Sheet metal from the Balkans
What do Marjan Volpe in Slovenia, Goran Sutalo in Croatia, and Angel Jelev in Bulgaria have in common? They work sheet metal in the Balkans. And they boast three success stories.
If you were to draw a line on the map from Trieste in northeastern Italy to the so-called Pearl of the Black Sea — the Ukrainian port of Odessa, everything south of that line would be on the Balkan Peninsula. From the geographic point of view, this appears to be a homogenous region on a peninsula between the Mediterranean and the Black Sea. However, it is Europe’s most diversified region in economic and political terms. This “Balkan line” even crosses through the Republic of Slovenia.
High-tech from Slovenia
This tiny country, nestled between Austria, Italy and Croatia, never felt itself to be part of the Balkans, and so quickly oriented itself on the West once Yugoslavia had fallen apart. “Suddenly the domestic market shrank from 22 to 2 million consumers. That required considerable adjustment,” Marjan Volpe recalls. In 1993, two years after Slovenia gained its independence, this mechanical engineer, now 45 years old, set up the SIP Sico company initially as a subsidiary of SIP, which manufactures agricultural equipment.
SIP Sico started out with a staff of 25, manufacturing outsourced sheet metal parts for mowers, turners and manure spreaders. In the thriving economy prevailing in Slovenia in the 1990s, the company quickly became a flourishing sheet metal job shop with an international customer list. Marjan Volpe also profited from good infrastructure links to metal industry firms in the surrounding regions of Croatia, Udine (Italy) and metropolitan Graz (Austria).
“Since our cost levels are higher than those of our Balkan neighbors, we soon realized that we had to place our faith in quality, technical expertise, and the delivery of semi-finished products,” Sico general manager Volpe explains. “These are goals we could satisfy only with the very best machinery.” That was why, in 2000, Marjan Volpe invested in the first laser cutting machine from TRUMPF. Since then he has consistently expanded his equipment by adding models from Ditzingen.
The firm has become Slovenia’s leading contractor for laser cutting and sheet metal forming. In 1999, following years of growth between 10 and 50 percent, the business was forced to realign because of the crisis. Marjan Volpe’s recipe for success was for the company to develop its own products. Today Sico manufactures not only lift platforms and electric fuelling stations, but wood splitters for the European market, as well. In Germany these are marketed under the “Robust” brand name.
Marjan Volpe also sees an important growth market in electromobility. His targets are ambitious: His staff numbers 70 today, but is expected to grow to between 150 and 200 in the next five years. It is with new products, and especially those associated with green technologies, that Volpe intends to grow beyond the boundaries of the EU and enter world markets.
Wood burning fireplaces from Croatia
It was his export orientation that transformed Croatian Goran Sutalo of Color Emajl from a simple artisan to a manager several times recognized for his entrepreneurial achievements. The story started more than thirty years ago, in the Croatian region of Yugoslavia, at the north-eastern edge of the Balkans.
Initially the company was a small producer of spare parts for washing machines; now it has grown to become one of the largest European manufacturers of fireplaces and flue pipes. This resourceful businessman was able to negotiate the challenges of a planned economy and survive the hyperinflation of the early 1990s. During that period he even reverted to barter, since longer delivery times had made price agreements and the actual payments quite simply a matter of luck.
“In 1996, following economic and political stabilization, we launched the production of our wood-burning fireplaces,” Sutalo reports. This self-made man boils his recipe for success down to a single word: “Quality. To achieve this, every year we invest all our profits in new technologies and modern equipment.” The fact that he takes quality seriously is demonstrated not only by the firm’s certification as per ISO 9001, but also by a quick look in the shop. Along with the company’s colors of yellow and gray, blue is dominant among the machinery.
Two TRUMPF laser cutting machines, with a third just being installed, three press brakes and guillotine shears are all in service here. “These machines let us generate the quality our customers expect of us.” Each year Color Emajl turns more than 2,500 tons of sheet metal into 17,000 fireplaces. Goran Sutalo notes: “98 percent of our production is exported to foreign countries inside Europe, the majority to the EU countries. That’s one reason why we are hoping for significant growth stimulus from Croatia’s joining the EU next year.”
At present Color Emajl employs some 325 skilled workers and Sutalo feels that he has found a good location in Požega, in the region of Slavonia. “There is a vocational training center here in the region. Combined with our in-house training program, we have access to qualified employees who we need for growth.”
Outsourcing to Bulgaria
Skilled sheet metal workers are held in high regard in Slovenia and Croatia. The situation is much the same and just as favorable in Bulgaria. The land in the middle of the Balkans looks back on a long tradition of metalworking and, in an international comparison, achieves a high standard in training. A special benefit is that wage levels are considerably below those in Slovenia and Croatia.
What’s more, the country joined the European Union in 2007 and the national currency, the lev, is equal to the euro. As a result, the country’s largest job shops, about twenty in number, can offer good conditions to their growing throng of foreign customers. “Bulgaria is increasingly establishing itself as an attractive site for outsourcing inside Europe,” confirms Angel Jelev. In the same year that his home country joined the EU, he and a partner founded the 3A Steel metalworking shop.
“From the very outset we intended to build operations complying with the highest standards and to establish ourselves as a contractor to foreign enterprises. To deliver top quality at all times, we of course needed the right machinery,” Jelev reports. This engineer, now 40 years of age, found exactly what he was looking for at TRUMPF. This was an approach that paid off. Today exports account for almost 90 percent of sales at 3A Steel. Jelev generates the remaining revenues with Bulgarian companies’ orders for laser cutting and by producing commercial kitchen equipment.
In spite of the financial and banking crisis in Europe, prospects are good. This is true both for the country of Bulgaria and for Angel Jelev. Recently the Handelsblatt business daily newspaper crowned Bulgaria’s stabilization course with the title, “Europe’s Champion in Savings”. “But quite to the contrary, we are actually champions in investments,” chuckles the general manager at 3A Steel. Since his employees already work three shifts producing housing components, molds for concrete blocks, and parts for the railroad industry, he is planning to purchase a second laser cutting machine next year. In order to be able to use this machine even more efficiently, this unit is to be located in a new hall together with a press brake and guillotine shears. In Bulgaria, too, the course is set for growth.
Contact us: MastersofSheetMetal@trumpf.com
This article was first published in autumn 2012.