Miklós László, Managing Director
Miklós László, one of the managing directors of ADIX-Trade Kft., started his career as a teacher, and then worked for five years as a programmer in a bearing factory in Debrecen. It was here that he met his later business partner, László Juhász, who was an engineer and managed one of the factories. After a few projects together, they became entrepreneurs.
At the age of thirty, in the bustling world of the political changes in 1989-1990, we thought that if we didn’t try to do something back then, we wouldn’t be able to do it later. In the initial search for a way forward, we tried several activities; a sewing shop, a cafeteria, event organisation and trading building materials, with mixed results.
Eventually, almost by accident, we started as a bearings wholesaler. We did it with all our heart and soul, day and night, almost on our own, with very few employees,” recalls the CEO, who says that the initial success was due to the attention to their environment and partners, and the right direction for the development of the company, which resulted in continuous growth.
In the socialist era, bearings were a strategic product for mili- tary use, so only state-owned companies could manufacture and market them. A Western manufacturer was still granted permission to maintain a representative office in Hungary. Then, when the market was liberalised, it quickly built up its reseller network and started to cover the market, which in- cluded companies that had been formed from earlier bearing factories. This was the environment in which the newly formed ADIX-Trade needed to thrive, and they were able to do this by working with lower costs, offering a lower price and greater flexibility than their competitors. The bearings were taken directly from the manufacturers and then delivered directly to the customers, saving on inventory and warehousing costs. “Even though we didn’t have a penny, we managed to establish a good personal relationship with the manufacturers, so we agreed on paying them later, and we sold the goods immediately and paid our suppliers. This is how we managed to earn the first forints, which could be called capital”, said the CEO about the start, adding that the company’s competitive edge is not low prices anymore but the wide range of prod- ucts and complete services offered to customers compared to the Hungarian competitors.
ADIX has also been active in foreign markets since 1999. It started expanding into Romania, which now accounts for 45% of the group’s sales revenue. Although the expansion was not without painful setbacks, a viable company has now been built up in the neighbouring country.
To this day, the company’s traditional product is the bearing. Various power transmission products and tools and protective workwear have been added to it in the meantime. Custom- ised, tailor-made products are becoming increasingly import- ant and are continuously developed in their own workshop in Oradea. For example, the production and customisation of linear shafts for industrial automation, belt cutting and workwear labelling has been done in-house for some time and further development plans are also in the pipeline. Meanwhile, they are also constantly expanding their services. One of the newest is the installation of industrial vending machines and using them to supply necessary materials and products at the point of use. Another outstanding service is C-part manage- ment for companies, which saves their clients a lot of costs and headaches. Most of their products are sourced from German manufacturers, but this is not surprising given the German engineering tradition.
While the pandemic has caused significant downturns for many of their customers, especially automotive and aerospace suppliers, the company has been successful in finding industry segments that have avoided downtime and their expanding services are being used by new clients. The lockdown also generated new demands, to which the group was able to adapt. According to the CEO, the economic crisis of 2008 was a much darker period, especially for the Romanian branch, where they had grown very dynamically the year before, even with extra costs but, as the crisis hit, the low productivity part of the network that had been built up suddenly became an unfinanceable cost. Some of it had to be closed, but even then they struggled with the negative effects for a year and a half.
“In today’s terms, it was a mistake to rush expansion, but we learned from it and last year we made the necessary decisions more quickly, got rid of less efficient staff and closed what we needed to close immediately, and we also paid more attention to our accounts receivable”, says Miklós László, who, now that their sales order books are improving again, is confident that he can achieve organic growth of 30% to 40% within three to four years. Although the bearings market is also highly competitive, the CEO is not afraid of Hungarian competition, nor is cheap Asian dumping a threat, with the big international multinationals being the only headache. They are therefore strengthening the company’s position by offering new ser- vices and reducing supply chain costs. They are strengthening the production of custom-made products, which can give them an edge over multinationals. They are also developing IT solutions and studying international B2B platforms.
As part of the developments, they moved into the new ADIX headquarters last year, but they are already planning to build a new hall, for which they have applied for government support. The company has won minor grants before, mostly for staff training and infrastructure development. The former is import- ant because, according to Miklós László, it is difficult to a find truly capable workforce. Fortunately, the small company, which has about forty employees in both Hungary and Romania, has ow employee turnover, with three or four people to replace each year.
Given the age of the CEO, he considers it natural to be con- cerned about succession, and he is preparing several scenarios for handing over the reins. He also tries to guide his senior col- leagues and his children so that they gain the necessary expe- rience for leadership and become good masters and owners of the company. As he does not believe in dumb luck. As he said, if you work a lot and try to be everywhere, it can seem like you are sometimes in the right place at the right time. It’s only an illusion. There is always hard work behind good luck.