Incredible story. A bit of a thriller. Imagine buying a company because you fall in love. Not someone, but something. The products that company makes. You discuss everything with your family. You buy the company, and then the blow comes. Lockdown. And then another. A steep rise in energy prices. And you've got a tap!
This is the story of Český smalt and its new owner Jan Novák. A lifelong businessman who could have retired, but became a factory owner. The owner of the only enamel factory in Bohemia that enamels cast iron.
It's inspiring to hear stories of people who don't collapse at the first setback. They are heartbreakers. That's why I invited Honza to Zážeh to inspire you and talk to him:
🔸 What can be used from retail in production?
🔸 The story of Czech Enamel.
🔸 Where is there more potential - in B2C or B2B?
🔸 How to get employees excited about a new strategy under a new owner?
TRANSCRIPT OF THE INTERVIEW
Martin Hurych
Hello. I'm Martin Hurych and this is Zážeh. Today's Zážeh is going to be candy, because it will be about saving a traditional craft with Jan Novák from Český smalt. Hello, Honza.
Jan Novák
Hello, Martin.
What can be used from retail in production?
Martin Hurych
As I was preparing for today, I found out that you've spent your entire career in retail. Now you'll soon have the title of factory worker. Tell me what connects the two industries. What can you use from retail in manufacturing?
Jan Novák
That's a pretty tough question right off the bat. I would probably say that no production can do without trade. What's the point of producing if you're not going to sell it. So you can use there building a network of buyers, talking to people, worrying about whether your product has any chance of succeeding in the market, pricing or margin policy. Now that I think about it, there's a lot of things.
The Story of Czech Enamel
Martin Hurych
So let us briefly introduce yourself, Czech Enamel and I am very interested in the journey from retail to production.
Jan Novák
Now that's an adventure. I should probably say that I am a graduate of the University of Economics, majoring in foreign trade. I really haven't done anything but retail my entire professional career. After '89, I went into furniture sales. Then I was approached by a food company that I was handling the stores for. It was a chain that was just starting out, so I got a whiff of the grocery business, which is a big deal. In 2000, I joined Salamander, which has been with me for 20 years. They were wonderful years. I started with three stores, eventually we built 15 stores in the Czech Republic, 5 in Slovakia and I added Poland. So it was really a ride until suddenly the material got tired. Both I and the company felt that we didn't have that much to give each other anymore. For this reason, we parted ways in 2019 by mutual agreement and in a very friendly spirit. When I was done, I thought I'd take some time off. I'm going to spend time with my family, sports, entertainment and most importantly, myself. However, I couldn't do that because I had nothing to do at home for days and one day I mentioned to my doctor, whom I see regularly, that I was no longer with Salamander. I told him that if he knew of something where I could have fun and not be stressed, I would be interested. I said I wouldn't be expensive, I had some experience and maybe I could help someone in some way. The doctor nodded his head and 14 days later I heard back from him saying he knew of something. He knows I live in Beroun, all my life I have always taken the D5 motorway and left to Prague. So he asked me what I would say if I came out on the D5 and didn't turn left but right. There is a logistics complex not far from me, owned by a freight forwarding company, and within that complex is an enamelling plant. The freight forwarding company must have bought the enamelling plant along with the whole site. The freight forwarding company is a freight forwarding company and they have neither the desire, nor the know-how, nor the interest to run an enamelling plant, so they are looking for someone to look at it, advise them and help them develop it. So, in September 2019, I went to the freight forwarding company and entered the enamel factory for the first time. I have to say, it didn't take long for me to fall in love. That was terrifying because that's when your heart starts working instead of your head. So I told the owner of the shipping company that I would love to do enameling. I had done some research beforehand, finding out what enamel was, who was doing it, how it was spread in Europe and so on. I told him that it would take some time and some money, because it was going to take some investment. I already saw the packaging, the labels, the branding in front of me, but it all takes time and time is money. So I pitched him my idea and he looked at me and said we didn't understand each other, he didn't want me to spend his time and money, he wanted to do something about it day to day. I told him that I couldn't do it, that I couldn't imagine it and that I wasn't a magician. And so we parted ways. It was October 2019 and the owner contacted me again. He told me that he had thought about it and had only come up with two options for further development. The first option was that he would sell the machinery, lay off the people and use the sheds that belong to the premises for his logistics. The second option was that he would make me a price and I would buy it from him. I told myself that I was in love, but this was not how I imagined my future after Salamander. The whole thing was further spiced up by the fact that the condition of the purchase was that we would commit to contracts and everything else before the end of 2019, which would close out the business year for the enamel plant and from Jan 2020, I'll be the new owner. I didn't sleep for 14 days, I consulted with my family, because it was clear that there was no sign of peace and that if I was to fulfill what I had dreamed and fantasized about, I would need some financial resources. I got some severance money from Salamander for 20 years of work. So the financial cushion was to become money to start a new business, which I had to consult with my family, of course. Thanks to the fact that I have a great wife who saw the struggle in me, she said that I had done enough work for other people's companies and that I shouldn't deal with the money and go for it. That almost brought tears to my eyes. After that there was no time for anything, practical steps had to be taken to take over the machinery and equipment, because I didn't want to buy the company as such, so I started a new company. I called it Czech Enamel, and Czech Enamel bought the machinery and equipment for its business from the former owner.
all kinds of things, and suddenly it was mine. I was very excited, but at the same time it was a huge commitment. I had three whole staff members looking at me in disbelief about what I actually wanted to do with the company. Of course, I talked to them before January 1, but there was still some mistrust. So we gradually found our way to each other until we finally found it.
Straight to lockdown
Martin Hurych
I'll just remind you that we're talking January 2020. What happened in March? Actually, to recap what happened to all of us.
Jan Novák
We all know that, 1.1.2020 start of Czech Enamel and 14.3.2020 lockdown. I have to say it was a great event. I can't imagine what could have happened worse. The workload of Czech Enamel depended on orders that were continuously coming in from people or companies. There were never many orders, something was known about us, but not much. After 3/14 we suddenly went from a few to zero. Those were terrible times. I'd go to the enamel, open my emails and maybe 5 would come in a week. Having been used to 50 or more emails a day from my previous job, I suddenly felt like I was in a whole different world. I said there's nothing we can do and we'll get through this. We went anti-cyclical, so instead of starting to save and feel sorry for ourselves, we started cleaning up. We had plenty of time to do it because we had no orders coming in. So the workshop got cleaned out, three containers of accumulated treasures got hauled away, the workshop got renovated, and we built a dumpster. We also built a new shop, a kind of showroom, so that we didn't have to show people things in production, but we had a decent environment for them.
The origins of foreign trade
Jan Novák
During April, May, units of orders started to turn from zero. So we were gradually getting out of the worst situation. Because I had been in close contact with German-speaking countries for the previous 20 years at Salamander, I had accumulated some friends and acquaintances there with whom I was in regular contact. They asked me what I was doing and how I was doing, so I told them all about it. And with one such friend, whom I will never forget, who did an awful lot for me at that moment, I agreed on something. He told me that the enamel was fine, but if I didn't feel that the Czech pond was a bit small after all and if I wanted to think beyond the border. I told him that of course I would love to, but I didn't have anyone to take care of it for me, plus it was impossible to go anywhere. He told me not to worry, that he had some free time, that he was also quite interested and would look around their market. And strangely enough, everywhere Martin turned he was told that they would be interested, or they couldn't at the moment because of the lockdown, but they would be happy to come and see the production afterwards. So no sooner had the borders opened around mid-June 2020 than I had visits from three, four, maybe five German companies in Osek. To my great surprise, they all told me that they would like to invent something together.
What does Czech Enamel do?
Martin Hurych
We should make a small insertion here and tell ourselves what enamel is, where it is used and what the market looks like so that we can understand what you have in your hands and why there have been such positive reactions.
Jan Novák
I would start with what Czech Enamel has in its production portfolio, it is quite important. The reason I bought Czech Enamel and what I fell in love with is enamelled cast iron cookware. We could talk about it for a long time, but enameled cast iron cookware is like grandma's. The dishes that Czech Enamel has in production today are replicas of dishes from the turn of the nineteenth and twentieth centuries. There is a foundry not far from the Czech Enamel, called Železárny Komárov, which specialized in casting cast iron utensils and moulds. There is still a museum where these moulds are on display and it is an incredible sight, a thing of beauty. We make about 10% of this historical heritage. I could go on, if I see interest, there is room to expand in the range. The second thing is cast iron renovations, renovations of cast iron cookware, cast iron garden sinks, cast iron sinks, double sinks, in short, everything that was once in every home. Today it's either in the scrap heap or people have it in their attics, cellars or overgrown gardens. These renovations caught my heart because I am somehow patriotic and couldn't imagine just throwing these treasures away and scrapping them. We are the last factory in Europe in enamelling cast iron renovations and I have not found another enamelling factory in the world that offers cast iron renovations. So that's the other main thing, enamelling tin signs, street names, house numbers, signs for grandma and grandpa for their 50th birthday, whatever people send us we're happy to do. The last thing, and this was the thing that was of great interest to German-speaking companies, is something we call technical enamelling, but it's actually wage labour. To this day, there are a lot of products that have to be enamelled in order to be used. But there are no enamelling factories, and let's talk about why. Enamel is still unsurpassed, the best anti-corrosion protection for metals. Once upon a time, everything that came in contact with water, whether it was faucets that went underground, whether it was sinks or garden sinks. There were no paints, there were no powder coating plants, so to keep it from corroding it was enamelled. As time went on, innovations came along, and a lot of people said why enamel it for expensive money when they can just paint it normally, it's dry in 2 hours, and it can be used. The next big innovation that went against enamel was powder coating. You electrostatically apply powder, it gets fired at 200 degrees, it's quick, clean and it certainly gets the job done too. It's two, maybe three times cheaper than the conventional enameling process. So, of course, everybody fell in love with the speed and the price and instead of enamelling, more and more people started to paint or powder coat and enamelling factories were dying one by one all over the world. Either because there was no demand for their goods, or because the pressure on prices was such that the enamelling companies had no chance to compete. Until what happened was that the pendulum swung back. For all the enthusiastically painted or powder coated items that were painted in the sixties, seventies, suddenly it was discovered that while it was cheap, it had almost zero durability compared to enamel. What you cover with enamel lasts forever.
What is enamel and what are its advantages?
Jan Novák
Now let's talk about what enamel is. It's simple, enamel is glass. Enamel is a silica melt mixed with various additives and the additives are there to make the silica melt stick to the base material, in this case cast iron. You can also enamel steel, sheet metal, and, oddly enough, aluminium, but they all have their own special enamelling materials that we don't use. We can't do everything, so we enamel cast iron and sheet metal. Now I'm going to go back a little bit. Why was there such an interest in enamel? We can't imagine how many pipes are in the ground, how many water pipes are in the ground, and all the water pipes have elbows, valves, various couplings. The water companies know that when a pipe bursts under the road and they pull those pipes out, that the powder-coated pipes are usually completely trashed, whereas the enamel pipes can last another 20 years. That's why they started rethinking their position and saying why should they cheaply powder coat and pull the pipes out of the ground after 10 years when they can enamel them a little more expensively and not replace them for another 30 years. So sometime after 2000, 2010, the great return to enamel began, pushed mainly by these water companies. But now it has become clear that there are no enamelling companies and there is now one enamelling company for the whole of Germany that does custom work, otherwise there are water fittings manufacturers who have their own enamelling companies. Anyone who does not want or cannot afford an enamel factory has nowhere to turn. And it was these smaller water fittings manufacturers who were beside themselves with happiness that an enamel factory in Osek was offering its services.
Where is there more potential - in B2C or B2B?
Martin Hurych
So today you are branching out into both B2C with cookware and B2B with enamelling in cooperation. Where do you see more potential in the future?
Jan Novák
That's a nice question. I think both directions are important for us. B2B has one amazing characteristic, that it can be planned and calculated. I have 2 or 3 partners today that I know exactly how many parts they're going to send me each week, how much they're going to pay me for those parts, and how much I'm going to make in sales. Obviously with B2C you can't plan that. No one can tell how your product will attract clients. Seasonality plays a part, after Christmas nothing, before Christmas a lot, you struggle with costings. On the other hand, I'm a retailer, my heart gravitates towards retail and enamelware, which is why I bought the enamelware business and which I'm only now starting to get around to putting it where I want it to be.
What were the decisions that kept the company afloat?
Martin Hurych
When you look back to March 2020, what were the most important points for you that helped you, personally or as a company, to survive? What was the sequence of decisions that kept you alive? Because a lot of other people didn't even make it through, which meant shutting down the company in a matter of hours.
Jan Novák
It would be fair to say we had some sort of financial cushion for a few months. What kept me in work mode myself was the very simple mind-set that I wasn't going to give up. If I opened something in January, I'm not going to think about closing it in April. It made me look all the more for ways to survive and how to get it done. Of course I had black thoughts, who wouldn't at the time, but I was hellbent on going head on against the wall and if it can't be done by force, it has to be done by even more force.
How to get employees excited about a new strategy under a new owner?
Martin Hurych
You said that the original company, which you didn't want to take over and on their foundations you built your Czech Enamel, employed people for plus or minus 10 years. The company wasn't completely broke, but at least it wasn't getting what it deserved. In my experience, that's often not a good thing for people who work there. I imagine that because you are one of the few enamel plants, it is not exactly easy to replace those people, and very likely you need to work with them in some way to keep the technology and knowledge in the company. How does such a group of people with the reputation of being from Prague and maybe going there to tunnel, get excited for another journey and a new future?
Jan Novák
The process is a journey. You can't have a meeting and tell them that from now on we will all be happy, we will be one family and we will pull together. Like I said, it took us a while to find our way together. I think what helped them a lot was that even though they saw what was going on around them, the money was coming into their account on time and nobody talked to them about the fact that maybe it might come later. One big advantage the lockdown had. I didn't want to sit at home and there was nothing to do in the office, so I spent a lot of time in production. Not only was I trying to watch people because they would immediately start to feel like I was controlling them and that I wanted to look under their hands, I was working with them. I'd come in in the morning, look at the mails, which there weren't any, throw on my normal fitting clothes and go and enamel those simpler things. I'd need training for the more complicated tasks. So I spent time there with them, had a coffee, a cigarette, talked about life, about the kids, and suddenly it all started to make sense. Of course, it was clear from the beginning that I had to expand the staff. It was also clear that because the staff was so small, not everybody could come. Not everybody will be accepted by the existing team and at the same time the requirements for a new person were not very low in terms of the work setting, because in enamelling you have two professions meeting, metallurgy and chemistry. Even the last manual worker you have in the enamelling plant has to have something in his head, he has to be meticulous and be able to evaluate certain things. You have to be able to spray a 200 micrometer layer to make the enamel stick to the base material. If you don't have enough, the enamel will burn off on the substrate because it burns at 800 degrees. If you put too much, the enamel will start to peel off after firing. Becoming a good worker in an enamel factory is not easy. For every worker you take on, you have one big advantage and one big disadvantage. The advantage is that they know how to do everything and do it really well. The downside is that they don't like to change their work habits and suffer from work blindness. So I've been trying for two years now to tell these people in a non- violent way and show them that there are other ways to do things. I've gone from retail to manufacturing and I'm trying to teach it.
How to deal with rising energy costs?
Martin Hurych
When I was preparing for this piece, I discovered that you often go through four heat treatments during the enameling process. So it's a very energy-intensive production. What are rising energy prices doing to you at the moment?
Jan Novák
The first shock is over. We are on the premises of a freight forwarding company, we don't have our own clock there and we are going to the so-called secondary measurement. Of course, the freight forwarding company was hit last year like many others by Bohemia Energy. I already warned them in the summer of 2021. I told them that I didn't like the electricity market at all and that we should fix it. They told me it was pointless. In October 21, of course, DPI and that was a blow. That was a blow that we had to swallow again somehow. What little we made was suddenly not there because it went into energy. From January 2022, we have fixed electricity, so if nothing else, I have a certainty of what I am going to pay for electricity and I had to adjust our prices to that, there was nothing else I could do about it.
Would you do it again?
Martin Hurych
Now I'm wondering, as we listen to that blow by blow, would you go for it again?
Jan Novák
I often ask myself this question. I would have gone, but I would have tried to prepare for it differently. I'd try to find out even more about the production, so I wouldn't find out on the fly. I'll give you one example. Like I said, I bought the enamel factory because of the cookware. I knew that we, as an enamel shop, could enamel, but we didn't have the capacity to cast. In order to enamel something, we have to get a casting from the foundry. So I was smart enough to go to the Železárny Komárov foundry before the final act of purchase. Today it's called Piston Rings and it's American owned. I told the production manager that I wanted to buy the enamel plant to which they supplied the castings. I asked if I could count on them being able to supply us with the castings. He replied that there was no problem and that there had never been any problems. So I was satisfied with that and bought the enamel plant. Spring has sprung, summer 2020 has passed and I thought I needed to prepare a bit for the Christmas season as people are cooped up at home and crockery will definitely be a great item. So I went out to the foundry to arrange castings for the fall of 2021. I said I would see it at 1,000 castings right away and I would gradually reorder, 100 or 200 castings a month. And now I saw the glares against me, and I realized I had done something completely wrong, because we had talked about supplying castings, but we hadn't said the quantity. So they told me that they had in their heads a quantity of 200 to 300 per year, as they always had. 1,000 pieces was inconceivable to them. So that was another blow I took after all the lockdowns. I must say, however, that the director of Piston Rings Ironworks was heroic. He told me that it was a great hardship for them, but they didn't want us to go bankrupt because of them and tell everywhere. So the castings in the fall of 2021 were saved. On 10th October we inaugurated our new e-shop. I did some campaigning for it, launched e- commerce and so on. We had 700 products in stock, which was more than two years of sales in the previous era. We opened on October 10 and sometime on November 20, I declared a sell-out. So I went to Piston Rings to beg for castings, so they shipped us some more, but they said they couldn't go on. So, I found out that if I wanted to keep making cookware, I had to find a foundry that could give us enough castings. In 2021, the anabasis of finding a foundry began. I have friends in Ostrava who were kind enough to send me an inventory of foundries in the Czech Republic. I had no idea that the Czech Republic had so many foundries, it's unbelievable. I'm not going to lie to you when I say that I contacted 100 of them. Virtually all of them told me they didn't want to. I was beginning to think it was over here, too, until I wrote to one foundry and was told that they didn't want to, but the foundry next door might. So I approached foundry number 101. It was a shock. I was expecting to get the same standardized answer and they texted me to come. I went out there and the week before last I brought the first 100 castings of the pancake. The foundry has a capacity of 200 castings per hour, so if I'm talking about a need for 2,000 castings per year, they would be able to fill our need in one shift. However, because life is never easy, there is one big but. In order for this foundry to be able to deliver the castings in the quantity and quality we need, I have to have a so-called model machine made for it. That's something that is molded into the bentonite sand, where molten cast iron is then poured in to make the final shape of the casting. One model device costs between 50 and 80,000 CZK. We have 13 products today, so you can easily multiply that to see how much money we need to make those model devices. But it's not as sad as it looks. If I didn't want to go down that road, I wouldn't go down it. We have a foundry that can cast and wants to cast, and we have an internal decision to make the models. We've already got the first model made, we've got three more in production, and the process has been completed for eight more models. Of course it's just a question of funding, but I am convinced that where there is a will, there is a way. I have the will and that is why we have launched a crowdfunding campaign on The Hithit platform, which will be closing in a few days, has not paid everything, but it has helped us a lot. So I think that during the summer, autumn we have the models under the roof and we can finally start talking about business.
What is the vision for 2023?
Martin Hurych
So what are your ideas, visions and dreams for this Christmas and next year? Where will we see the Czech enamel by the end of 2023?
Jan Novák
Until now we were only a manufacturing company, so we only sold what we produced. The goal for 2022 is to become a commercial manufacturing company. We want to finally have enough products in stock to be able to actively market and sell them. We are not able to do that today because what we produce we sell immediately. We have so few castings and there is so much demand for our cookware that even though I am trying to create an external warehouse, which I have rented, I have nothing to bring in. So along with production, I would like to build a business with everything, with a brand, with marketing, with a network of buyers and customers. But B2B will still be very important to us, of course, and we're working on creating a second shift so that we can keep up with both stock production and bespoke production. So from a small sweatshop, which my wife used to call my sheltered workshop, we want to become a commercial manufacturing company with 10 people in production, a clearly defined administration, a commercial manufacturing department and me at the helm. Medium-term planning is a bit difficult now, I have visions for the next six months, a year at most, but I can't tell you exactly where we will be in three years. It depends on a lot of circumstances beyond my control, such as the war in Ukraine, energy prices or inflation. There are so many question marks at the moment that it is impossible to plan for more than six months.
Contact
Martin Hurych
Anyway, we will keep our fingers crossed for you. If someone listening to us today, or watching us today, who has taken a liking to enamel, got excited about technology, what to do, where can we find you?
Jan Novák
Probably the easiest way to reach us is www.ceskysmalt.cz, where everyone can find everything they need, otherwise the production is 30 minutes by car from Nové Butovice metro station. If anyone wants to come, just write, I am very happy to visit, I even planned to do Fridays as an open day for those interested. I think that there is very little awareness of enamelling in general and that we have a lot to show.
Martin Hurych
Thank you very much, it was a nice chat.
Jan Novák
Thank you, too.
Martin Hurych
This was Zážeh with Honza Novák about enamelling in Czech Enamel. If you are interested in this technology, or if you are interested in the story of saving a traditional craft in Bohemia and, consequently, the in Europe, so be sure to give us a like and subscribe. Otherwise the world will not know about us and Czech enamel, or at least slower than it could. I have no choice but to keep my fingers crossed and wish you success, thanks.