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Certificate of Quality

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Annual Report

Annual Report

 

General Manager´s Introductory Word

 

Dear shareholders,
          The year 2000 was a year of the joint-stock company's intense restructuring, which began in 1999. We can primarily characterise the year 2000 as a year when we created conditions for economic stabilisation and the company's development. Predominantly, we aimed to stop the company's losses and to enhance the company's efficiency to reach positive numbers, including mobilisation of available financial resources. We can state that this target was accomplished, even if we did not realise to fulfil planned values due to difficult market changes. In spite of this fact, there were fundamental and very dynamic changes in the organisation, which concerned each division and each employee. As a result of this activity, the company further reduced and its labour productivity and efficiency, which everybody understood as a key to a long-term stabilisation and the company's development, dynamically increased. There was a basic moment in the company's reduction consisting in a decrease of its number of employees by 17% and amelioration of the overhead and production employees' ratio. We reached a 5%-growth of average wages when having decreased wages and salaries compared to 1999. We shall remark that the process of significant reduction and our labour productivity's significant increase ran in a social understanding atmosphere.
          Concerning the TQM adopted program, i.e. "Total Quality Management", there were as well significant changes, which positively influenced a development of production costs, namely after having reached a better return and internal quality of the company's production process. The quality management field remains a key target even in following periods, namely due to the fact that we will further produce under a pressure of dynamically increasing input prices and decreasing output prices.
          As a reward of our company's activities concerning quality, we were awarded the "Czech Made" make on 30th June 2000, which will support development of our new sales activities. To ensure constant improvement of all the company's processes, we elaborated certain internal rules for that purpose, i.e.; the Total Quality Management. The most important success on the quality field consisted in a completion of development of the C-130 ceramic material of a really high quality for production of shell-type insulators, which brings us a certain competition advantage and possibilities of further sales, namely into demanding export markets.
          The "Target Costing" method enabled us to create conditions for product specialisation of our divisions. In that connection, several products were excluded from our production portfolio as having no perspective. In the same time, and constantly according to our customers' wishes, we develop new and perspective products. We intend to terminate specialisation and production optimisation in 2002.
          Our company is acting in the markets, which are liable to constantly faster changes and globalisation trends and simultaneously, in the markets with a strong competition and a dominant position of global companies. Our current production assortment depends on development of the energy-making industry, electric network distribution and railroad traffic, namely in the Czech Republic, where we supply 39% of our production. As our company constantly succeeds in increasing export sales, we show to have a good development potential being determined by a stable production process, sales spread from the USA to Australia, and as well by our economic stability. For that reason, the "Elektroporcelán Louny" company gradually reaches better results even if the domestic market stagnates.
          The company's financial situation ameliorated in 2000, namely in the structure and amounts of receivables from commercial activities. The company currently paid its liabilities and generated positive cash flow. Although it did not create sufficiently high reserves yet, the company is not lumbered with loans from the past and thus, it meets conditions for its further growth, i.e. it has capacities for further dynamic development in the industrial ceramic field. However, we understand the year 2000 is transitive in a certain meaning, after having created and still creating conditions for representing a standard of the European quality and a price level of our products delivered into the world market. We want to further develop and namely make our activities more efficient towards our customers.
          For that reason, we can state that our company fulfilled basic conditions for the past period to stabilise and strengthen its position in the market, and that it noticeably moved towards to the European management standard and gradually realise its individual development programs. Our partial successes confirm that the company's orientation to four basic subjects, i.e. shareholders, customers, employees and the surroundings where we live, is right.
          In conclusion, let me thank in this way, dear shareholders, to all the company's employees for a good work performed, to the Board of Directors and to the Supervisory Board for special, managerial and control activities performed in 2000.


Ing. Petr Milota
General Director and Deputy Chairman of the Board of Directors

 

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