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SOFIA (Bulgaria), March 29 (SeeNews) - Steel radiator manufacturer Korado Bulgaria [BUL:4KX], part of Czech-based Korado Group, has started production of a newly-certified radiator model for the Russian market, the group's CEO Vojtech Chamek told SeeNews.
This type of radiators will only be manufactured in the Bulgarian plant, as Korado's Czech production facilities do not have the necessary equipment for this, Chamek said in a recent interview.
Korado Bulgaria sold 547,138 units in 2018, down from 555,747 in 2017. The decrease was mainly due to lower sales in non-EU countries - 29,562 units last year versus 48,314 units sold in 2017. Sales to other EU countries grew to 507,044 units last year from 491,487 units in 2017. The company produced 467,497 steel panel radiators last year, up from 460,569 the year before, following a strong increase in output in the second half of the year. Korado Bulgaria produced 245,880 panel radiators in July-December, compared to 228,825 radiators in the second half of 2017.
On the domestic market, Korado Bulgaria sold 10,532 units last year, as compared to 15,946 a year earlier, as the company's domestic operations were negatively impacted by competition from Turkish manufacturers.
Despite the lower sales volume, Korado Bulgaria's net profit rose by an annual 10% to 5.3 million levs ($3.0 million/2.7 million euro) in 2018, as its revenue increased by 3.2% to 44 million levs
Meanwhile, the company is progressing with the reconstruction of its recently acquired production hall, Chamek also noted. Last year the company said it is investing 8 million levs in the facility.
Korado Bulgaria is also negotiating a contract with a potential supplier for its paint shop project.
"However, the contract has to be bulletproof since the potential supplier comes from a country which is currently very challenging," Chamek noted.
Furthermore, the financing bank has expressed its doubts about this transaction, he said, adding, "We have to be very careful from this point of view."
In addition, the investment in the paint shop is affected by the fact that Korado Bulgaria is considering introducing some new and sophisticated products on the local market, Chamek explained during a news conference on Thursday.
Although volatile steel prices are affecting the market, resulting in strong competition, Korado Bulgaria is currently a very stable company and a fully integrated part of the Czech group, and its future growth is expected to be smooth and moderate, the official stressed.
"The competition is getting tougher and overall results in the industry are not terrific. We expect further consolidation within the industry," Chamek also said.
Korado Bulgaria remains set on joining the blue-chip SOFIX index of the Bulgarian Stock Exchange, and the company is working with its market maker - local brokerage Elana Trading - on achieving this goal.
Korado Bulgaria was registered in 1998 when the Czech company acquired 98.2% of the originally German-Bulgarian steel radiators production plant in Strazhitsa, in northern Bulgaria. The plant exports its output to the markets of Romania, Ukraine, France, Hungary and Bosnia.
(1 euro = 1.95583 levs)