RELAYING SUCCESS

RELPOL S.A, from Żary, Poland- is the largest manufacturer of electromechanical relays in Poland and one of the leading companies on the European relay market. Interview with Mr. Bartłomiej Szydłowski –Sales/Marketing Director and Board Member, it will bring everyone closer not only to the history of the company, but also to the strategy and vision, and above all, plans for the present and future years.

The history of RELPOL. What are the origins of the company?

The company has its beginnings in 1958. On 1st of January 1965 the company became a part of MERA-LUMEL Lubuskie Zakłady Aparatów Elektrycznych. The company became fully independent in July 1982, when the Zakład Przekaźników in Żary started operating. In December 1990, a decision was made to privatise the company. In 1996, as the 55th company in Poland, the company debuted on the Warsaw Stock Exchange. The Relpol brand, known for its design quality, flexibility, and product customisation, proved to be very competitive with Asian manufacturers.

Originally, Relpol S.A. specialised in products for the reconstruction of industry and the energy sector. It mainly manufactured large electromechanical relays, such as the R15 series, which is still well-known to many engineers.

What is the secret of the company’s success in summing up its experience and activity on the market?

The basic factor in Relpol S.A.’s success is its flexibility in relation to business partners, the availability of our products to a wide group of recipients through the distribution market, a solid European brand built up over many years of quality and reliability on the Polish and European markets, as well as the technical and technological knowledge, experience and commitment of its employees.

However, an important role in the business success of Relpol S.A. is played by the range of products on offer, as relays intended for the power and industrial automation sectors formed the basis of the company’s offer.

What is the current position of RELPOL S.A. on the domestic and European markets?

We supply our products to many foreign markets (more than 50 countries). 70% of our turnover is export, the majority of which is in Europe. While we sell domestically through local distributors and reach out directly to OEM customers, in the case of exports our strategic partners and distributors are key. Our annual sales are approximately 31.3 million Euros (2023), with more than 90% of our turnover achieved in Europe. In particular, we sell on the German market, which accounts for 39% of our revenue, and in Poland, where the proportion of total turnover is 32%.

The business environment is currently uncertain. What tools are necessary to maintain business stability?

It should be remembered that one of the strategic entities for the capital group is the factory in Ukraine, which has already reached almost full production capacity from the start of the war until today. Nevertheless, the situation is very dynamic and, given the military activities, this may change at any time. On this basis, decisions are taken to minimise the impact of negative factors and to safeguard the company against these risks in the future. One example is the construction of a twin machine park at the factory in Poland, which is currently being used at the plant in Ukraine.

This is to safeguard the continuity of the production process against a possible escalation of the conflict, which could halt the operations of the Ukrainian factory.

What investments increasing the company’s production capacity and competitiveness has RELPOL made in recent months?

The ongoing major investment of a production line for industrial bistable relays is scheduled for completion in 2024. We consider this project to be very innovative, as none of our competitors has such a product on offer. The task of this product in practice will be to reduce the electricity consumed in the supply of power switchgear and control cabinets in industrial automation processes. This is a large project worth more than 31 million PLN, thanks to which we will be ready at the end of 2023 with the new product and the entire process of its automatic production. There is also an interesting project in progress for a critical rail infrastructure relay, which is currently in the design phase. This is also a funded project with a total value of nearly 8 million PLN.

What factors distinguish RELPOL’s offering from its competitors?

By focusing on quality, completeness of assortment, as well as flexibility of production itself, Relpol SA strives to create a competitive advantage in relation to the largest companies on the market, where gigantic amounts of money are invested in production automation. With a much smaller production scale, Relpol is a recognisable European brand. Production processes are based on the best materials supplied by European suppliers, which, together with the flexibility of customer service, allows us to remain competitive. We plan to open up new sales prospects in the future in markets where our share has so far been very small, with the USA being one example.

What is the selection of the right raw material (relays) and how does their manufacturing process work?

Relpol SA employs over 50 engineers, about 20 of whom work in R&D departments. The accumulated constructional and technological knowledge allows us not only to create new product groups and continuously improve the current ones, but also to flexibly adapt products to emerging needs. The company has its own test laboratory, where a few tests are carried out with the products. We test mechanical cycles, shock, and vibration resistance, check electrical parameters and the impact of environmental parameters through the use of climate chambers.

The most important to the manufacturing process is the selection of the right raw materials, which must pass several tests during the production validation process before they can be used. Only positive results allow a given raw material to be used in production. Relpol S.A.’s production process consists of several stages, which are always completed with a 100% test of semi-products or already finished products. It should be noted that each product is subjected to 100% quality control in terms of electrical and mechanical parameters.

What is the company’s current strategy and, above all, for the next few years?

A long-term strategy was designed for Relpol S.A. in the previous year. The objectives set in this strategy are based on investments in building bigger production capacity and market expansion (mainly export) to take advantage of production opportunities. Expansion of the machinery park and investments in new production technologies are an ongoing process resulting from the company’s outlined plans. However, the company’s commercial offer will also develop goods that will complement electromechanical relays in practical applications.

The company’s management is also focusing on building employee awareness of the challenges the company faces. This is aimed at awakening the initiative for ideas and actions that will help the company to overcome adversity.

Exports - what share does it have in the company’s production/sales, as well as the main export markets.

Foreign markets for Relpol S.A. account for the largest percentage share of the company’s revenues - approximately 70%. Currently, the company is experiencing sales growth in this channel, however, the key challenge is to cover the complete suspension of sales in the markets of Russia and Belarus. Significant growth is being generated in other territories, mainly in Germany, where the key markets are energy, renewables and the booming electromobility industry. The plan for the coming years in export sales will be to continue market expansion in the area of new countries and new industries.

How many people are employed by RELPOL S.A. and what profit/turnover the company generated in 2021/2022?

There are two factories in the Relpol S.A capital group - in Żary (Poland), where approximately 500 people work, and in Ukraine, where more than 306 people are employed. Relpol generated

146.5 million PLN in sales revenue in 2022, an increase of 14% compared to 2021, with sales to the domestic market increasing by 18% and exports by 12%.

What are the company’s vision and mission for the coming years?

The budget plans for the coming year include several key operational activities, such as process optimisation in all areas of the company to reduce costs of electricity and heat consumption, monitoring of the situation at the production plant in Ukraine, implementation of investment schedules and active commercial activities to acquire new projects to cover production capacity. In the coming year, new product series launches are planned, such as a new series of modular contactors, which will be broader than the current one with additional configurations and a wider range of switching capacities. Our most important priority objective in the design and technology strategy is to search for market niches where the need for specialised electromagnetic relays is expected to grow rapidly in the coming years. These areas should also be specific enough that our competitors will not be interested in them.

For more information, visit: www.relpol.pl/en