Interview with Miroslava Mikulova, Sales and Finance Manager at VIPO
OT: History of the company (product/service) and its milestones in brief.
MM: VIPO was founded in 1974 as a research and development organization called URKOP Institute of Leather and Footwear Industry Rationalization. In 2024, we celebrated our 50th anniversary. During these 50 years, the company has of course undergone great changes, although research and development, creativity, and the modernization of technical solutions still form its basis today.
If I have to mention a few milestones in the company’s history, they are:
1992 – transformation into a joint stock company called VIPO within the framework of coupon privatisation. The company became part of the property portfolio of the owners of Matador, the Rosin family, which is still our main shareholder.
1998 – production and start-up of the 1st line for the production of bead ropes for the tyre industry, which has become our main target market. The people in Matador Púchov then put their trust in the engineers and designers from Partizánske and they did not disappoint them.
1999 – 1st line exported abroad, to Continental Germany.
Today VIPO has 3 divisions. Machinery and Electronics, with the largest share of the company’s sales, followed by the Chemistry Division and the Testing Division.
In the area of machinery manufacturing, VIPO is firmly established in the international market of machinery for the production of semi-finished products for the tyre industry in the rope-core section, i.e. the part of the tyre that is load-bearing in terms of its construction. We can proudly state that we have manufactured and supplied over 100 lines all over the world and today every 10th tyre manufactured in the world contains our bead rope. In spite of our “worldliness”, VIPO is a Slovak company with predominantly Slovak shareholders and Slovak management. We employ over 120 employees who have the opportunity to benefit from a superior collective agreement and know that when they get into a difficult economic or other life situation, the company’s management can stand up for them and lend a helping hand.
Q: What proportion of total sales is made up of export activities (has it grown in recent years)?
MM: In terms of structure, our only customer in the tyre business in Slovakia is Continental Tires Slovakia (formerly Matador), Púchov. More than 90% of our production goes outside the Slovak Republic. Thus, the absolute majority of our customers are abroad, as well as our competitors are outside our territory. In Slovakia we are the only manufacturer of highly specialised lines and machinery for rope and core in tyre production. Since 1999, when we delivered the 1st line to Continental in Germany, our lines have been working in all continents of the world except Australia and Antarctica. Our customers are the top 5 tyre manufacturers in the world.
I want to mention such companies as Continental, Goodyear, Bridgestone, Yokohama, Nexen, Pirelli, Indian companies Apollo, J.K.Tyre, MRF, CEAT, Algerian Saterex, Ukrainian Rosava, Kazakh Tengri Tyres and many other major global players in the world of tyres.
I would stop at Tengri Tyres, Saran, Kazakhstan, because working with them is one of our largest equipment supply projects, worth more than EUR 7.5 million. A new plant has been built in Saran to produce 3 million passenger and 0.5 million light truck tyres. Production started last year and the plant is equipped with modern equipment from suppliers all over the world. Despite the initial difficulties in getting the project off the ground, building the plant, bringing in all the necessary power networks, it has been and is a great experience for both the suppliers and Tengri Tyres itself. The equipment purchases were financed with the support of the Industrial Development Fund of Kazakhstan. Tengri Tyres already has plans to build one more such plant in Kazakhstan.
For myself as a trader and financier, I can say that this project has been another excellent school for me in contract negotiations as well as in working with financial instruments such as letters of credit and bank guarantees. The 10-page letter of credit with the incorporation of the terms agreed in the contract was a real eye opener even for our experienced bankers. Thanks to our many years of experience in international financial trade, which we were able to capitalize on in this area, this was a successful project for our company despite project delays on the buyer’s side.
Q: What is your business strategy and is it different in domestic and international markets?
MM: Our core business strategy is long-term customer satisfaction with our equipment. A rule proven by our experience is that only a satisfied customer will return. Fulfilling this strategy and working with the customer starts with us when forming a quotation for the equipment based on the customer’s technical specification. Each line is more or less a unique device with solutions “tailored” to the customer’s requirements. At the same time, our sales and design engineers have to keep an eye on the direction of the tyre market and the competition so that we are ready to compete in the complex tenders that are now an absolute part of every bidding process.
A successful tender is followed by contract negotiations. Without a balanced contract that monitors and protects the interests of both parties, the seller and the buyer, problems may arise in the future when large machinery worth several million euros is implemented. An important role is also played by the correct financial set-up of the project, i.e. working with financial instruments such as letters of credit, bank guarantees, buyers credits.
After signing the contract, the preparation of production documentation of mechanical and electrical equipment, preparation of line software begins. The longest phase is production and assembly of the line. This is followed by testing of the equipment by us, customer inspection before shipment, shipment, assembly, setup and commissioning at the customer’s site. and follow-up care of the customer and the delivered line. This process, from the beginning until the signing of the acceptance report, usually takes more than a year.
But our interest in the customer does not end there. We also communicate with the customer, warranty, post-warranty service, spare parts supply. Our customers know that in case of operational problems, which are usually caused by various factors ranging from technical, technological and human, our technicians will help to resolve the situation.
Obviously different region, different morals and mentality. In different markets we encounter different approaches, practices, solutions. When communicating with a customer, it is always important to listen to what is important to the customer, what is important to them, what they put emphasis on. There are differences depending on the territory, i.e. the mentality and customs of a given nation, but also depending on its corporate culture. Our proven strategy is to have sales representatives in culturally very different territories. They know the customs, the mentality, the logic of thinking in that territory, that makes them very important for us. Sales is not just about numbers and technical parameters, but also about the psychology of working with customer needs and expectations. These are the aspects that are important to work with, because a good and successful deal can only be considered as one that both parties, the seller and the buyer, are satisfied with.
Q: How do you assess the competition in international markets and how does your company differentiate itself from it?
MM: Competition is part of the functioning of every large and small company, even a small entrepreneur or sole trader. It is important to know it, but it is also important to be inspired by it. Our competitors are companies in the USA, the Netherlands, Germany, Taiwan and China. We meet them in international tenders. Our philosophy is to be a serious partner to our customers and to be serious to other “team players” on the tire machine field.
Q: How have your export activities changed in recent years, especially in light of economic and geopolitical challenges?
MM: A big advantage of our company is territorial diversification. Each territory has its own economic cycle. At any given time, different markets are at different stages of their economic and therefore investment cycle, so there are years when companies are buying in India, there have been years of investment boom in Belarus, Russia. Today, there is increasing production, for example, in the US, South America or Asia. From Central Asia, I am currently preparing bids for 10 of our machines for Birinchi Rezinotechnika, Uzbekistan, as well as for 2 machines for Tengri Tyres, Kazakhstan. The economic and political situation is changing in different countries around the world, and it is important to monitor this and respond accordingly.
Q: Do you use any government support programs for exporters?
MM: VIPO actively tries to use available programs to support development or export. I will mention, for example, programs through the Ministry of Education, the Ministry of Economy, Norwegian funds, or the SARIO agency. We consider this to be the right active and targeted assistance provided to business in Slovakia, especially because of the objectively more difficult conditions compared to our foreign, mainly non-European competitors.
Q: What would you recommend to Slovak entrepreneurs who are just about to expand abroad?
MM: In any business that is meant to make broader sense, the DREAM, or in economic terminology, the GOAL, is important. This is the foundation, but without pragmatic fulfillment it may remain unfulfilled. In our experience, the essentials for working in international markets are – a quality product, knowledge of the market, i.e. the target groups for which the product is intended, knowledge of the competition, knowledge of territorial specifics and last but not least a quality team of people who believe in what they are doing and at the same time are willing to learn and not stand still. This is by no means easy, but it is not impossible.
Thank you for an information-rich interview.
Photo source: Eximbanka (Lukáš Klčo)