The year has only just swung into its second half, and Explosia can already sense that it’s going to be a special year. The traditional explosives manufacturer from Pardubice has taken off after lean years and is aiming for a profit of over 100 million CZK. The company’s new management could give themselves an imaginary pat on the back, but Explosia’s chairman of the board, Radomír Krejča, rejects this in the interview.
INTERVIEW WITH RADOMÍR KREJČA, CHAIRMAN OF THE BOARD OF EXPLOSIA COMPANY
Traditional market fluctuations are experienced by all companies, not excluding those involved in the production of explosives. How does Explosia see it?
Krejča: It’s true, we see those fluctuations in roughly five-year cycles. We therefore try to keep the production of Explosia standing firmly on the following four pillars: production of explosives, smokeless powder, special products and fully combustible modules. When one segment fluctuates, the others are able to compensate for a while. However, in recent years, we have managed to withstand fluctuations and the numbers of both turnover and profit are steadily increasing.
So what attracts the most or least interest at the moment?
To give you an example, we are currently dealing with a decline in interest in classic industrial explosives that are used in quarrying. They are often replaced by the application of emulsion explosives directly into bores using charging trucks. And so we invested in new charging trucks and in equipment intended for work in quarries in general. There is an enormous demand now for smokeless powder, where we have contracts until the end of next year. The military conflict has led to increased interest in our explosives, and we have supplied products worth more than 150 million crowns for the defence of Ukraine.
It sounds like sunny days for Explosia, but it won’t be that simple, will it?
That’s right, there is no time for glowing smiles and contentment. We are constantly figuring out how to move production into the 21st century. Investments over the past decades have been significantly undersized, but in recent years we have been investing over 100 million crowns every year. We are currently dealing with the ever-increasing prices of energy and raw materials, and there is also pressure from the trade unions, which are trying to get as much as possible for the employees in today’s difficult times. And because we value our employees, in the last two years we have agreed to pay a 13th salary for the first time in the modern history of the company.
So what is behind the success of Explosia?
Honestly, probably the straightening of the market environment within the company itself, which we restructured three years ago. There was a change and overall slimming of the management, the number of employees was reduced, and labour productivity increased by more than 30 percent. We focus on quality rather than quantity. This is also why Explosia has been able to cope with the ever-increasing and stricter requirements for product quality, which has also led to a decreasing number of complaints. Four years ago we dealt with twelve complaints a year, three years ago eight, two years ago five and last year only two out of more than two and a half thousand completed business cases per year. Any doubts about the quality of our products are therefore either based on insufficient information or, from my point of view, unfair competition.
So how much success does Explosia expect this year?
If business continues as it has so far, I am convinced that we can successfully exceed the 100 million crown profit mark, which would be the first time in the 20 years of Explosia’s existence as an independent joint-stock company. And here it is appropriate to thank our people, who take their work very seriously and care about Explosia.
We have been talking about the last few years, and you yourself mentioned that successes and difficult times alternate. Are you not expecting a worse period then?
We can expect anything, but how the market will actually develop is difficult to predict. It is affected by the rising prices of energy and raw materials, higher personnel costs, and on top of that no-one knows how long the war in Ukraine will last and what it will bring. We therefore strive to ensure that the company runs in such a way that these fluctuations do not threaten it, that our people are always sure that they will receive a salary, and that our customers can obtain quality and time-tested products.