What is the Czech economy suffering from? There just aren't the people
A year and a half has passed since the announcement of Gatema's transition to a holding company. How has the change in structure met your expectations? What has it brought to the company?
The transition to a holding company is a challenging operation in itself, and we were right in the middle of a pandemic, so the last two years have cost us a lot of strength. But it was the right decision. Gatema used to be one joint-stock company that had three companies hidden inside it, but each was completely different in nature. The first focused on PCB manufacturing, the second on information systems sales and implementation, and the third was developing a product that brings the process to operating rooms for teaching and for doctors. These are three completely different types of business.
Yes, but that's how Gatema operated for years, and at least judging by the rate of growth, it was quite successful, so why the change?
Of course, we could have continued under a single legal entity, but we wanted to streamline everything externally and internally. Today, each company has its own legal entity, its own economics, management and marketing. Comparing it to computer interfaces, we now have a "hub" where the company can be easily connected and easily disconnected without having to reinstall and update the entire system every time.
The last two years have been really turbulent for you. You opened your own representative office in Austria, where Katema Tec was founded, and shortly before the start of the pandemic you acquired the German Kubatronik. How difficult is it for Czechs to 'buy' an established German company with more than 40 years of history?
It was not easy, and we were aware of that. That's why we also brought in external consultants and external companies to do the deal and align all the processes. But the results are worth it. Economically, in terms of personnel and experience, we are in a different place than before. Kubatronik is a successful company primarily because they have quality people working there and very good management. We are close in our focus because we both focus on prototype production of printed circuit boards. Kubatronik makes highly sophisticated boards at a world-class level, often to the limit of current capabilities, we do not make extremely complex ones, but extremely fast and flexible ones. We complement each other perfectly.
How much did the whole Gatemy PCB and Kubatronik alignment affect covid?
It came at a bad time. We had planned to meet much more often, but suddenly it was not possible to just get in the car and spend a few days in Germany or in Boskovice. But both sides did their best to make everything work. It's true that we already wanted to have a common information system, but we will deploy it this year. On the other hand, we have already been able to solve other obstacles that have come up together. For example, mutual assistance with raw materials or with specific contracts.
When we interviewed representatives of Kubatronik or Mr. Kader, who runs Katema Tec in Austria, for PCB Master, they all mentioned that it is very challenging to keep PCB production in Europe. But that covid has ironically played into this situation a little bit. How do you see it?
That's a very difficult question. Of course, we all know how it is with the Eastern manufacturers, who with their low labour costs are holding Europe back. They're also holding us back. That's just the reality. But on the other hand, it forces us to be even better, better quality, faster and so on. I may be indulging in speculation, which may not be to some people's liking, but basically the whole situation with the covid has shown that globalisation has its risks, and the pressure for the cheapest labour price and the cheapest raw materials is not self-defeating. It has shown that a certain regional self-sufficiency is needed, that we cannot just rely on buying everything in China. In future, we need to consider the fact that something must also be produced in Europe. Diversification is needed, and the risk of focusing on near-monopoly suppliers has become fully apparent. Fortunately, companies and perhaps even governments are beginning to realise this.
Will automation and the push for sustainability and ecology enable manufacturing to return to Europe?
Automation will, because we can already see clearly what the Czech economy is limping along on. There are simply no people. Whether it is manufacturing, crafts, medicine or IT. That's just the way it is and robotization is one of the ways. We can't compete with cheap labour, but with higher know-how. In the future, it doesn't make sense to buy just hands, but heads. And hands can be automated well. Sustainability and ecology are more complicated. The emphasis in this area must be consistent around the world, or evenly across all developed economies. If this is not the case and the EU is alone in its emphasis on sustainability, it will in turn weaken our ability to compete.
Let us return to Gatema. Although you said that the three companies do not have much in common, one of the key advantages of your company remains that Gatema IT developing the manufacturing information system for Gatema PCB. Is it still true that you are your own first customer?
Yes. Historically, this is where our great strength lies, that we have a company under one roof that is involved in the development of ERP Helios and implements this information system for our PCBs. We are able to customize, test and modify things right away. We are an excellent reference for ourselves because our PCB production is at the top level on a European scale.
How are the individual companies within the Gatema holding doing? What is new in the field of ERP systems, which is the primary focus of Gatema IT?
We have gone through several acquisitions in the past few years. Not that we have bought companies directly, but we have acquired software solutions. We took over the copyrights of some MES software. We acquired some customers from other partners who could not service them well. Through a series of acquisitions of this type, Gatema IT has grown a lot in the last two to three years. In addition, we are planning one major acquisition of a company in Slovakia in January. We are no longer a smaller company, but rather a medium or larger one.
What about Gatema PCB?
We have a fresh survey in our hands, according to which we should be the largest PCB manufacturer in the Czechia today. Investments in our machinery and greater efficiency have helped us to do this, as has the acquisition of Kubatronik or the establishment of an Austrian subsidiary. Our long-term ambition is to be a major player throughout Europe. Together with Gatema IT, these are two very stable industry streams that have been developing for a long time and have basically decades of existence behind them.
Where does Gatema Medical stand?
Gatema Medical is actually still a start-up. It's an exciting ride, a bit of an exploration through struggle. We've had to make some radical changes in the covid, we've restarted the business, changed direction a little bit. It's still a promising product and an extremely promising industry.
When I had a balance conversation with Mr. Vlk here a year ago, he told me that 2021 should be a consolidation year for Gatema. That there are so many changes that he needs to sit down and explain them well to people.
I can only agree with that, that is still true. We have also had the IT acquisition in Slovakia on the table for a long time, but we didn't want to do it in a hectic way and together with many other changes. Over the next year or two we want to focus more on natural, organic growth. I'm not saying that if an extraordinary opportunity came along that would move us forward that we wouldn't take it, but we don't have that intention at the moment.
In pursuing organic growth, don't you run into the limit of just "good people are not available"?
I'll share a fresh experience now. We have a very experienced HR person coming to us from a much larger international company. For us, it's a sign that we are a respected employer that offers little. Whether it's the salary conditions, the personal approach or perhaps internships in Germany. We're not a corporation, we don't offer unlimited career progression, but the conditions for a really good job are there.
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