Business News

Out of Crisis, Svilanit Expanding to New Markets (interview)

Kamnik, 28 May (STA) - Svilanit, the Kamnik-based bed linen manufacturer, is on track to break even after it all but collapsed five years ago. The company is now expanding its client base and spreading to new markets, general manager Mojca Šubic has told an interview with the STA.

With a history going back 75 years, Svilanit used to be a leading textile company in the former Yugoslavia, employing a workforce of 800. But the company ran into serious trouble in 2008 and then it was taken over by Šubic and CFO Sašo Pušnik.

Before liquidation was halted in 2010, 200 of the 480 staff lost their jobs, so that the group employs 180 staff in Slovenia today at the core company Svilanit, protected workshop company Svilanit Svila and Svilanit Energetika, which generates steam for production and distance heating in the area.

The company also has subsidiaries in Serbia, Croatia and Poland. The business has not changed; as in the past workers at the Kamink plant still manufacture bed and kitchen linen, towels, bathrobes, and bathroom mats as well as ties and accessories, in all 400 tonnes of different products a year.

"We generated 9.6 million euros in revenue last year. Svilanit Svila operated in the black, but the core company made a loss, but much lower than in recent years (EUR 1.03m in 2011). One of the reasons was the high price of gas, which fell somewhat in September, so we expect a better result this year," Šubic says.

A growth in revenue is planned for this year, which should enable Svilanit to break even. Šubic is especially upbeat about new buyers and new projects. While 45% of the sales are generated at home, EU markets remain key foreign markets, but the United Arab Emirates and Russia are increasingly important.

"We'd like to retain our position in the European market and countries of the former Yugoslavia as well as expand to new regions," says the CEO, who argues that Svilanit buyers appreciate the quality and good design as well as the fact that the production process is environmentally and skin friendly.

"More and more buyers are coming back to us, among them larger hotels and hospitals. They pay a bit more for our towels and bed linen, but they can use them longer. There is a joke at the company that our goods are of too high quality as people don't change them often enough. But we won't compromise quality."

Svilanit is not considering entering a strategic partnership for now, hoping to secure future growth development on its own.

But the company currently has a major buyer in the United Arab Emirates, which is looking for investment opportunities in Europe, which Šubic says could be of interest to some other Slovenian company.

Asked what Europe and Slovenia could do to preserve the textile industry and jobs in Europe, Šubic says that given the high environmental costs, some relieves would be welcome, as well as measures to stimulate home production and preservation of jobs in labour-intensive sectors too.

Svilanit has close to 60% of production in Slovenia, while it outsources the rest to subcontractors in other countries, mainly Turkey.

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