Written by: Fiona Gaze
Photo by: Petr Poliak
Without even realizing it, people in Prague are walking all over BEST products every single day. From supermarkets to Sazka Aréna, shopping centers and historical squares, BEST has paved the ground beneath our feet.
THE HISTORY OF BEST serves as an illustration of how to lay a solid foundation in business. Fifteen years ago, a civil engineer named Tomáš Březina saw an opportunity following the whirlwind events of 1989 and founded a manufacturer of concrete elements for outdoor architecture, which over the years grew to a size unseen in this country.
Because the venture was into virtually uncharted territory, Březina had to start from scratch, building the company’s first plant as a greenfield development with a CZK 100 million bank loan. With a standard interest rate of more than 20%, the scene at that time was hardly conducive to investment. “The business environment was wild,” recalls Březina. “I felt that I had risked everything.”
With a small team by Březina’s side, BEST started producing five basic types of pavement for select clients – which are still part of the firm’s offer. Today, their product menu stretches to the thousands, and includes two basic series: “low” products such as pavements, which account for 65-70% of production, and “high” products, meaning everything above 20 centimeters in height, such as elements for retaining walls and staircases. “Every type of product is equally popular,” says Březina in response to questions about his best-sellers.
The first production site – the company’s primary plant location and current headquarters – opened in 1992 in Kaznějov, near Plzeň. Production started with just 20 employees. BEST now has 260 permanent employees, two more production sites (around 70,000 square meters each) near Most and Chlumec nad Cidlinou, and a fourth one just recently started to rise in Třeboň, south Bohemia.
At the venture’s genesis, there were a number of paths BEST could have taken. Soon consumers showed interest, and although this was good news for Březina’s brainchild, it also meant that production – and subsequently investment – had to meet the demand. One of the options was for the company to invest a reasonable five to ten million crowns into cheap, small production lines. BEST would have been safe financially, but would have ultimately compromised output quality. He therefore decided to trust in consumer interest and the quality of his firm’s products, and to invest further in top-of-the-line machinery. “It was the right decision. We jumped from nothing to big success,” the founder reflects, remembering that his choice was potentially life or death for the company.
The initial investment would have paid off after four or five years, but Březina kept investing. “The risk wasn’t just at the beginning,” he says. “We decided to continue to invest in building more plants, a wider range and increased quality of products as well as the production capacity.” All profit was invested into expansion and the company took on more loans. “I was virtually a millionaire, but living in a panelák,” Březina recalls. These days BEST continues to invest, mainly into new production lines – in 2003 they invested CZK 155 million with an annual turnover of CZK 716 million. Currently the company has unpaid loans amounting to CZK 169 million, and this year expects turnover of CZK 850 million. “We pay off our loans; during these fifteen years we have never failed,” says Březina.
In the name of marketing
Taking this risk for the sake of ensuring quality propelled BEST to a status alongside international manufacturers competing for headway in the burgeoning Czech market. Unlike every other post-communist country, however, foreign providers do not lead the market in the Czech Republic. With a strong hold on 40% of the domestic concrete market, Březina proudly claims that, “not a single dollar or euro of foreign capital is in this company.”
– Constant improvements to stay ahead of the competition
– Continuous re-investment strategy
– Learning from global trends
– Strategic positioning/marketing via specialized outlets
The company now boasts a product range of more than 3,000 types of pavement and fittings, flexible enough to suit any budget. In 2003, the company was the country’s largest purchaser of cement and laid more than two million square meters of pavement. This year, that number is expected to reach 2.5 million, not including the six million units of other products that the company has sold. Even though, as Březina says, a concrete fitting may be the last thing that a developer will point out to people, he is quick to note that “every important construction project that has taken place [in the region] features a BEST product.”
BEST now sells 90% of its products through specialized shops for builders, which means that oftentimes they do not know the exact client whom they are servicing. “We are heavily influenced by the way it is done in Germany,” says Březina, adding that this sales practice is common there, and that copying it helped them to beat the competition.
The construction sector does not need constant advertising campaigns like those used for fast-moving consumer goods. People buy pavements once or twice in a lifetime. “The most important thing was to create a general knowledge of our existence,” says Březina, explaining that the firm’s presence in showrooms of over 500 specialized shops serves exactly that purpose. The company also distributes informational brochures to architects and construction companies. As clients are primarily seeking one-time solutions, Březina believes that processing through specialized shops helps to foster a community of concrete-happy customers.