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Jan-Gerd Vos (profine RUS): Raw materials price in Russia are outsized, and the product cost is low

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Jan-Gerd Vos (profine RUS): Raw materials price in Russia are outsized, and the product cost is low

Director General of the “profine RUS” CJSC, Jan-Gerd Vos spoke on the prospects of the window market in 2017 and explained why the company took the decision not to take part in 2017’s BATIMAT exhibition.

Despite a serious reduction of the population’s incomes, the window market still stays on course. How the producers of raw materials drive up prices, how the PVC profiles market will develop in 2017 and why control a window via a SP application was told to Construction.RU by the Director General of the “profineRUS” CJSC, Jan-Gerd VOS.

 

Mr Vos, how can you characterise the year of 2016? What are the results?

— The year of 2016 was characterized by a small fall of the market. In 2014—2015 there was on average a 25% fall a year. And in 2016 it was minus 10—15%.

 

— What other surprises did you get last year?

— There were many. As a positive example, we improved our positions on the market, and our share on the market grew up.

On the whole, if the market lost about 10—15% in 2016, then our company lost 5%. It speaks for our having enhanced our positions and having good prospects for development.

In 2015 we covered about 18% of the market, and in 2016 it was about 20%, which is also very pleasant.

We adhere to plans to increase our market share by several percent in 2017. But it will depend not only on us, but on the way the economic processes develop.

An unpleasant factor is that raw material producers hold up prices, which is connected with low competitiveness in this sphere. Also, this policy is influenced by currency rates and export problems. As a result, raw material prices in Russia are outsized, and the final cost of a product is low. As such, profile and window producers are presently having hard times.

 

If raw material producers overprice, and the cost of the final product is not high, how do companies manage to survive and not go bankrupt on the Russian market?

— It is necessary to completely understand what is going on in the company and be able to manage it. It is also useful to minimise expenses. A really skillful manager with good intuitive feeling of the market is needed for that; one who can calculate, think a strategy through and implement his ideas in life.

 

— You have announced your rejection of participating in the BATIMAT exhibition this year. What is this connected with?

— The decision appeared after we had analysed the correlation of profit and expenses. In 2015 our company occupied rather a big area of about 800 sq.m, and we presented a rather wide range of products: КВЕ_76 mm, the PremiDoor system and КВЕ_88. And we invested quite a sum in the event.

Yes, the exhibition was a success and it positively enhanced our image. But this year we have decided that the event would be of a more B2B format, and thought that it would be more reasonable to direct the money on business development and supporting our partners.

In 2017, our potential customers from Khabarovsk, Vladivostok, Novosibirsk and Omsk will not be able to come to the exhibition because they are putting a lot of effort into surviving and cannot afford extra expenses. So, who should we make a big booth for? For our Moscow customers and ourselves?

We are not afraid of saying it openly, because I know that other companies are in a similar position.

 

— How will the window production industry develop in 2017? What is your standpoint?

— I expect positive dynamics to start from August, 2017. There are opportunities for the proposition that Russia’s position on the international market will start to become steady. Our analysts and I believe that the conjuncture of the market will improve from the second half of 2017.

If the price of oil goes up, the amount of money on the market will increase and, consequently, a customer will be ready to pay more for quality goods.

 

— Concerning the conditions of tough rivalry, what is primary for your company: quality, pricing policy, something else?

— КВЕ is a popular window. But the quality bar should not be lowered, and we shall not do it by presenting our brand as the cheapest on the market.

Presently, the KBE system costs about 10—20% more than economy class systems, but it is windows like KBE that are optimal for the Russian climate, because they serve for decades and may be used on different construction objects from panel to elite houses. Quality must not be economized on.

However, we also understand that economy class products occupy a bigger and bigger part of the market, and that this is in demand. So we think it is necessary to move in this direction as well.

 

— Your profiles and ready products are not present in construction retail chains. What is this connected with?

— In some regions Gutwerk products are presented in OBI shops, but this direction has never been a priority for us. The goods presented in retail chains are extremely cheap, so we decided to choose a different way.

Despite the fact that КВЕ is a popular brand, it does not mean it should be distributed via retail chains. We cooperate with serious window producers who offer quality assembly in the range of their services. It is part of our strategy.

 

— Could you please give some details about your novelties?

— In 2016 we presented a novelty product: a restoration frame. It is a useful invention for those who want to replace five windows but do not want the window aperture and window sills to “suffer” and do not want much dirt and dust.

To avoid this we install a new window into the old wooden frame provided it is in good condition. One may compare this process with a dental crown placement. A window is strengthened and protected but there is no need to break the walls.

The installation of plastic windows is not a clean repair process, and sometimes elderly people do not replace windows for this reason. Presently, there is an alternative making it possible to solve the problem.

 

— Some years ago your company made claims on so-called “green technology” and the “smart house” system. Will these headlines develop in the nearest future?

— Absolutely. In 2014 “profine RUS” got the “Life Leaf” international ecological certificate. By buying a product with this eco-label a customer may be sure of its sustainability. Furthermore, 2017 has been announced the Year of Ecology, and we support it by all means.

We also develop and implement energy efficient systems in the window production industry. For example, we have developed the КВЕ_82 mm system.

Besides this, between December, 2016 and January, 2017 we shall add innovations to our “smart house”, including a new window handle, the LOCKSTAR, whereby one may control the house security via an application in his smart phone. We are going to receive the first samples and the interest in such systems is high.

Alexander GUSEV, Yulia YUDINA

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