5 May 1995

Zetor on course to leave slump behind

ZETORS manufacturing plant, based at Brno in the Czech Republic, has its origins in the armaments industry, making weapons and military engines during World War II.

After the communist take-over in 1948, production turned to tractor manufacture to supply machines mainly to the east. The present factory made its first tractor in 1953 – a 15hp version.

The fall of communism in 1989 offered mixed fortunes for the company. Privatisation, through the backing of a commercial bank, coincided with a rapid fall in demand for tractors – particularly in the home market as agricultural incomes slumped. Devel-oping a good export market became essential.

Production at Brno peaked in the mid 1980s, with 28,000 tractors being made, and fell to below 5000 in the early 1990s. But the economy has recovered slowly and current production is reported to be approaching 14,000 units.

75% home market share

Of this total about 750 are sold on the home market giving Zetor a commanding 75% market share.

The rest is exported throughout the world. The main markets seen as the USA, Greece, France and Great Britain. A marketing agreement with John Deere enables over 4500 tractors to be sold in parts of the world – Australia and the Middle East – where Zetors dealer representation is weak. These are sold in John Deere livery.

Company turnover is 5bn KS (£20m), of which 1.5% is invested in research and development.

"We know we should be spending more as a percentage," says Pavel Karmas, technical director, "But we are still recovering from the recession."

Not enough capital

Lack of investment capital has also been given as the reason why the current range, which tops off at 105hp, has not been extended into the now popular 120hp+ sector.

"It is a market sector we are keen to get into," says Mr Karmas. "We would hope to have a six-cylinder engine available within the next two years."

With over 6000 people employed in the companys 150ha (370-acre) site, Mr Karmas also admits that, compared with his competition, the factory is over-staffed. But with labour costs lower than most other man- ufacturing countries, he feels it is a problem he can tolerate in the short term.

One of the main problems which Zetor is attempting to overcome is maintaining quality of parts supplied by outside manufacturers. "The vast majority of our parts are sourced from other Czech manufacturers, and ensuring the quality is of the standard required has been a problem for a number of years." &#42