In 2019, the revenues of Brano, the main entity of the entire group, exceeded 5.3 billion crowns. This was followed by a drop of almost three-quarters of a billion last year, from which the giant of the domestic “autoland” will not recover this year either.
“I was expecting a crisis. Therefore, I have already set the company’s budgets to lower numbers than we had in the past. Brano was set at 4.9 billion sales from the previous 5.2 billion. At the end of the year, we will be about 4.7 billion, “says Juříček. The former entrepreneur of the year expects an increase in employees’ salaries from next year – they should improve according to how successfully the divisions in which they operate have met their budget targets.
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Brano supplies carmakers with a wide range of car parts, from door or cockpit systems to shock absorbers and horns to handbrakes. The most poisonous ingredients of the “deadly mix” that suffocates the company are sharply rising energy.
“Energy costs have increased sevenfold. We had an extremely advantageous three-year contract for 24 euros per megawatt-hour, now we have 151.4 euros, “explains Juříček. The company calculated with an increase in prices. But with half.
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Brana’s total annual fixed costs are about a quarter of a billion. “I crossed them out by a quarter this year, so he saved about sixty million,” Juříček continues. He would like the same savings from the incumbent Minister of Finance and party colleague Alena Schillerová (ANO). That is why the businessman did not run for the movement again in this year’s elections and said goodbye to the Chamber of Deputies.
The producer partially responds to the increase in inputs by increasing the prices of its own products. Both for automakers, where it projects more expensive materials – steel or copper – and supplies to the construction industry.
The company’s investments are to come out of the downturn. Brano spends about 220 million a year in the Czech Republic alone and is preparing for a resumption of production at higher volumes. “Chips are just the tip of the iceberg. It’s about silicon, magnesium, cable harnesses or copper. We must be ready when these scarce materials run out. It will be a few jumps of ten to fifteen percent in order to balance the debt of the demand-supply ratio, “says Juříček. He considers the restart of production to be the most important milestone in the six-month horizon.
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Recovering from the pandemic blow, it is to help the company grow in the Chinese market. Even in the most populous country in the world, Brano manufactures and allegedly has “the first products of its kind in the world” ready for the local market. They are intended to cover the areas of the front hood, doors and more sophisticated parts in car seats.
“People want to be electronically controlled. We are going in this direction, “suggests Juříček. Camera systems, sensors and lasers are also increasingly used.
Suppliers are facing swelling costs at a time of significant weakening. The Association of the Automotive Industry (AutoSAP) expects up to three hundred thousand unproduced cars to fail this year. This represents approximately 260 billion crowns of sales that would otherwise land on the accounts of small and large car companies.
“Lack of raw materials, logistics problems and limited human resources are significantly pushing up prices for virtually all inputs. Rising costs are reflected at all levels of the supply chain, and the problem thus affects the entire market, and for most companies it is no longer tolerable to absorb rising costs, “says AutoSAP CEO Zdeněk Petzl.
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