A Cleaner Environment for the Next Generation, Automation and Ever-Increasing Workplace Safety. This
BUSINESS INTERVIEW
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You mentioned the employees in
your company. How do you maintain
a positive company culture so that
the people you employ want to work
here, feel comfortable here, and possibly
bring someone else with them?
In addition to traditional recruitment
through agencies and job sites, we also
have a referral programme for employees
who bring someone new on board - if that
person proves themselves and works out,
we give them a financial reward. Often
employees bring their relatives to the
company, we have "family clans", where
two or three generations work here.
Then, of course, there are the benefits we
offer. We have standard benefits, such as
5 extra vacation days. We also provide
convalescent stays, vitamin packages,
a Christmas bonus, a holiday bonus, and
we pay for summer and winter camps for
children. In the event that the planned
profit is met or exceeded, our employees
get a share of the profit. As in many
companies, we raise wages every year
after consultation with the trade union.
Transparent communication with employees
is essential for us. At least twice a year, we
hold large meetings with all employees,
where we explain the market situation, what
we are expecting, what the results are, etc.
People can raise any questions they have.
This kind of communication has worked
well for us, because if people don't get
the information, they make it up. But when
they get it, they accept it and understand it.
Some people underestimate the staff, they
think people won't understand. I always say
people will understand, they just have to be
given enough information. The difference
between a director and the manual worker
is that the worker hasn't become a director
yet, but maybe one day he will. If you look in
the room, there are at least two CEOs sitting
there who will one day replace us.
You mentioned that there are a number
of obstacles on the market, for example,
the complex situation with the energy
sector, the transition to hydrogen, etc. In
addition, there is quite strong competition
in the steel industry. Where do you
see your main competitive advantages
compared to other companies?
We offer basically two main steel products.
The first is electrical, or transformer, steel,
which is produced by only about twenty
companies in the world, two of which are
in Europe. In total, 1.7 billion tonnes of steel
are produced annually, of which about
3 million is electrical steel. The biggest
competition in this sector is in China,
which today produces over 60% of the
world's electrical steel. We are a relatively
small producer, producing about 50 000
tonnes of steel a year. So our advantage is
flexibility and the fact that we can always
find a gap in the market for our application.
Of course, we are also looking for new
markets. Fortunately for us, this segment
is constantly developing. As electricity
consumption increases and will continue
to increase, the demand for transformer
steel is increasing as well. The transition
of the steel industry to green steel in the
Czech Republic will mean that twenty
terawatt hours of electricity will be missing,
which is a quarter of the Czech Republic's
production. And we are talking only about
the steel industry now. So far, this electrical
engineering segment has been growing
at 2-3% a year for a long time, but we are
expecting growth of up to 10% a year.
Our second product is carbon steel, i.e. cold
rolled sheets and strips. The competition
there is really fierce and Europe is currently
experiencing a huge crisis. Production and
consumption are falling in this segment, and
at the same time there is competition from
Asia, which is now supplying steel much
more cheaply. This is mainly due to the fact
that they have ten times cheaper gas, which
gives them a huge competitive advantage.
In Europe, electricity and gas are very
expensive. The price is falling, but this is also
happening in America and Asia at the same
time. Europe is unable to compete with these
cheap imports. There are import quotas that
Europe uses to protect itself, but they are not
exhausted because consumption is low. So
if someone wants cheaper steel and is not
in a hurry, they order it from Korea or China.
So this segment is under a lot of competitive
pressure today, and steel mills are fighting it
by shutting down their technology. All the
big producers, such as Liberty, Dunaferr,
ArcelorMittal or U.S.S. Košice, are cutting
production and thus reducing their fixed
costs. But this is normal because it is
a cyclical process - we were up, now we
are going down, but we will go up again
one day. The current crisis may be longer,
because it is influenced by geopolitical
influences - first it was covid, now it is the
war in Ukraine. Covid has been resolved,
but until the conflict in Ukraine is resolved
as well, it is impossible to predict how it will
all play out, when we get back to normal and
what actually is the 'normal'.
This year, your company celebrates its
190
th
anniversary. Of course, production
and processes have changed a lot in
that time. How are you going to take
advantage of new technologies in the
future and how will you innovate to
optimise production and all processes to
remain competitive?
Our company was founded in 1833 as
Karlova Hut'. This was the beginning of
the Industrial Revolution, the period of
steam made from charcoal and later from
stone coal. We processed iron, which was
produced in blast furnaces in Baška. We
used the power of water to power the forging
hammers and furnaces. And then came
the period of electricity and we developed
further. We have been reducing our energy
consumption for a long time. Today, we use
the secondary energy generated during
our production processes and we process
up to 90% of our waste into material that
is sold or used. In addition, of course,
the automation of operations is the most
important factor in increasing efficiency. It
is at a really high level, today it is replacing
even the so-called "knack", the human
skill. What man used to know is now in the
programmes of the control machines. Many
of the processes that used to be carried out
and supervised by humans are now done
by automatons and robots. And it is not
just large machines, but also ordinary hand
tools. For example, a gearbox change used
to be done by a group of six maintenance
workers and they were working very hard at
it. Nowadays, two people can do it two or
three times faster with electric and hydraulic
battery powered tools. Advances in this area
are increasing productivity and reducing
heavy human labour. For comparison, in
1990 we had 6 500 employees and today
we have 435. There's less and less human
labour and the work is getting safer at the
same time. We used to have people leaving,
for example, for occupational illness, but
that no longer happens today. That is why
it is important to replace these tasks with
technology. That is our goal.
Mr. Chmelík, thank you for the interview.
“
If employees recommend
a person who proves himself,
we give them a nancial
reward. They mostly bring
their relaves to our company.
Oen two or three
generaons work here.
”
Text: Barbora Kubalová
Foto: Kateřina Skupieňová