Massive has so far been exported to the Western European market, but after Trokut recently equipped the Stella Maris apartments, inquiries are increasing, and the new market could become – domestic
Written by: Matilda Bačelić
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Photo: Željko Jelenski
That furniture made of solid wood does not have to be a sign of bad taste and old-fashionedness and that Croats can produce kitchens identical to those in Italian magazines has been proven by the furniture factory Trokut d.d. from Novska. The company has a long tradition in furniture production and is one of the few and much-desired finalists in the Croatian wood industry, but it has lacked a recognizable image and design. From an unremarkable prospect to kitchens that would hardly compete with modernly designed Italian manufacturers, Trokut d.d. has so far fit quite well into the mostly dismal picture of the entire domestic industry. However, a significant plus for Trokut can be noted in the high percentage of exports, even from 85 to 90 percent. Both of Trokut’s production programs – solid furniture and kitchens and kitchen fronts – have recently recorded positive shifts.
Business with Stella Maris
Heavy solid wood has so far been entirely exported to France, where there is a high demand for this type of furniture, primarily intended for houses and larger spaces, but after Trokut, in collaboration with the company Silva from Umag, recently equipped about 180 Stella Maris apartments of the Umag Istraturist with ash solid wood in a rustic style, there are more and more curious inquiries, and the new market could become – domestic.
– The problem with solid furniture in Croatia is our perception that what is traditional is not good – says the CEO and one of the largest shareholders, Damir Perić.
– Fashion is dictated by the Italians – he adds – who do not produce solid furniture. The Croatian wood industry can profit from this because solid furniture is quality and expensive. Costume jewelry can be beautiful, but it is known that gold is much more valuable, but it is best when gold is also beautiful. When it comes to furniture, Italians often sell us costume jewelry at the price of gold – Perić vividly described.
Poor design is often emphasized as the main problem of the domestic wood industry, but Trokut has solved this problem not by reinventing the wheel but by using the knowledge and experience of those who know best – the Italians. The new kitchen line Project Design, aimed at the highest price range, was created in collaboration with Trokut’s partner Snaidero. The design for solid wood intended for the French market comes from a French buyer, but Trokut is soon preparing to enter the English market on its own after honing its craft in France.
– Now we will sell this modified design under the Trokut brand and at a price 30 to 40 percent higher – says Perić. Trokut distributes its final products to both domestic and foreign markets through Exportdrva. Until recently, the main export market was Germany, but recently France has taken the number one title, to which 70 percent of production is now exported. Trokut was established as a carpentry craft cooperative Stopoza back in 1949 and has grown over the years into one of the largest manufacturers of kitchen furniture in the former state with 800 employees and very good business results. The then stable, positive trend in business was interrupted by dramatic changes – war and the transition to a market economy. The war damage was summed up at 16.5 million German marks, production decreased by 50 percent, and the number of employees fell to 250. Production was not interrupted at any moment, but the company lost step with the market, financial problems became an increasingly heavy burden, competition moved far ahead, and technologies, business organization, and design trends continued to evolve. To cover war damages and continue production, Trokut was forced to use short-term loans with high interest rates.
Partnership through joint venture
Exhausted from patching holes in business and unable to invest in development, relying solely on its own strengths, Trokut would certainly have a hard time getting back on its feet. The management realized a few years ago that it was necessary to find a strategic partner who would enable the company’s development and be a solid foundation for conquering domestic and new foreign markets. By a stroke of luck, the strategic partner became one of the largest kitchen manufacturers in the world, the Italian Snaidero, whose annual revenue of 350 to 400 million euros is greater than the total revenue of the entire Croatian wood industry. Until then, Snaidero exclusively purchased kitchen fronts worldwide but had a problem with the quick delivery of small series.
Negotiations began in 2005, and instead of a classic takeover by purchasing ownership shares from existing shareholders, the partnership was realized through a joint venture agreement. Namely, the cautious and experienced Italians preferred to choose a greenfield investment and establish a new company with Trokut rather than enter the ownership of an existing company because, like many other foreign investors, they did not trust what lay behind the numbers in the balance sheets of domestic companies. Trokut thus remained in the ownership of the existing 400 shareholders, among whom the largest are Ante Đerek and Damir Perić. In the newly established company Slavonska drvna industrija d.o.o. in Lipovljani, Snaidero’s ownership share is 80 percent, while Trokut holds 20 percent.
The primary goal of this investment is to build a new factory for solid and veneered fronts to supply all kitchen factories in the Snaidero group system, but also Trokut, which accounts for 30 percent of production. Trokut now obtains semi-finished products and raw materials for its final products exclusively from the joint factory in Lipovljani and no longer deals with the production of sawn timber. In the new factory, it is expected that 750,000 fronts will be produced annually, fully intended for export, with a turnover of 11 million euros and 220 workers, half of whom will be newly employed. The company started operating last year, but it is still far from the desired production phase and revenue generation, which is attributed to the growing pains of a startup. However, this move meant much more to Trokut than just entering into a partnership with a strong global player who can also drive its growth.
