Axioma Metering is preparing to build a second factory

Axioma Metering is preparing to invest about 20 million euros in the construction of a new factory in the Kaunas Free Economic Zone (LEZ) by the end of 2024. In 2024, these factory lines will allow to expand the technical productivity of production from 2 million meters per year to 3 million. The expansion of additional lines is also planned in the following years.

The construction of the new factory should start at the end of 2022 and end in the quarter of 2024. In addition, the company plans to hire 20 employees this year, another 100 employees in 2023, and 120 new employees in 2024.

Read the latest interview of I. Vosylius in “Verslo žinios“ to find out about the challenges faced after China closed down and following the supply chain disruptions, the component crisis, the export plans of Axioma Metering and the achievements in the Italian meter market.

The head of the company admits that the business, that is based on technological innovation, faced unplanned challenges: after China had closed down overnight and supply chains were disrupted, the meters produced by the company could not reach customers in 60 countries in time. Earlier, the company announced that it wants to record a turnover of 82 million euros in 2022.

“We did not come to a halt. However, the pace of production was slower, and we were looking for solutions to get back to normal. On the one hand, the result is pleasing, but on the other hand, technological development and the market situation allowed us to expect much more", - stated I. Vosylius.

In 2021, the company received a net profit of 1.93 million euros, compared to 1.6 million euros earned in 2020 (according to the data available on www.rekvizitai.lt)

One third of water is wasted

I. Vosylius remembers that in July 2021, the company had reached the sales level of 2020. But the electronics market suffered a heart attack: “The supply of processors for us began to decrease, while processors are the heart of electronic devices. We had to plan everything anew an set other priorities. Only very recently we have started to stabilize the supply chain. Following the cessation of exports to China (10% of the company products used to reach this market), Taiwanese, our friends, helped us find strategic supply partners in Taiwan.”

According to the head, the most important thing was for the meters, operating on the principle of ultrasound, to reach the customers, who were very patient with late orders, because a technological revolution is taking place in the market of smart heat and water meters.

“Lately, the topics of climate warming and saving resources are becoming increasingly relevant. This dictates the need for more accurate technologies, which will help manage the entire infrastructure. For example, about 30% of water is wasted in London and Rome. Water is lost through leaky taps and during pipeline accidents, and the response time is critical. It is necessary to receive information in real time and monitor the user behaviour”, - explains I. Vosylius.

Goodbye China, hello India

The head of the company states that Chinese willingly implement the latest technologies and experiment in the segment of metering devices. But they are too tolerant of poor quality.

“We had done a lot of work in China (certificates, partners). It is sad that this situation has arisen. But that's the way it is. I don't want to complain and whine”, - says the director.

According to him, the company pays a lot of attention to the Indian market. Australia is is increasingly investing in water metering too.

After being asked what is the best way for getting the product onto such markets, the interviewer emphasizes that the first visits to far and unknown countries are intended for getting information: “I am angry with those who go to sell. You don't know if you can sell there or not, what is the competitive environment and price level, how low-quality products are tolerated there. We, Lithuanians, sometimes lack a habit of formulation of long-term goals. Sometimes luck is enough to go to one place or another and to sell a little here, a little there. But then you hit the wall of the novice success. I have been growing for a year or two. And how to continue growing?“

The head of the company believes that in five years Axioma Metering can appear among TOP 3 players in this segment. He also gives an example of how the company, headed by him, is doing in Italy: "In the European market, Italy is the leader in the field of smart meters. Both the state provides tools for faster development of smart metering devices and the problem of water shortage is more painful for them than for us. In Italy, smart meters have already become a standard. We hold a share of 53% in the largest European market. We did that in the last 3 years without chasing high profit margins.“

Don‘t lose your pound for a penny

According to I. Vosylius, growth should be more of a philosophy than a short-term goal. It is important to distinguish between the tools to manage the situation and strategic goals.

“We swallowed a bitter pill, had financial losses, but we already have a second production line, and a week ago we received a building permit for a new factory. Its construction will begin after a month. It is important for us to know why we are doing that. In my opinion, companies, that will use the stagnation and slowdown to strengthen their long-term competitiveness, will demonstrate the best results. We invest in both technology and new product development”, - shares his opinion I. Vosylius.

5 years ago, the company had been mainly producing heat meters. But it later saw an even greater need for water metering devices. It, therefore, decided to invest in automation and robots. According to the interviewee, this allows to achieve and maintain high quality.

“Powered by two AA batteries, our product transmits data for 16 years by metering three times a day with a millisecond precision. Ultrasound makes it precise, but it also has to be durable“, – explains about the standard the director.

In the opinion of the interviewee, the decision to refrain from pursuing short-term goals and invest in technology has paid off: compared to other similar companies, Axioma Metering employs very little people. Processes are automated and people have to do very little of mechanical work.

Competes with Continental and Hella in terms of creativity

Although there is little mechanical work left in the company, the situation in the labour market remains complicated. I. Vosylius explains that light chaos and a sense of patriotism help attract highly qualified engineers.

“We have everything under one roof: from talks at the meeting to an article, product, intellectual property. It is a 100% Lithuanian product, which is getting into the leader's positions not only in Europe, but also in other countries. A sense of national pride is important to me. I believe that this sense is also important for those who work here”, - tells the director.

According to him, there were plenty of companies in the business environment, which made adventurous decisions, which had money but lacked long-term plan.

“When you are doing that, then there are no own employees, who were raised within the company. They need to be "cannibalized" from others by offering more money. Such an employee also becomes sort of a hostage of the situation because he does not want to be paid one euro less. However, I think that the bubble of the labour market will collapse. We saw what happened when the interest rate went up. Investors are looking for alternatives, and the opportunities for start-ups are closing“, - shares his opinion I. Vosylius.

The head also draws attention to the successful attraction of foreign investments in Lithuania, when the production units of the world's largest companies are being established here. This, however, increases tensions in the labour market.

“In those factories (UAB Continental Automotive Lithuania, UAB Hella Lithuania or similar – VŽ), the employee follows clear and sterile instructions. Our advantage lies in that we also offer chaos that fosters creativity. Our engineers themselves design the production lines and can create the final product", - summarizes I. Vosylius.

What he would tell himself not to do? 

After being asked what he would do differently, I. Vosylius admitted that he failed to assess properly the weight of bureaucracy.  

“Our customers are water and heating network enterprises. They are either fully state-owned or partly state-owned. Yes, in technological terms, you get better products, but they are installed for the first time. Business and companies assess all pros and cons very quickly and simply. But there is room for the policy in the state-owned enterprises - what will happen if the decision will prove to be wrong. In the state apparatus, people are very little rewarded for their successes, and a lot off penalties are imposed for failure”, - says I. Vosylius.

According to the head, there is more excessive caution and cover-up certificates, additional tests, that do not create real value, but extend the process and reduce someone's responsibilities, in the state-owned enterprises than in the private business.

For more information: https://www.vz.lt/pramone/2022/09/07/kinija-ir-tiekimas-sujauke-planus-bet-i-pagalba-atejotaivanieciai-dabar-investuoja-40-mln-eur#ixzz7eBgmaFsH

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