ESSEL history
We can count on the fingers of one hand the companies that can boast a history of more than 100 years. This is also the story of the ESSEL brand, whose origins date back to 1921, when a small plant for the production of agricultural tools was founded in Banská Bystrica, which moved to Slovenská Ľupča about 20 years later. The first major milestone in terms of the brand and its own products was in the 1970s, when it was decided, within the framework of the then centrally planned economy, to start the development and production of hydraulic arms for timber handling in the plant, which was followed by various technologies for processing in the forest industry, such as forestry ropeways or tractor bodies. The products were intended not only for the domestic market, but also for export to countries that were friendly at the time. Subsequently, the company operated under the banner of the State Forestry Engineering Works. Another milestone in terms of product portfolio expansion was the end of the 1990s, when the company was privatised by several owners and expanded its portfolio to include towing systems, scrapers and towing platforms. Between 1995 and 2002 was a golden era when around 300 people worked in the factory and the company prospered very well.
OT: You entered the business as new investors in 2014. What was it like as new investors?
MŠ: When we took over the factory it was close to bankruptcy, with no investment and innovation and 60 people working there. Basically, you could say that it was more or less moribund, and it was languishing from year to year. When we took it over in 2014 it was without vision, plans or direction. So our starting line was not 0, but a deep minus. I liken it to a wreck at the bottom of the sea, which we took 5 years to ever bring to the surface before we started renovating. It was extremely challenging. We gradually custom-filled the company and started intensive development of our own products on the one hand, which we financed in the meantime by producing component products in the form of co-operative weldments that we produced for various foreign companies. This was the business on which we grew numerically. We invested all the resources we were earning back into the company, into the development of our own products, because we wanted to strategically build the factory on the production of our own product, honest work and building lasting value. Our ambition was to become a top player in the specialty towing market and we knew it was going to be a long road. And believe me, it is. Specialist engineering is truly a symbiosis of man and machine. And at the end of it is a beautiful product.
OT: You operate in a segment where the craft is gradually dying out. Doesn’t that make you worried?
MŠ: Of course, like other manufacturers, we also have a problem to find quality workforce. But I am not worried because I believe that having these skills and know-how, whether technological, developmental or manufacturing, is a very precious asset for the future. The production of our own products still requires high craftsmanship and cannot be fully automated. People will always be key for us.
OT: Do you also perceive that people don’t want to work in assembly lines anymore?
MS: Yes. Schools are churning out thousands of different pseudo-professions a year. But the professions that have a golden bottom today are missing out. It’s never been more true than now. Because we have a premium product, we need premium people, and they’re always going to get a premium salary because they’re doing a really good job. If you want to have a quality product at the end of the day, you have to have quality people involved in making it. You can make a very good living from craftsmanship today. Unfortunately it is dying out, young people are not interested in it.
OT: Do you also educate young colleagues?
MŠ: We are trying. We are the right mix of colleagues with a family atmosphere. We recently did a quiz where one question was how many family groupings work for us. We have 160 employees and we counted 14 of them, which is a total of about 50 people who are family connected. But it’s not family, it’s trust in the company and they all work here because they can do something in their field.
OT: Coming back to the business, you invest a lot in development. That must be challenging.
MS: Yes. Developing and producing your own product is a long and difficult road, but we build that much more lasting value again. We started by bringing in outside labor. We went halfway around Europe and filled the factory with custom-made components based on customer drawings. Gradually we grew in sales, hired new people and invested all the money we made into developing our own products and gradually started to bring them to market. First we introduced innovative hydraulic arms in 2017, and a year later we introduced the dump trucks and towing platforms that eventually became the carrier segments. Gradually, as we grew with the sales of our own products, we terminated the cooperations with cooperative customers who had the lowest added value and replaced them with our own product. We started at a 90:10 ratio in favour of component manufacturing. This year, our plan is already built on 80% of total sales from our own products and only 20% from co-operations. We want to maintain this ratio strategically in the future.
OT: How do you plan to break into the European market, where the cards have been dealt for years?
MS: We would like to shuffle the cards a bit. It takes a lot of patience, determination but also humility that we can do it. In the beginning you have to have a vision and find customers that will give you confidence and later on references. Not to forget good marketing. You wouldn’t believe how many cars we sell through Facebook – a third. We’re talking about 400,000 machines. Even though it’s challenging, we’ve gone from being a no-name company to slowly becoming the brand with the highest market share of sales in Sweden and Finland. In the UK, we have maybe a fifth of the market. Scandinavia was our first focus and we have adapted our product development accordingly. It’s a rich country where towing operators can afford to buy any brand. I am pleased that they are increasingly starting to choose the ESSEL brand precisely because of its innovation potential, design, many unique solutions and top quality performance.
OT: I was intrigued by the sale of a 400,000 car via Facebook. How does it work?
MS: The interested party found us via the internet. We currently had a stock salvage truck built. We sent him pictures, we shot him a video, and he sent 400 grand up front for the car. When the money came in, he sent a chauffeur, who took over the car and drove it away. It takes very good marketing. We do a good job at it in terms of the website, social media, regular newsletters to customers. We have a large customer database. We have done a survey of the whole of Europe in two months, we have filtered the email addresses and we send them regular newsletters with the latest news. We are gradually building brand awareness and customers are starting to contact us more and more with enquiries. Every year we participate in specialized exhibitions focused on our segment. We regularly go to Germany, Finland, Norway and England to present our products and innovative solutions.
OT: What innovations are you able to attract foreign customers with?
MS: We really want to be a quality leader in the market. When the Swedes came to visit our factory, they were impressed with the quality of our manufactory. They particularly liked the weld design , but also the overall quality of our products. We have strong, robust constructions, we spare nothing. We produce in premium quality, but we can set the costs so that we are competitive, even though our products are no longer priced far from those top brands.
OT: Do the numbers bear this out?
MS: When I took over the company in 2014, it had sales of 1.6 million euros. We have a revenue plan for this year of 15 million. We are not yet at the stage of profitability that we need to be, but we are patient and believe we are heading there. The factory in 2014 was in a desolate state, with no machinery, no vision, no investment. In the last 5 years we have invested 7.5 million euros in it. We are talking about completely new CNC machines, technologies, lasers, machining and bending centres. We are investing in marketing, sales and expanding distribution networks and the results are gradually coming in. We are currently delivering the first machine to Belgium, the Netherlands, Denmark. We are honestly building our way to our goal. In the next five years we would like to reach the 25 million euro mark in sales.
OT: Have you also had offers to sell the company?
MŠ: We have already received several offers to sell the company, one even from one of the biggest players on the European market, but we have rejected them. I admit I was flattered, as it was a form of recognition that we were doing things well. But when you’ve been building something for 10 years and you still haven’t tasted the fruits of that honest work, you don’t want to sell it. Everything has its time.
OT: What makes a good leader?
MS: I try to be an example. In my approach at work, in my communication with my colleagues. I listen to a lot of people and take an interest in them. Openness in communication and truthfulness is also important. That’s how trust is built and if people trust you, it’s easier to achieve common goals. Plus, I’m lucky that my colleagues are not only creative, but also have a high dose of self-management. I would like to mention one of the most enjoyable moments for me and that was last year’s company party in the assembly hall. We cleaned it out, brought in benches, catering, a stage and a rock band. During the evening, about 30 colleagues came up to me to say how happy they were to be working for the company. That’s the biggest satisfaction for me. People need to feel that their work gives them a purpose other than sales, numbers, performance, or KPIs.
OT: What impact does your company’s work have on the region?
MS: While business is business and you always end up with numbers in the end, the positive impact on the region and the country has been one of our key motivators. When we took over the factory in 2014, we said we wanted to build a modern engineering factory with our own product, something that we would eventually be able to export to the world as made in Slovakia. Building such a company is also an opportunity for various supply chains. At the same time, we have said that our children are growing up here, so let us create opportunities in the region not only for them, but also for people who live here and would like to realise themselves. There are a lot of smart people in Slovakia, including in our Banská Bystrica region. We do not have to be just an assembly workshop, we have the potential to create know-how. Our experience confirms that we Slovaks are just as capable of doing this as the Swedes, the Germans, as anyone else, and I even think that in many areas we can do it better.
OT: Do you have any advice on how to run a successful business?
MS: “Throw away too much modesty, don’t be afraid, do things honestly, with good intentions and trust yourself. Be persistent in fulfilling your vision, and when success gradually comes, add more so that success eventually turns into lasting value.”
Photo Source: ESSEL
