of a part of their fuel network. Since the cash flow in the fuel trade was faster than in the office supplies trade, the company purchased three fuel stations at an auction with bank loans. In 1991, Castrum Ferreum Zrt. became one of the first private companies in Hungary to engage in fuel trade. In the years 1996-1998, illegally operating companies gradually disappeared from the Hungarian fuel market, allowing the remaining businesses to gain significant market share. Besides MOL Nyrt., Agip Hungária Zrt., OMV Hungária Kft., and Shell Hungária Zrt. also appeared on the Hungarian fuel market. Castrum Ferreum Zrt. faced a significant strategic decision, which is still relevant today: "How can it maintain its position among domestic and international multinational companies?" The rapidly rising energy prices in the first half of the 1990s also pushed up fuel prices, requiring more working capital for the business. The profit generated from fuel trade would not have been sufficient for this purpose, so Castrum Ferreum Zrt. needed other sources as well. These sources came from bank loans and the increase in the market value of assets from other activities. Specifically, Castrum Ferreum Zrt. purchased car sales and service facilities at favorable prices. The company started its car trading activities with the Suzuki brand, coinciding with the establishment of Suzuki Zrt.'s brand trading activities in Hungary. In the best years (2002-2004), the company achieved a moderate level of sales with 300-400 new cars sold annually within the Suzuki trading network.