Business
1999 was the first year of consolidation in our
company aimed at initiating the construction of a marketing-driven, customer -oriented firm with the aim of
improving services for our customers and gaining more segments of
the market or, in those segments where EP Louny is already
active, strengthening our position by providing better services
and offering more attractive market prices. We adopted a new
strategy aimed at breaking into the US market in the coming years
and using the excess capacity of both our plants, ie. at least the
50% of capacity unused since the break-up of the Comecon trading
block.
On the domestic market Elektroporcelán
remains the leading supplier. Sales in 1999 displayed strong
growth. In the near future this market will continue to be
affected mainly by the decline in investment at Czech Railways
and in the regional electricity companies' distribution lines.
Europe: In this segment of the market the
privatisation of energy companies is beginning. In this area,
stagnant sales seem more likely than dynamic development. This
situation has led to a sharp decline in the prices of insulators
and the volume of orders. Our strategy for penetrating this market
is based on insulators manufactured from C 130 material, a
technological process mastered only by our strongest competitors.
If we succeed in gaining customers for that product range it will
result in an increase in sales for the Merklín plant.
Concentration on European markets, however, will not be
sufficient to produce dynamic growth over the next three years.
That can only be achieved by finding new markets.
USA: The USA, Canada and Mexico represent very
promising markets for further dynamic growth. During the course of
1999 we organised our strategy for penetrating those markets and,
in the second half of the year, approximately 40 types of
insulators were selected for sampling and testing in the USA. In
the third quarter of 1999 the production and sale of two types of
transformer bushings for USA was started. The American market
should replace the lost volume of the former Comecon markets
within three years and enable us to use our excess capacity.
In 1999 our joint stock company
began the construction of a marketing and sales group to function
as the leading factor determining the development and, indeed, the
whole future of the company. Emphasis is placed on foreign
language skills to enable Elektroporcelán to operate in all
our spheres of influence - in other words, the whole world.
Marketing and sales are organised in commercial units according to
the various market segments. In 1999 we promoted greater
effectiveness by introducing the new Promis information transfer
system and the MFG PRO sales system. We expect them to be fully
implemented during 2000.
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