Small-scale investment resulted in big success


Small-scale investment resulted in big success

In 1998, Ferrobeton Rt. stood at a crossroads. The mold-cast hollow-core slabs that they had been producing so far, no longer met the demands of the construction market.Foreign investors required high-quality, modern flooring products with longer spans and higher load-bearing capacity.

At the same time the precast concrete industry struggled with low market prices and fierce competition, making companies sensitive to production costs and investments in new technology difficult. Ferrobeton tackled the situation by first acquiring only the key components of a new production technology, so keeping the initial investment at a minimum. They set as a goal to retain their market share of 40 000 m² of hollow-core products during the first year. The result exceeded expectations: with the acquired Elematic technology, first year sales reached 60 000 m². In 1989, Hungary became a multiple-party democracy and began the transition to a market economy. In connection with the overall privatization process, also the precast industry experienced reorganization. According to Mr. István Fejes, Managing Director of MaHill ITD Kft, Elematic's representative in Hungary, it was not until 1996 that companies could really start implementing technological development measures. MaHill ITD has been working to introduce the Elematic technology to the Hungarian market since 1988.

The road behind

The roots of Ferrobeton Rt. go as far back as 1955, when its legal predecessor was established. At the end of 1994, a buy-out resulted in the company being converted from a state-owned to a privately owned business enterprise. The company focused on the production, marketing, and delivery of different types of concrete products, as well as on structure engineering, product planning, and the installation of structures. "We were the first in our country to introduce serial production of room-size, precast wall panels", describes Mr. Péter Juhász, General Director of Ferrobeton. "Our products have always included the fundamental elements of residential construction, as well as reinforced concrete used for industrial construction and communal projects." In 1997, the situation had arisen where the mould-cast hollow-core slabs no longer fulfilled the quality requirements of the market. The slabs had high raw material and labor demand, and their technical parameters were inferior. Ferrobeton realized that they could neither produce the required quantity nor the expected quality with their current technology. The time was ripe for modernization. With the assistance of Mr. Fejes and MaHill ITD, preparations for installing Elematic machinery were soon under way.

The importance of an agent

Although Finnish and Hungarian stem from the same Ugric roots (Finnish is a Finno-Ugric language) and may sound quite similar when heard by a foreigner, they have very little resemblance today. Well, with the exception of "butter" and "blood", which in Finnish are "voi" and "veri", and in Hungarian "vaj" and "vér", but these do not take you very far in trying to communicate efficiently! "When entering a foreign market that has a new culture, a new language, and unfamiliar circumstances, you need a local agent to succeed with the whole process leading to a purchase contract", says Mr. Kari Ahonen, Export Manager at Elematic. "The role of the agent is vital in communicating the customer's requirements to us and our know-how to the customer". "Especially in the beginning, the agent also supports the customer in technical matters". In 1998, all the old hollow-core slab production lines at Ferrobeton where closed down. "We had to start off small, so we bought only the key components with which to make quality products, and kept on using the old logistics of the factory", explains Mr. Lajos Vass, Technical Director of Ferrobeton. The new production system was started up with two Elematic Extruder EL 900E machines. "The Elematic production technology is not a simple ‘switch on and go' -solution, you need to learn how to operate the system", describes Mr. Vass. "But once our operators had received the proper training (from Elematic) and we had become familiar with the technology, the entire production worked trouble-free and with very little waste. Adopting this method to local circumstances succeeded thanks to the close cooperation between Ferrobeton, MaHill, and Elematic." There is always a certain measure of risk involved when you replace a known product on the market with a new one, but performed feasibility studies had indicated, that Ferrobeton had a good chance of keeping their market share of 40 000 m² of hollow-core products yearly. As it went, the first business year showed a result of 60 000 m² of sold hollow-core slabs! "It was a significant economical achievement that the payback time was shorter than the depreciation time of the investment", exclaims Mr. Juhász. With time, the production line was developed further as they invested in new casting modules to increase their product range. For example, in 2003 Ferrobeton became the first precaster in Hungary to produce 400 mm thick hollow-core slabs.

T-beams with flexible slipformer technology

In addition to hollow-core slabs, Ferrobeton also manufacturers small, inverted T-beams. These are frequently used in housing construction and are a typical off-the-shelf commodity, where the market share and profitability mainly depend on the production costs. The old, mould-cast T-beams required high amounts of raw materials, cement and steel in particular, as well as energy and labor. They were cast in fixed lengths, thereby requiring large stocks to be maintained for each standard length. The investment in the Elematic slipformer technology in the beginning of 2003 for making T-beams was therefore mostly economical. The long-bed production method enables low raw material costs as well as low energy usage and less labor. The system is flexible, as different sizes of beams can be made with the same machine on the same beds by simply changing the nozzle unit. This disposes of high stock needs.

Picking up speed to a productive future

With the basic production technology in place, adding new products to the portfolio is easy. In addition to T-beams, the Elematic slipformers can turn out numerous other products, such as ribbed slabs, lintels, beams, and posts, while the extruders allow for a wide variety in the thickness and width of slabs. All things considered, Ferrobeton is now well equipped to provide high quality products to both domestic companies as well as foreign buyers. Having started off small-scale, they are steadily growing stronger through well-planned action. In May this year, Hungary became a member of the European Union and has thus become an interesting prospect for many foreign investors. When it comes to precast concrete construction, Ferrobeton is ready to fulfil and surpass the standards accepted and required in Europe.