Connecting to the continental market: Croatian automotive parts manufacturer Elcon DD, is gearing up to tap new markets. The company, whose primary focus is the manufacture of cable harnesses for the automotive and household appliances industries, has a client list which includes Valeo, Hella and Yazaki

Automotive Industries, July, 2005

EIGHTY-FIVE percent of Elcon's production is for the automotive sector. Valeo accounts for 62% of Elcon's volumes.

Elcon, which started operations in 1971 as a subsidiary of Elektrokontakt, Zagreb, uses a variety of technologies in order to keep up with developments. The firm became an independent company in 1988 and in 1992 Elcon became a privately held company.

In 2005, the Croatian government bought a 36% stake in Elcon. The company has the ISO/TS 16949 quality certification and is considered an A class supplier by its automotive customers. Elcon is currently working on getting the ISO 14000 certification.

While the Croatian government has a 36% stake in the company, 19% of the stock is held by the company, with the remaining held by Croatian citizens. Elcon feels its USP is the cost-effective nature of its operations and the fact that the government's stake, makes it a stable entity. Which makes the company perfect as an manufacturing hub.

The company, is based in Zlatar Bistrica in Croatia and has over 50,000 square meters of space. The company's manufacturing plant takes up nearly 18,000 square meters of this space. Elcon uses CATIA software to help its design process. The company says it focuses on keeping up with the latest designs and technologies in the cable harness sector to keep up with global competition.

That combined with the fact that the company has long-standing relationships with its customers, makes it a good source for automotive companies. The company has its own fleet to transport finished goods and an in-house customs desk, which makes it quicker to export goods.

The company has around 450 workers--most of whom are full-time employees. Elcon is hoping to cash in on lower operating costs in order to tap into the global market for automotive components. Croatia hopes to become a member of the European Union by 2009, which will help companies like Elcon, tap the continental market.

Zdravko Bencic, general manager at Elcon DD, spoke to Automotive Industries on the company's plans for the future:

Automotive Industries (AI): What markets does Elcon hope to tap into in the future?

Bencic: Elcon is negotiating mostly with recent but also with new customers to increase turnover with new projects and to achieve better cost structure. There are already some projects with start of production in march.

AI: How are you adapting your manufacturing to tap into these markets?

Bencic: We have to use our competitive advantages like long-term know how in automotive industry, skilled local workers, flexibility, pickshaving, reliability ...

AI: What are some of the challenges of doing business in Croatia for companies and how is Elcon circumventing these problems?

Bencic: There is still problem with expensive capital and it is hard to finance whole production with very hard terms of payment.