The marketing strategy of Podpolianske strojarne, a.s., Detva (PPS) could until recently be characterized with the words "Water is too cold for us to dip more than our fingers into it." Indeed, the defence conversion and the breakup of Eastern markets have driven the engineering giant below Polana on the defensive and capitulation to more aggressive and successful competition of West European and Asian firms. Last year, the ice finally broke.

In 1998, the state-run joint-stock company producing loaders and fork-lift trucks, reached for the first time from 1989 an income and turned out 1.048 billion Sk worth goods, which was up 30 % from the previous year. According to the PPS General Director, Ing. Peter Duris, the firm has concluded for 1999 contracts for 750 million Sk worth products, of which 80 % are slated for exports. The prospectus envisages to produce 1.25 billion Sk worth goods and and sell products totaling 1.5 billion Sk, that is to place on the market even a segment of the already realized production. A prospect plan for the forthcoming period is to bring production at PPS up to 2.5 billion Sk annually. The Detva engineering mill's primary customers include the states of the now-defunct Soviet Union, Poland, Hungary, and the Czech Republic.

A breaking point in the PPS existence was a transformation of the state-owned enterprise into a state-owned joint-stock company in 1996. While PPS was bailed out in 1993, it posted up as of the date of transformation unpaid bank credits totaling 850 million Sk, a debt of 2 billion Sk, and most employees were taking a forced vacation on a 60 % wage compensation basis. In 1997, a production generated loss achieved a further 390 million Sk.

To prevent a full winding up of the company through executors, we established in late 1997 a subsidiary, PPS Holding, and the property unburdened with obligations was transferred thereto," stated P. Duris on the post-transformation situation in the company. "The new firm has proved its viability by way of 1998 results," he stressed. Purposefully linked to the purchase of components to manufacture axles for Karosa Vysoke Myto, an advantageous credit from Eximbank totaling 95 million Sk was conducive to the revival of production. A 102 million Sk contribution made by the Regional Labour Office in Banska Bystrica toward wages and transfer payments to insurance funds also had a favourable effect in this respect. Thanks to the sum employment was maintained at 2,410 persons. Thereafter, 100 new employees were hired later owing to the extension of the production of loaders.

Slovak Trade FORUM