Business
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BSH Hišni Aparati factory in Nazarje celebrates 40 years of production in 2010
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Almost six million small household appliances are produced in Slovenia and sold all over the world.
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The new coffee machine is a highly complex product that is made up of 450 parts
Interview: Rudolf Klötscher, BSH Hišni Aparati
Sustainability is the key to success
05.02.2010
Last year was undoubtedly one of the most difficult years companies have faced in modern times with many titans perishing. This wasn’t the case BSH Hišni Aparati, a subsidiary of the international Bosch Siemens Home Appliances Group. In fact, this company, located in Slovenia and responsible for nine countries in the Adriatic East region – including all countries of the former Yugoslavia as well as Albania and Bulgaria – managed to achieve a 6% increase in turnover in 2009. This is reason enough to talk to company CEO, Rudolf Klötscher.
What is, in your opinion, the reason behind the success of BSH Hišni Aparati?
I guess one of the main reasons is our corporate strategy which is based on sustainability. Sustainability is connected to different parts – people, products and the company as a whole. If a company, for instance, has a change in management every one or two years, or a high employee turnover, it would be hard to follow a long-term strategy. Within our group, there are no dramatic changes in this field and – because of this sustainability in management and employees – BSH is also investing in the profits of the people in the future.
This becomes obvious when you look at what we have done in the last ten years. Only last year we introduced an energy-saving tumble dryer that is in a class of its own (A-50). We also produce washing machines and dishwashers that use between 55%-70% less water and less energy. This wasn’t done overnight; our group has been working on it for 10 to 15 years. This is what I mean by sustainability. For these efforts, the BSH group received the Sustainability Award in 2009.
With such a strong global presence, were you affected much by the recession?
Recession – that bad word of 2009 that started in the fourth quarter of 2008. Of course, the BSH group was affected, because we have a strong presence in the UK and Spain: countries badly hit by the economic downturn. But luckily we didn’t feel these huge and dramatic changes more than any other sectors. You might say the business of household appliances is not a ‘’sexy’’ business – like working for Apple where you can develop some fancy gadgets – but it is a stable, continuously growing business. When there is an economic downturn, it is the household appliances that the trade and end-users look to in order to make money. Prices for mobile phones fell by 30% or 40%, but prices for washing machines, ovens, or fridges are giving the trade a sustainable profit.
What would be the strongest growth area for BSH Hišni Aparati in regional terms?
The most growth for us was in Croatia. But even more important is the fact that in Slovenia, Croatia and Serbia, we also grew in 2009, compared to 2008, which in itself was an excellent year. We were again able to increase market shares in all countries, despite the fact that all the markets were shrinking dramatically. In addition, we employed 90 new people in 2009 – 20 of them in research and development – and we are planning to employ an additional 20 experts in technical fields for new projects.
Many complaints are heard from foreign companies, as well as local ones, that the costs for businesses are too high in Slovenia. Do you agree?
Our production site Nazarje in Slovenia has been in operation since 1970. So this year, we are celebrating 40 years of the factory. Due to successful collaboration, this factory was taken over by the BSH group in 1993 and since then it has been an important part of the BSH group, not only for production, but also for research & development. So, Slovenia for us is an important location for the reasons mentioned but also for sales and marketing. That said, the cost topic is making me nervous because Slovenia is no longer a low-cost country for production sites. The government has to be careful in finding solutions for the recession. If you just increase taxes, we have to pay for products. And if people are not able to pay an upgrade price for products because production costs are higher, then it is obvious what companies will do in such situation. It is understandable the government needs to find money to pay for the handling of the increase in unemployment, but raising taxes for fuel and, probably energy is not smart in my opinion because it is just a “quick fix”, not a long-term strategy.
So what are the advantages of having a company in Slovenia?
Obviously, there are a number of advantages; otherwise we wouldn’t be here for such a long time. We call it “the 4 Q’s”: the quality of workforce, the quality of infrastructure, the quality in the regional location and connection to the ex-Yugoslav and eastern Europe markets; and, of course, the quality of life. Finally, it is important to add the economical and political stability.
Would you single out a product from BSH that you would say is the best at the moment?
One of the reasons you start working in this field, like I did, is that you have to love all these products, whether it’s a major domestic appliance or a small household appliance. I, personally, am really proud of the new full automatic espresso machine, developed and produced here in Nazarje, which is a highly complex product, made up of 450 parts. This is one of the most complex appliances we have in the entire Bosch Siemens Home Appliances group. And it is important to emphasise that this amazing product is, like nearly six million small household appliances, produced right here in Nazarje and sold all over the world. The reason I emphasise this is because many people don’t know that, and they probably think the production is done somewhere in Asia.
Nazarje has a reputation for filing many new patents. Does this represent small patents to the existing products or entirely new patents?
They are patents for new products. Just in the new coffee machine, we have many new patents. This also shows the highly innovative and creative atmosphere we have at BSH in Slovenia; when you have that, you will attract the best engineers and the results are excellent.
How closely do you work with Slovenian universities in employing your workforce?
We work with the university in Maribor on the technical side and we also support some student theses. However, there is weak communication between the university and top management. In Germany, for example, where I give lectures at a university, it is a norm to invite people from corporations to participate in courses. This is not the case in Slovenia. I believe it would be very interesting and beneficial for students to get some first-hand information of practice from such multinational corporations, to add to the theory taught at the university.
So, do the students from engineering courses come to BSH for work experience?
They do, but they call us directly, it is not organised by universities. For example, last year, we had requests from German universities for their students to visit the factory here, but we had no requests from Slovenian universities. And we are definitely interested in working more closely with universities here – not just from the technical side but the commercial side, too.