Steklarna Hrastnik, a Slovenian manufacturer of glass products with a 150-year tradition, creates 95 percent of sales in 55 markets abroad. The company’s main markets are Poland, Italy, France and Germany, and their main selling advantages are special bottles of superpremium quality, which they aim to use to increase their share of the British market. But their ambitions do not stop there. “We wish to connect with a local partner in the United Kingdom in sales and post-sales activities,” says Andrej Božič, president of the glass division of Steklarna Hrastnik. The glassworks are located in Hrastnik, in Central Slovenia.
Andrej Božič is also a former president of the British-Slovenian Chamber of Commerce, which strives to strengthen economic relations between Slovenia and the United Kingdom. We talked to Božič about the importance of the British market for glassmakers, and about the possibilities that make Slovenia attractive to British investors.
Mr. Božič, as the former president of the British-Slovenian Chamber of Commerce, you have worked for the Swiss multinational engineering company ABB and for the Mondi Group, and you are now the president of the glass division for the owner of Steklarna Hrastnik, so you are familiar with the British market. Why is it important for Steklarna Hrastnik?
It is large, purchasing power is big and it is quality-oriented, which is very important for a manufacturer of special bottles of premium and super-premium quality. The largest multinational beverage corporations are located in the United Kingdom, and if a company such as ours is present in this industry, then it is one of the most important markets. We have been present there since 2013. And it is also a market where long-term cooperation is possible once you build the trust, as British buyers are very loyal. This is a great advantage. But this is possible only if your service has continuous quality, and that is why we are searching for connections with local partners in distribution and post-sales activities. This will additionally guarantee that our services will be optimum.
At the beginning of the year, you presented the company to manufacturers of spirit drinks in Glasgow. What connections have you created and what potential can you see in cooperation with manufacturers of spirit drinks?
There are 200 distilleries just in Scotland. We are happy that products from our table glassware division have reached established stores, and we would also like to open the door of beverage brands in the next two to three years. We are currently creating almost 60 million euros of income per year and we estimate that there is at least 10 to 12 million euros of opportunities per year in the British market. We are also satisfied with the sales of promotional glasses for drinks.
Have you also considered purchasing a factory in the United Kingdom?
At the moment, the best model for us for expanding into the United Kingdom is connecting to a local partner in the field of sales and post-sales activities, as post-sales service is of crucial importance in our branch. This way, we can use the power of the vast British market in an optimum manner. We are still searching for a partner, but at the moment we are focusing more on our new factory in Poland, which will partially supply the British market as well.
Are you also developing a business model for demanding buyers, such as the ones from the United Kingdom?
Steklarna Hrastnik is developing a “one stop shop” model, which means that we want to cover all the buyers’ needs in one place. The buyer comes to us with a basic idea for a bottle and our experts, designers and partners will develop, manufacture and decorate it, and we will also provide corks and the rest. The buyer only needs to fill it.
How far along are the plans for your new factory in Poland?
We need to increase our capacities to keep one of the leading positions as a supplier to manufacturers of premium drinks. Having several locations and improved capacities sends a signal that we are a safe and flexible provider, which will also reflect in bigger sales shares with leading buyers. We have sufficient demand and we have learned that, at the moment, Poland is logistically the most suitable for us to also supply the Russian market, Baltic countries and part of the British market. We will start with preparation for construction before the end of the year. There are many opportunities. The Polish are known for their spirits, and many multinational companies in the beverage industry have their filling facilities in Poland.
Steklarna Hrastnik receives most of its income by selling to reference buyers. How important are own brands for you?
We still achieve most sales with reference buyers, including acclaimed global corporations, brand owners, distributors and retail chains such as Hennessy, Heineken, Villeroy & Boch, Sainsbury’s, Bacardi Martini and many others who require the best quality. Cooperation with brand owners is very important for us as they are mostly customers that work with us in the development department.
The tableware programe is sold under our own brand, but we have our own catalogue of standard HighGlass spirit bottles in special glass packaging. We also have the HighGlass perfumes brand.
Last year, we entered the cosmetic and perfume packaging segment. We are very happy about that. One production line has already sold out, and we are already thinking about a new one. Our Polish factory will also have a cosmetic and perfume packaging line.
How will you build your visibility in the future?
In the future, we will be orienting towards connecting with partners to provide the perfect service for the final buyer rather than developing our own brands. We will also be increasing cooperation with established manufacturers of beverage brands. These days, consumers are more oriented to drinking less, but better quality. If the drink has quality, it also requires better packaging. This trend is strongly present for wine and spirits. We wish to offer the final buyer the exact product they wish for. The majority of drinks are sold as gifts and the buyer wants a gift to have quality, which is different, more personal. We are also talking about cooperation with the world-renowned manufacturer of crystal Swarovski.
Our other focus is on glass as environment-friendly packaging. I believe that governments of European countries will strive for glass packaging to replace plastic in the future, including for milk and dairy products. Our buyers are increasingly conscious and are willing to pay more for an environmentally friendly product. We must also be pervasive with new technologies and in following this goal. We are searching for and developing technological solutions that are friendly to the environment and users, and efficient. Our long-term vision is to melt glass without fossil fuels.
Where do you see Steklarna Hrastnik in five years, will the bottle still be your most important product?
With at least two factories in Europe. And we will redesign the existing plant in Hrastnik into a smart plant. Therefore, we are already working on all the processes that are required for the operation of such a plant. This way, we will also increase our responsiveness to the demands of buyers and our flexibility, and we will also improve our capability of manufacturing personalized products. We also have big plans in the future for our priority markets, the United Kingdom and USA.
You have been present in the British market since 2013, then Brexit happened. Will this affect your business on the British market?
It will, as the legal framework for doing business will change, but I believe that the European Union and the United Kingdom are aware of the importance of cooperation. So, I am counting on agreements of the transition of the United Kingdom leaving the EU. They will enable normal work. Brexit is a political issue and a challenge for businesspeople, to which we will need to adjust.
Every issue can also be seen as an opportunity; can Brexit also be an opportunity for Slovenia and for the United Kingdom?
There are still many possibilities for economic cooperation between the countries. Slovenia may be a small local market, but we are export-oriented. Slovenia exports 70 percent of its gross domestic product, which means that we have excellent contacts with partners in Austria, Italy, Germany, to mention only the most important.
Why could Slovenia be even more attractive for companies and investors from the United Kingdom?
We can provide excellent logistics support from our cargo port at the Port of Koper, close to the Slovenian-Italian border, and services all the way to Frankfurt, Germany, the Czech Republic, Hungary, Austria, Switzerland and, of course, the Balkans. According to statistics, 90 percent of the population in Slovenia speaks a foreign language, mostly English. This percentage is even higher in the business world.
We also have excellent broadband internet connectivity, not only in the main centers of the country, but also in the countryside, where there are attractive industrial zones with infrastructure. This is not only an opportunity for large but also for small British companies. Even in a radius of 10 miles from the main Slovenian airport, in Brnik, there are several trade zones in the northeastern part of Slovenia. An excellent labor force is also a great advantage of Slovenia. Relations between the countries are excellent. Many well-known people have visited Slovenia in the past year, including the Foreign Secretary of the United Kingdom, Boris Johnson, who came earlier this year.