Written by: Monika Mudranincová
Photo by: Petr Poliak
During its existence, Canaba has built over a thousand prefabricated, customized houses. As well as receiving many prestigious awards, the firm has become one of the market’s most significant players.
THE CURRENT success of the Canaba development company was in fact spurred on by the collapse of Presta, a pre-cast concrete company in Česká Lípa. Civil engineer Jaroslav Kalenda, an expert in land development for many years, had tried to save the production program of the stagnated Presta by pushing the company towards manufacturing prefabricated, customized houses (so-called “concrete sandwiches”) with the help of modern Swedish technology. But when Presta declared bankruptcy in 1991, Kalenda decided to establish a development company along with several partners, and began doing business on his own.
The initial stages were not easy – for almost six years the firm was unable to overcome the Czech aversion to concrete panels as construction material, as they are a symbol of “panelák” housing projects such as Jižní město in Prague. First, Canaba focused its attention on Germany, where customers understood that the quality of the new panels was different than during the period of socialism. During those several years in Germany, the firm participated in the realization of over 300 buildings, yet because of fierce competition and the strengthening crown, it was forced to withdraw from the market.
Business minus money
Kalenda and other shareholders had a clear and courageous vision – to succeed in the Czech Republic building customized houses. But there were two snags: first, they had no capital, and second, they had no experience with business of this kind. “I see the basis of our success in the fact that we jumped right into it even though we didn’t understand much,” insists Kalenda, chairman of the company’s board of directors. “Those who understood it were apprehensive, so the market was open to us, though in the beginning we had zero capital. We just bet on the fact that everybody desires their own house and garden so that they can make decisions about their property themselves,” he explains.
This hypothesis has since been proven. The demand for individual housing was so strong that clients fully paid for the entire development in advance, enabling Canaba and similar development firms to do business without loans. This method of financing, which is completely non-existent in the west, was common in the Czech Republic in the nineties – until 1997, when development company H-Systém declared bankruptcy and over a thousand affected clients lost a total of CZK 1.3 billion, tunneled by the former managers of the firm. Kalenda acknowledges that the H-Systém case shook public trust in the seriousness of advanced financing, and notes that although their own approach was based on honesty, Canaba no longer uses this method.
Since that time, the company has built 1,084 family houses, or around 150 of them every year (165 last year, with 182 family houses expected for this year). The company offers six basic types, which range between CZK 2-6 million. Ninety percent of the clients have their own lots, but Canaba also builds on its own land, so-called satellite villages or apartment houses. One example of such developments is in Nupaky near Prague. “The interest in family houses and apartment houses is huge,” says Kalenda with delight. “Without too much advertising, the demand almost exceeded our production capacities. The apartments in Nupaky were sold before the shovels even hit the ground.”
The secret of success
Canaba uses the modern technique of prefabricated parts, improving it continuously. Since construction is carried out by well-trained specialists, the risk of error is minimal. This type of quality control is evidenced by the minimal amount of client complaints. In addition, house made-to-order can be built within a couple months. Potential customers are also often attracted by the price, which, for the simplest house, compares to the price of an average-size Prague apartment. However, this type of development also has its disadvantages, which are especially emphasized by architects – the houses are more or less uniform and the variability of the design is limited to a large degree. But it seems the general public is more pragmatic than architects. Most visitors to the model houses are surprised by the practical character of the internal layout, which evokes a feeling of spaciousness even in a relatively small house. Readers of Můj dům magazine chose the Classic type as “House of 1995” and the Variable type as “House of 97/98”.
– narrow specialization on customizing solid prefabricated family houses with the help of top technologies
– emphasis on the quick speed of construction and low price
– growth achieved solely via firm’s own capital (no bank loans)
– image of a successful firm supported by the “House of the Year” award
What doesn’t kill us makes us stronger
Each business goes through crises, from financial to personal. In the case of Canaba, 1998 can be considered a turning point, as the number of clients who could fully pay for the building of a home in advance radically declined. This was made even worse by the recession in the construction industry, high mortgage rates and poor availability of loans. From 1997 to 1998, the company had to reduce the number of its employees from 212 to 165, when sales declined from CZK 271 million to CZK 237 million per year. Economic director Šárka Miškovská characterizes the situation as a crisis situation indeed, but not insurmountable: “At that time, the banks did not want to loan us money, so we had to cope with our insufficient finances by strictly economizing,” she says. “However, today we perceive that crisis as a positive, something we were able to learn from.”
The firm, which was originally headquartered in Děčín, moved its offices to Prague in 1999. It now has representative offices in eight Czech towns and, since 2000, in Slovakia as well. The number of employees has stabilized at 418. In 2001, sales of the Canaba group reached CZK 476 million, and profit for the last five years has hovered around 0.5-1% of the annual turnover. The firm has property worth several hundred million crowns, consisting of a factory, a fleet of machinery, its own headquarters and the model houses. It has practically no competition in this country in the area of solid, prefabricated houses.
Majority shareholder Kalenda, who turns fifty this year, has a rosy outlook for the future. “In two or three years, we want to become a relatively large company with a growth of annual sales from half a billion this year to one billion, and engage ourselves more in the building of apartments,” he says, adding “we know that we have the potential for this.”