You can also listen to the interview in the audio version.
873 million crowns in sales, 250 million in profit before taxation. The Marlenka company had record results last year and is solving a problem that some companies could envy. She has already sold out of her products by the end of the year, so she had to postpone a lot of plans for now.
Precisely because of the need to increase production, Marlenka recently auctioned the “historic gem”, Lemberger’s textile factory, in Frýdek-Místek, where it is based, for one hundred million crowns. In the first stage, he is planning four production lines there, which will double the production of cakes.
In the optimistic version, it should be completed within two years, in the pessimistic version in four years, the total bill should be 1.5 billion crowns. However, it is already clear that even before that, the company must buy or rent at least one production factory.
“Last year we achieved 20 percent growth. We are being pushed a little bit by the shoe, because we have had this high growth for a long time. We were a bit pessimistic and expected that growth would stay around ten percent for five years and that the existing hall would last us four or five years. Unfortunately, quotation marks are no longer enough and we have to speed up,” says Nshan Avetsijan, representative of the Marlenka family business, in an interview with SZ Byznys.
The company urgently needs to increase production capacity. “Today we are dealing with the issue that before we complete the Lemberger factory, we will expand somewhere else in the meantime. We are looking either to rent or to buy. We need something that already stands and is close to us. We will set up lines for honey balls there. The technology for honey cakes is much more complicated,” adds Avetisjan. One such line represents an investment of 100 million crowns.
The great demand is mainly due to interest from abroad, where more than 70 percent of the production goes.
“Today, we are growing at a high rate in Korea. Last year we exported around six containers a month there, for this year it is double. We are also doing well in Germany, where at the end of last year we had initial shipments to Lidl, and this year we are planning Penny and negotiating with other chains. To be honest, we’re holding it back now,” adds Avetisyan.
The two biggest stores in the world
Marlenka has recently entered one of the largest chains in the world – Costca in Japan – and is heading to the world’s number one store – the American Walmart.
“On the international field, Costco is a prestigious chain, so we also have demand from American Costco, and currently we also have demand from American Walmart,” confirms Avetisjan. “We have really ambitious plans, in ten or twenty years we would like to be in the international field of perception where, for example, Ferrero or Mars and these companies are,” Avetisjan explains.
At the same time, the company already delivered to Walmart once, supplying Canadian branches through a partner. “I think we could have grasped it better then. The demand for that product is still there, but at the moment we are the ones who are holding back,” adds Avetisjan. Marlenka also operates in China, but the turnover is not very big there yet.
“For now, China is not a strategic country for us, but as South Korea grows, where we will also enter chains, and by heading to the Japanese Costco, we will strengthen there as well. The entire South Asian region is interconnected, and chains operate there with the same brands. Results in one state automatically mean entry into the next,” Avetisjan explains.
The company already directs roughly 20 percent of its turnover to advertising. The TV campaign is running in ten countries, which helps with brand awareness. “Of course, tastes and perceptions of products are a little different in each country, but in each market we have partners who know more about that market, and we get advice,” he adds.
Demand also rose in the Czech Republic last year. The company originally planned to build a network of its own shops and cafes here, which was also interested in franchising from abroad. But now she has had to put those plans on hold – she doesn’t have the goods for them.
“We are dealing with the more pressing issues right now, and that is capacity, so if we don’t have this resolved, we won’t stand firmly on the ground and know that capacity won’t hold us back, which is a priority, so we diverted that idea,” he adds.
