Miroslav Okuka, director general of Tarkett - We will increase production capacity by 50% and employ 300 workers in next three years

(Miroslav Okuka)

Four factories of floor covers in Backa Palanka annually produce about 35 million square meters of multilayer parquet floor, vinyl flooring, wall-to-wall carpets and regular carpets. That means that Tarkett in Serbia every year "covers" about 70,000 average apartments with its flooring, which is approximately the surface of a city of the size of Belgrade.

The biggest buyers of products of these factories are companies from Russia, Ukraine, Belarus, Kazakhstan, Azerbaijan, Georgia, Romania, Bulgaria, and from the countries of former Yugoslavia. Sintelon's heir exports 95 percent of products and currently employs about 1,300 people in Serbia. In an interview for eKapija, Miroslav Okuka, director general of Tarkett from Backa Palanka, speaks about a new artificial grass production line, production capacity increase, employment of new workers, EUR 4 million investment in 2011 and other innovations.

eKapija: Last year you registered a production growth and one of the highest profits in Serbia. How are the things going in 2011?

- Tarkett maintains a positive business growth trend for many years and we take pride in that. We plan to keep on going in the same direction and expect to register a profitable growth of 10 percent by the year's end.

eKapija: Tarkett invested about EUR 50 million in the construction of a factory of multilayer parquet floor. Do you plan to invest in factories in Backa Palanka this year?

- About EUR 4 million will be invested in 2011 in the projects aimed at improving the existing processes. We also plan to invest about EUR 1 million in environmental projects. Over the next three years, a significant investment will be made in the new production capacity increase by over 50 percent, especially in the parquet floor sector. Since 2002, nearly EUR 500 million have been invested in our factories in Serbia, Ukraine and Russia. All investments are financed from our own sources. One of large investments implemented in Serbia since the conclusion of a strategic partnership between Tarkett and Sintelon is the construction of a factory of multilayer parquet floor in Backa Palanka.

eKapija: You are announcing new investments. Does the current economic situation affect the operations of Tarkett at all?

- What is particularly important at the time of a crisis is the flexibility of operations, which is a big challenge, especially for large systems like Tarkett. By adapting our product portfolio and using resources rationally, we have managed to maintain our profits at high level over the last few years. In the current situation, we will continue to operate by the same business principles. We are adapting to the new conditions by making changes in our assortment of products in accordance with the wishes and needs of our customers and we continue to apply measures for improving the efficiency of operations.

eKapija: Tarkett is one of Serbia's largest exporters to Russia. What can you tell us about operations in that market?

- The market of Russia is very large and it offers excellent opportunities for business development, but it is also very demanding and gathers a big number of players. That is why it is necessary to offer a top product and constantly improve the operations and services provided to customers. Tarkett owns a factory of vinyl flooring and a laminate factory in Russia, thanks to which we cover that market very well and render better services to our customers in that country.

eKapija: Do you plan to offer your products to some new markets?

- Since we are already present in all markets covered by the division Tarket Eastern Europe, our plan is to strengthen positions in the existing markets and increase our market share, especially in the developing markets.

eKapija: Which of your products is in the highest demand?

- Different products are in high demand in different markets. Tarkett always adapts its operations to the local market conditions. Our company is the global leader in the production of vinyl flooring and multilayer parquet floors.

eKapija: What is the company's share in the flooring market in Serbia?

- Thanks to our factories in Backa Palanka, we currently hold the leading position in the market when it comes to the products produced at our factories in that town. Of course, there is always a possibility to expand the offer by introducing new products and entering new market segments. We expect the most from our multilayer parquet floor, which is absolutely superior in quality.

eKapija: Is lately demand for multilayer parquet floor in our country higher or people here still prefer classical parquet floor?

- In the developed markets such as Western Europe and Russia, the share of multilayer parquet floors in the total wooden flooring sales exceeds 75%. That share in the Scandinavian countries amounts to over 95%. The market in Serbia is not yet at that level and the share of classical parquet floors is still higher, primarily because people are not familiar with the characteristics and advantages of multilayer parquet floors. Now when one of the world's largest flooring manufacturers is in Serbia, the local market will quickly get closer to global trends. Oak wood flooring is in the highest demand in both Serbia and the rest of the world. Its share in our sales is the highest, amounting to over 50%.

eKapija: Which PVC floor covers are in the highest demand in our country? Is there a difference when compared to the foreign markets you export your products to?

- One of our factories in Backa Palanka produces heterogeneous vinyl flooring, which can be used in households, as well as in various public and commercial spaces. Depending on the space, we offer different types of products. In Serbia, vinyl flooring is mainly used in public and commercial spaces, which is not the case in Eastern Europe where this type of flooring is the most popular in households, primarily owing to its esthetic characteristics, endurance and easy maintenance.

eKapija: Is demand for sports hall flooring in Serbia now higher since a growing number of such facilities are under construction in our country?

- The sports flooring market in Serbia is developing. Since recently, an artificial grass production line is in operation in Backa Palanka. Tarkett's sports flooring is quite famous all around the world. There is even a special sports flooring division within Tarkett Group - Tarkett Sports. We expect the demand for sports flooring in Serbia to grow even more in the following period, which is why we are considering the possibilities of a new investment in the production of this category of products.

eKapija: Where do you buy raw materials?

- The company procures all available raw materials in the local market. Of course, a condition is that their quality meets our production standards. Since our needs for raw materials are huge, we also import certain share of materials.

eKapija: What are Tarkett's plans for Serbia in the following period?

- The plan is to expand the capacities in Serbia over the next three years, as well as to create about 300 new jobs. The company's strategic priority remain the same. We plan to enrich our assortment with new products and invest in new production lines so we could be able to serve our customers better, use our resources rationally, and continuously invest in our staff and environment protection.

S.O.