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Steely Damatech focuses on long-term success
Afamily-owned company such as Damatech could be described as steely. That is to say it is tough and strong, much like steel, which is appropriate as steel is the focus of their business. They specialize in marketing heat-treated steel for wearing parts, the tool industry and machine manufacturing. They see themselves as a top supplier of heat-treated steel solutions and provide services out to a 500 kilometer radius. Although married couple Mateja and Darko Mikec, who are also metallurgical engineers, founded the company in 2004, they have been active in business only for the past 10 years. Yet their growth has at times been so rapid that it saw their workforce expand from 18 in 2016 to 28 just a year later. Over the last six years they have invested €5 million in development, 80% of which came from their own capital, and for the past two years the company was included in the official selection for the Gazela award for the Gorenjska region. They are currently in the process of restructuring their manufacturing plant, due to a lack of space and in order to provide greater efficiency, but sizeable resources also go towards digitization and new IT. General Manager Darko Mikec presents a clear goal on which they are completely focused - making €10 million in revenue by 2020. In cooperation with their customers and suppliers they strive to build long-lasting relationships and it is extremely important to them that this approach is applied to everyday practice. “Marketing steel is a marathon,” emphasizes procurator Mateja Mikec and adds, “but we work with experts who truly understand steel.”
By 2020 we want to achieve €10 million in revenue. This is pure organic growth that doesn’t require too many risks.
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Chapter 1
First supplies came from savings
They were both ambitious, keen to prove themselves and wanted to create something.
Both Mateja and Darko began their careers approximately 30 years ago in the technological department of Železarna Jesenice. Coincidentally, Mateja began hers in almost precisely the same location in which their company is situated today. In the early 1990s, when the economic system in the country began to change, both of them were searching for new opportunities. As Mateja puts it, they were both ambitious, keen to prove themselves and wanted to create something. They acted as each other’s support system. In 1999 Mateja concluded her international MBA studies, followed by Darko’s MBA a year later. Through their studies they were able to complement their expert knowledge with extensive management and leadership skills.
Even though the company began in 2004, both founders were occupied with other matters at the time. Mateja was responsible for kick-starting a Slovenian waste product management company called Interseroh, part of the German ALBA Group conglomerate, and Darko Mikec was then the General Manager of the Metal Ravne ironworks.
After the Russian takeover of Slovenia’s ironworks, Darko recognized that he possessed enough expert metal knowledge and had sufficient entrepreneurial spirit to be confident in starting his own business. In 2008 he invested all of his savings and severance pay funds into acquiring his first supply of steel and by doing so he jump-started operations in Damatech. In 2015 Mateja joined him to help lead the company.
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Chapter 2
The company’s foundation - a strong connection to Sweden
“My husband is an expert when it comes to using steel in machine manufacturing and in the tool industry.”
Why steel? “My husband is an expert when it comes to using steel in machine manufacturing and in the tool industry,” Mateja explains and adds, “by using his vast experience and abilities he was able to form excellent business ties to the Swedish steel plant, SSAB. Their steel represents 80% of our sales. This steel is modern, innovative and all its varieties have outstanding characteristics, ensuring the user has both a good competitive advantage and is able to save money.”
Damatech is based in the Slovenian town of Jesenice, but their specialization is such that they are focused on trading in Europe, especially in Austria, where they have set up a branch office, and in Germany. As Mateja puts it, they have managed to form solid business relationships with their clients and have created a strong combination of excellent service and product quality. It is this bond that creates most of their revenue, building trust as a foundation for lasting partnerships.
They began with simple cutting and distribution of heat-treated steel, which has developed into tool manufacturing as molds and in foundry casting of plastics and aluminum. Even more often, their steel is used in machine manufacturing, mostly as machine parts normally exposed to great loads, high pressure and wear, thus presenting a weak link that needs to be changed regularly. “Our biggest buyers are the ones who are aware of the fact that their competitive advantage lies in quality and not in the price,” Mateja and Darko Mikec explain.
Currently they have three production lines. The first consists of sales of standard quality steel which is cut with large saws - in fact one of the largest in the area. The second line provides services to customers who come to them with their own material and plans for cutting. These customers include Austrian Ironworks and Acroni Jesenice. The third production line is made up of their own finished and semi-manufactured products.
The selection of cutting machines is also quite impressive, including straight-cutting, shape-cutting and water or plasma jet machines. These are all digitally- controlled, CNC machines which are programed to produce a finished product at the end of the manufacturing process. The third group of Damatech’s mechanical equipment is made up of four CNC-treatment and processing plants where they produce specific machine elements such as industrial knives and axes, usually used as spare parts. With their extremely short delivery times, they have managed to convince even producers who need to supply users with original spare parts at very short notice.
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Chapter 3
Growth through loyalty and fair relationships
The education process in itself is very lengthy and very demanding.
Damatech currently employs 28 people. Darko explains how profiles matching the company’s needs are practically non-existent in the job market today and how they need to train their staff themselves. “In order for young people arriving from technical schools to upgrade their general knowledge with more specific knowledge we need to work with them quite a lot. The education process in itself is very lengthy and very demanding. And that is in part why we aim to keep these skilled workers for as long as we possibly can.” They strive to be recognized as fair and motivational employers, one of their goals being that the staff search for better wages within the company and not elsewhere.
“We want to offer our employees the best possible working conditions, an optimal wage and good personal relationships. Our values are very traditional and include a good work ethic, loyalty to the company and fairness,” Mateja explains. Since they have a high regard for family values they have tried to include the employees’ family members into the story as well. This can be seen on various trips and family picnics. “But the simple fact remains, we are business people and in the end the balance sheets need to be positive,” says the Deputy Director.
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Chapter 4
Never let success go to your head
For me it is a pleasure to work in the family business because this enables me to be part of a tradition that began with my parents.
How about members of the family? Their daughter’s husband Damir Ejup Mikec joined the company soon after it began. Having a master’s degree in Organizational Sciences, he is responsible for managing the ISO 9001-2015 quality standards, shape-cutting and dealing with sub-contractors. Eva Mikec first studied in Austria and then acquired her master’s degree in Business Sciences, with an emphasis on family employment, from a business school in Germany. She joined the company five years ago and is Head of Domestic Sales.
Both owners feel that family members make the most loyal and reliable staff members as they have a special connection to both the work and the company. For them it is not just another job. Eva confirms this and says: “For me it is a pleasure to work in the family business because this enables me to be part of a tradition that began with my parents. Because of this my loyalty and responsibility towards the company are greater.” Her husband Damir feels the same and explains how working in a family-run company affects his motivation. “It’s not work for the sake of working but work somehow represents family.”
In order to be able to draw a line between the affairs of the family and the business, there must be a great deal of emotional intelligence among all the family members. Darko and Mateja Mikec agree that they also had to go through an adjustment period, during which Darko was skeptical that they could both run the company. Mateja points out that they now have their individual functions and she aims to support him in his role as General Manager. What is important is to have a strong and balanced personal relationship which then translates into a functioning business relationship.
It requires a great deal of discipline to be able to balance the family and business aspects of life and to avoid spending all your spare time discussing business. It is very important to be around people who are not members of the family business. “The older we get, the greater the need to spend some time away from the company. We have a good team of people around us and we trust our employees. Whenever Eva and Damir are at the company we can be at ease,” Mateja explains. “The company is not a member of the family, it is a product of it. Buying bread, so to speak, is never a problem. What is a problem is taking a night off. You can quickly lose yourself in a story of success and let it go to your head. You need to remind yourself to return to being just a regular person who has been fortunate on the one hand and who, on the other, has a great responsibility towards the company and making sure it operates well.”
Darko and Mateja Mikec, co-founders, owners
Company name: Damatech, d. o. o.
Number of employees (2017): 28
Net sales revenue (2017): €6,511,784.95
Interviewees:
Darko Mikec, General Manager
Mateja Mikec, Deputy Director
Eva Mikec, Head of Domestic Sales
Damir Ejup Mikec, Technician in charge of Shape-Cutting
Summary
Damatech in five words: family values, responsibility, loyalty, fairness, work ethic.
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