Masters in ceramics Villeroy & Boch

MASTERS IN CERAMICS

Leading Hungarian ceramic producer, Villeroy and Boch Hungary Kft is currently working at full capacity and manufactures 1.2 million sanitaryware products a year. The company’s traditional Hungarian brand, Alföldi has enabled the factory to acquire a 50 per cent market share in Hungary, whilst its premium brands including Villeroy & Boch and Gustavsberg are mainly exported to meet the European demand. Edina Beale reports.

Hungary’s largest ceramic producer, Villeroy & Boch Hungary Kft was established by the Hungarian state in 1965. The local pottery tradition in Hódmezővásárhely, south-east Hungary, and the newly built state-of-the art factory was a perfect combination to begin manufacturing sanitary-ware products. Later on, the company extended its activities and became engaged in pot making and tile producing as well.

The factory rapidly developed and soon acquired a strong market position with 12, 000 employees throughout the country. By the 1980s the firm had doubled its capacity and increased its exports of sanitaryware products to 25–30 per cent. In 1991, at the time of the social changes in Hungary, the company was privatised and split into three different units. The potmaking division was taken over by a French firm whilst the division manufacturing refractory materials was bought by a Swiss firm. The Alföldi Porcelain Factory that had already concentrated on sanitaryware products and ceramic tile manufacturing fitted well into the profile of the prestigious German ceramics manufacturing group, Villeroy & Boch.

Rapid growth

Following the takeover, the company’s sanitaryware production, which includes bathroom sinks, WCs, urinals, bidets and washbasins, developed fast. “At the time of the privatisation in 1992, we produced nearly 700000 sanitaryware ceramic products, and 15 years later our production exceeded 1.5 million units,” says Mr Gábor Hideg, managing director of Villery & Boch Hungary Kft.

Villeroy & Boch operates five production plans in Europe, and unlike its other subsidiaries in the western European countries, the Hungarian capacities have been continuously increased and investments have been made constantly. Mr Hideg explained the reasons behind this: “The ratio of human workforce required to make sanitaryware products is extremely high, it is around 30–40 per cent. Wages in Hungary are still lower compared to countries including Germany, France and Sweden which provides an instant advantage for us. There is a condition of course, that we have to meet and provide the same quality

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standards, but our factory can achieve that which is why we can sustain our growth.”

In 2004 a strategic decision was made and Villeroy & Boch Kft was required to gradually take over the European production of the Villeroy & Boch products, instead of focusing on the production of their own Alföldi brand. “Today we manufacture 1.2 million units a year. Half of our production capacity is utilized to manufacture Villeroy & Boch products, a further 30 per cent is used to make Gustavsberg products, and only 20 per cent of our capacities are utilised to continue making Alföldi products. Our main responsibility now is to serve the markets of our parent company by manufacturing their products and distributing them centrally as well as directly.”

A name to be proud of

Standing out with its long traditions and well-known image, Villeroy & Boch has always been a leader in the premium category of the European ceramics. The company is a pioneering designer in the bathroom sector and has launched many innovative products with high-tech solutions over the years whilst also achieving strong presence in the kitchen and tableware sector. In addition to Europe, Villeroy set up production capacities in Mexico as well as in Thailand to concentrate on opportunities in the developing countries and established more than 40 sales subsidiaries worldwide.

The group has acquired a significant market share in Germany. Other important markets include France, the Benelux states, Austria and Scandinavia, where Villeroy also operates a production plant. In relation to plans for the future, Mr Hideg said, “Our strategic objective is to adjust our product mix so that Villeroy & Boch will receive the maximum benefit from our cost advantage. Our aim is to manufacture more valueadded products including the designer products requiring more complex production processes whilst meeting the required quality standards so that Villeroy and Boch can fully take advantage of our lower costs of production compared to its other manufacturing units in Europe. In addition, we are determined to maintain our 50 per cent market share in Hungary and would like to increase our sales of the premium Villeroy and Boch products in the coming years.”

Over the past decade the Hungarian production plant in Hódmezővásárhely has become a key player within the global operation of the German ceramic manufacturing group. Today every fourth Villeroy & Boch product is manufactured in Hungary; in fact, if examining the European production capacity, every third product is produced in Hungary. The company employs 950 people, who work mainly in production and its annual turnover amounts to €55-60 million.

This blend of design, innovation and quality combined with a skilled and cost-effective workforce has placed Villeroy and Boch Hungary Kft in an enviable position. Whilst many manufacturers are struggling to maintain existing requirements and having to reduce staff numbers Villeroy and Boch Hungary Kft are managing to face the future from a position of wellmaintained strength. n