INTERVIEW — Ekom Piešťany

Engineering Vladimír Bátora and Július Ivan

(right) founded Ekom with
colleagues in early 1990s. After two
years of 7-day working weeks, they

a global path
could say that the company
would survive.

Six former constructors from the

traditional Piešťany healthcare
equipment producer Chirana set
up their own firm, Ekom, in 1992. In
the more than 25 years they have
been working together, they have
produced hundreds of thousands of
special oil-less compressors for the
healthcare sector and industry and
exported them to dozens of countries
around the world. In that time they
have learnt a lot about geopolitics,
European bureaucracy,
conservatism in business
and, most recently,
the “hoovering up”
of people by
automobile firms.

T — TATIANA VAVROVÁ
P — MIRO NÔTA

52 FORBES MADE IN SLOVAKIA MADE IN SLOVAKIA FORBES 53

INTERVIEW — Ekom Piešťany
“Who are you going to see?” asks a man in a work overall
in an industrial zone on the outskirts of Piešťany. “Oh,
Julo. He’ll come and get you,” he assures us, when we tell
him that we’re looking for the manager of the firm, Július
Ivan. Apparently, everyone at the firm has known each
other for years.
The two co-owners and managers of the firm, Július
Ivan and Vladimír Bátora, who we speak to, run the compa-
ny together. They even share an office together which they
decorate with small memorabilia with healthcare themes,
family photos and cups from sporting competitions. It has
a view onto green fields and the foothills of Tribeč. Under
Ivan, the executive director, and Bátora, the production
manager, Ekom is in good condition: sales last year stood
at more than 17.5 million euros, gross profits were more
than a million, debt levels are low, and there is a cushion of
10 million euros built up from previous years’ profits. The
company’s stability is highlighted by the fact that 70% of its
partners are long-time partners.
The words stability and reliability crop up repeatedly
during our interview, in connection with both their prod-
ucts and the firm’s operations. Ekom and its people have an
exceptional appreciation for both qualities.
How was last year?
VLADIMÍR BÁTORA: Reasonable.
What does that mean?
BÁTORA: That we reached our goals which allow us
to develop further. I think we could have achieved more,
but with the situation on the markets, various con-
straints, embargoes in certain countries, we didn’t reach
our initially expected 10-12% growth (in sales). We ended
up with 7.
What’s the decisive indicator for you?
JÚLIUS IVAN: A combination of sales and profits.
We’re a production firm with a varied range of goods. The
profit for each is different and our prices have to reflect
what’s happening on the markets. When the market is very
“dense”, supply is high and we have to be able to respond.
BÁTORA: Just to make things clear - to keep up with
the competition we have to keep investing in development.
There’s a general principle which is that for a firm to func-
tion effectively it needs to make a profit of about 10 to 12 %
(on sales). If it’s less than that you start limiting investment.
What do you do? Do you dip into profits from recent
years?
IVAN: You need to consider what you are going to in-
vest in. Luckily we can access our own resources or, if we
need to make a larger investment, we’ll consider loans. But
54 FORBES MADE IN SLOVAKIA
we’re very conservative when it comes to these things. We
invest as much as we can within our limits. We’ve learnt
that it’s better not to overstretch ourselves, because it can
be risky for the firm. Our development is gradual: we don’t
always grow, sometimes there’s some stagnation and we did
have two years in a row where there was a small fall, but
the general trend is upwards.
BÁTORA: It’s hard to predict how revenues will develop
in future.
IVAN: A lot of things can have an effect. It’s like a mosa-
ic. We export to countries from Indonesia, the Middle East
and Russia to Europe and the US. Geopolitics can have such
a significant impact on these countries that it affects us too.
What do you follow most closely when you look at foreign
news?
IVAN: Embargoes.
BÁTORA: We export to the whole world, either directly
or through our buyers. If you have orders in Russia or Iran
you’ll be interested in what’s happening there.
In 2016 you said that you were affected by low oil prices
and subsequent lower demand among Russian-speaking
countries and that the loosening of the embargo on Iran
had, conversely, supported demand for healthcare equip-
ment. Now it looks like the situation has reversed. Can
you see this in your orders?
IVAN: We’re aware of it. We also get a lot of other infor-
mation from our distributors in individual countries. But
predicting what the situation will be like in six months is
very hard.
BÁTORA: This year we’re estimating a moderate 5%
rise in sales on last year. But we’re cautious. The situation
around embargoes is unclear. If the Americans enforce an
embargo they can cut off supplies to a country of certain
components from third-country suppliers. At that point
it’s good to consider what products you can actually sell.
IVAN: One advantage though is that healthcare equip-
ment is often exempt from those embargoes. But then
again, there’s usually the problem that the country in-
volved cuts its resources for any kind of purchases, even
for healthcare, partly because their currency significantly
weakens.
Can you already see that with Iran?
IVAN: There are signs, yes. If their foreign currency rev-
enues from oil sales are limited, they will be able to buy less
and less from abroad.
Is it an advantage that you make healthcare equipment?
IVAN: In terms of what I’ve just said – often being ex-
empt from embargoes - yes. On the other hand, these are
MADE IN SLOVAKIA FORBES 55
INTERVIEW — Ekom Piešťany
Several bidders
large countries which get used to developing their own
similar products. We produce dental compressors, for
which there are a number of private clients. It’s the same
with our compressors for industrial use. But our significant
approached products are medical compressors which are used in things
like artificial lung ventilation and it is precisely these which
are often orders for the public sector. Some countries pre-
us with buying
fer their own suppliers. In Russia, for instance, our expe-
rience is that the terms and conditions specify that even if
a local supplier is 15% more expensive, they will win.
offers. But we Is there anything you can do about it?
IVAN: We work with local partners which apply for
these tenders. Our compressors hook up to ventilators and
are still active,
become part of their product. After that it’s down to them.
Which markets are most significant for you?
we don't feel
IVAN: In terms of turnover it’s the European Union. But
we estimate that a large portion of our compressors go to
third countries as parts of other products. In Germany and
United Kingdom there are major producers of artificial
like leaving. ventilation who export 80% of production along with our
products.
BÁTORA: After that it’s Russia but the Middle East, Asia
and the Pacific are significant for us too.
Are you trying to establish yourselves in America?
IVAN: We sell in the US. It’s similar there in that lo-
cal producers of artificial ventilation export most of our
compressors in their products to other countries. At the
moment we have some orders in process in the dental
field. We don’t export complete compressors with nozzles
(a metal pressurized container with air) because they have
different regulations for them there, and sending a con-
tainer with air across the sea would by uneconomical. This
cooperation with a local producer is developing nicely.
However, changes in exchange rates can affect us great-
ly, as we have experienced in the last few months. When
the euro strengthened we were suddenly one tenth more
expensive, but then the situation reversed and our supplies
were suddenly more attractive. But the US only makes up
about 2% of our annual turnover. It’s an area where we see
growth potential.
BÁTORA: We’re building up awareness of our brand,
our quality and reliability. It’s an important reference.
How long does it take to get into the market?
IVAN: We made our first contacts at an exhibition in
Düsseldorf in Germany in, I think, 2000 or 2001. We sent
them our proposal because until then they had been using
a very cumbersome compressor. But even then it took until
2006 before we started supplying regularly.
56 FORBES MADE IN SLOVAKIA
What happened during those five years?
IVAN: We had to get permission and registration from
the FDA (Food and Drug Administration, the healthcare
regulating body), and we had to have permanent rep-
resentation there. They have their own procedures for
assessing products and we had to supply lots of materials
about quality and safety.
Are their criteria more demanding that in the EU?
BÁTORA: We thought so at the start, but the EU is
currently drawing up legislation which is close to that in
America. It’s balancing out.
What do you use to succeed in such a difficult market?
Better prices or an exceptional technological solution?
BÁTORA: Our prices are similar, we stand out on relia-
bility.
IVAN: When a producer who wants compressors from
you for their equipment gets in touch, they already know
everything about you. They know how to compare, for ex-
ample, refunds and returns, between you and other produc-
ers. Their people know how to assess you on the basis of
customer audits they do about you. They need to know that
your house is in order, that you know what you are doing
and you’re able to guarantee the required quality.
Just one more thing regarding EU and US rules: I think
that their system is pragmatic and that ours has, recently,
become unbelievably difficult administratively. We often
can’t see the point of all the requirements. They don’t im-
prove the product and they raise our administrative costs.
How much of your turnover comes from the EU?
BÁTORA: 30 - 35%.
IVAN: It’s not just for these orders that we have to meet
administrative requirements, it affects our entire produc-
tion. If we want to put the CE label on our products, we
have to meet EU regulations because in many countries
it’s this label which they assess you by. But then their certi-
fication departments need further materials, often very de-
tailed. There’s a concern that someone could misuse those
details about our products.
Has that happened to you?
BÁTORA: China’s a classic example. They’ve copied all
our stuff there.
IVAN: A Chinese firm patented a product that we’ve
been making for years. We’re looking into whether we can
do something about it.
BÁTORA: We’re checking with our patent office. Ac-
cording to international principles, once a product is on the
market, you can’t patent it, because it’s already in the public
domain. But we don’t know what the rules are in China.
IVAN: It’s debatable what the firm would gain from
launching legal action. Patent lawyers are very expensive.
Four years ago you told Forbes that you make 15% of
medical compressors under other brands and that num-
ber would double in two years. What’s the situation like
now?
IVAN: We still make them and work with various venti-
lator producers. Artificial ventilation equipment is compli-
cated and each producer has certain specifications, at least
their own labelling.
BÁTORA: Yes, it has grown, maybe up to 40% of medical
compressors.
How are sales developing of the various individual types
of compressors that you make?
BÁTORA: Dental is stagnating, but medical and indus-
trial are growing moderately.
What kind of uses are industrial compressors put to?
BÁTORA: Mainly in laboratories where they use
standard compressors, which we have already developed.
The greatest number of requests for the development of
new compressors that we have comes from the railways,
for example for lifting pantographs (an apparatus on the
roof of a train used to connect to overhead electric pow-
er cables) or in flushing systems, or for lubrication and
sanding so trains can run smoothly. Thanks to compres-
sor lubrication, the driving wheels screech less when
the train goes round bends. When locomotives pull huge
weights at greater gradients they have enough pulling
power, but there may be adhesion problems at the wheel/
track interface and they slip – at that point using the
compressors ensures sand is sprayed onto the tracks in
front of the wheels.
Do you see the greatest potential for growth in the indus-
trial sector?
BÁTORA: It’s still growing and the number of possible
ways compressors could be used is expanding, for example
at the moment compressors for oxygen or nitrogen gener-
ators.
IVAN: They’re used in laboratory analyses, for instance
in chromatography (separating individual parts of a mix-
ture) if nitrogen is needed, they can get it from the air using
this equipment.
BÁTORA: Nitrogen is being used more and more in the
food industry, for example in prolonging the shelf-life of
foods.
The firm was set up by six developers in 1992. Do you still
have the same structure?
MADE IN SLOVAKIA FORBES 57
INTERVIEW — Ekom Piešťany
BÁTORA: There are still six of us, but one of the origi-
nal founders died last year and his deputy took his place.
The pace of work has changed – in the first two years we
worked seven days a week, but then we said to ourselves
that six was enough (laughs).
At what point were you able to say to yourselves that
things were finally OK, that the firm would survive?
IVAN: After about three years. Until then we were in
rented facilities but by then we believed in ourselves and
bought an old hall and carried on working there. But it was
gradual.
How do you decide on strategic matters? Are you always
able to agree?
IVAN: Usually, as managers, the two of us prepare
a proposal and discuss it at a board meeting. Operative-
ly it’s only us who deal with it. In a firm of 220 people it
couldn’t work any other way. You have to have some kind
of hierarchy and processes.
Do all the partners still work in the firm? How do you
divide up responsibilities?
BÁTORA: For the moment yes, they all work here. In-
dividual people took up their areas of responsibility right
at the start and have stayed like that to a large extent ever
since. What’s important is that we always find a consensus
among partners so that relations within the firm remain
good, and others still trust us as managers. That’s because
the two of us have to make a lot of decisions, always in the
knowledge that we make those decisions as best as possi-
ble in the given situation and with the information that we
have at the time.
IVAN: It’s also important that we meet with the part-
ners outside of work, if possible with wives and children.
We do that a number of times a year.
In the 1990s you broke away from Chirana, from where
you also most likely had your first employees. With lots
of talk at the moment about problems with a shortage of
workers, can you still find qualified employees?
IVAN: Not just from Chirana. In the beginning we took
advantage from the fact that the town of Piešťany was
a base of healthcare firms and quality know-how. But at
the moment it’s a bitter battle to find people, from cutters
to constructors.
BÁTORA: The automobile companies in the area are
taking a lot of people. It’s competition we can’t beat. Their
wage policy is different – they pay technical workers well
above Slovak rates. It’s upsetting when, for example, we
train up a constructor for two years – because that is when
they really become a constructor – and then they leave
58 FORBES MADE IN SLOVAKIA
us. Our wages are good by Slovak standards, but they get
offered twice as much.
IVAN: We can’t afford to match that because we
wouldn’t be able to retain the firm’s structure, its entire
internal set-up. If we did we would have to raise every-
one’s wages. And it’s not just PSA or Jaguar that are taking
people, it’s lots of other smaller suppliers that came with
them. There’s not much we can do about it, but we are
fighting.
What about robotization?
BÁTORA: For some activities, yes, but it needs time.
IVAN: Robotization has its limits. You have to think
about where it makes sense to use it. Our production struc-
ture is quite varied and there are only a few products we
produce in the thousands. Some we only make a few dozen
of and in some case it’s just a few individual pieces a year.
Construction can be varied and this limits the use of robots
which we would have to continually reconfigure, or we
would have to change production.
Vladimír Bátora and Július Ivan
with their compressor DK50
What would that mean?
that holds production number
IVAN: If you’ve ever been in an automobile production 2, from September 1992. They
facility you will have seen they use robots there in a fairly got it back (by swapping it for
a newer machine) from a cus-
large enclosed space, a cage, and people cannot be there.
tomer in Eastern Slovakia.
If we were to use those kind of robots here we would need
three times as much space. Anyway, I see the future as
robots working together with people, at least in some ac- BÁTORA: A combination of things. The development of production. In our current facilities we can’t get the flow of
tivities. For example, we have a welding robot which saves our new products is limited by the capacity of our devel- materials that we need.
us a lot of time. opers. We invest into testing facilities and if we want to be BÁTORA: We want to start the planning and then get
BÁTORA: About two years ago we started a project to good we need good production technology. This makes up the building done within a year, or two.
automatize the assembly plant for aggregators. We worked the bulk of our investment. Mind you, to make our firm IVAN: We’ll see. The building that we built last year
with CEIT, a company from Žilina. But they cut back on more attractive to employees we have just invested in a new was a big investment and we used external financing for
their co-operation because they work for Jaguar. Still, building with indoor parking (he points to the multi-sto- it. We prefer to be conservative in our financing and it
we’re soldiering on and moving towards collaborative rey building next door), which is going to house market- wouldn’t be a problem to get more loans, but we think
robots. ing, sales and training facilities for service technicians and it’s unwise.
customers. Last year we also invested three quarters of
When do you see them being properly introduced? a million into new laser equipment at our pressing division Do you get people approaching you about buying the
BÁTORA: Perhaps this year… (which accounts for 20-25% of the firm’s turnover). firm, or at least a part of it?
IVAN: …well, more likely in two years. IVAN: Until now our people were largely in open space BÁTORA: Yes.
facilities, but those have their limits. In the new building
That’s a cautious outlook. they will be more split up but there will still be common What do you tell them?
IVAN: If we’re talking about just one robot, then maybe areas for discussion to help creativity. BÁTORA: That it’s not currently for sale.
within a year, but if we’re talking about a systematic ap- IVAN: We’re still active. We don’t feel like leaving. Most
proach then maybe within three years. How much did you invest in that? of the interested parties were from among our competitors
BÁTORA: It was a big investment for us, around 3 mil- and we didn’t see any synergy there.
How many compressors do you make per year? lion euros.
BÁTORA: 12-15 thousand units annually. Is it just foreign firms that are interested or Slovak invest-
IVAN: But in some equipment we have 12 compressors. What’s next? ment groups as well?
Altogether we produce up to 16 thousand. IVAN: We want to build a new production hall for BÁTORA: Only foreign firms.
compressors next to it, not because we need to enormous- IVAN: It’s a very specific field, it involves production.
What do you invest in? ly expand capacity but because we need to optimalise (Smiles) It’s a very hard way of making money.
MADE IN SLOVAKIA FORBES 59