Lasselsberger completes its largest investment in southern Bohemia for more than one billion

The largest Czech manufacturer of ceramic tiles and tiles, the Lasselsberger group from Pilsen, is completing its largest investment for more than a billion crowns.

At its plant in Borovany in South Bohemia, it will start trial operation of a new line for large-format tiles up to 120 by 240 centimeters in July. The group decided to invest last year, despite the fact that the construction market throughout Europe was experiencing sales declines of 15 to 30 percent. CEO Roman Blažíček told ČTK.

Lasselsberger sold 19 million square meters of RAKO brand indoor and outdoor ceramic tiles last year, 25 percent less year-on-year. "However, we did not lose our share of the European market in any fundamental way, because the whole fell by about 25 percent. Construction production went down significantly, which affected all manufacturers of building materials," he said. Stabilization only occurred in the fourth quarter.

Last year, the group exported 70 percent of its production to 90 countries around the world, a share it has maintained for a long time. Roughly two-thirds of exported products are bought by Western Europe, especially Germany, France and Austria, but also Slovakia. "We transport part of it outside the EU, but due to the increase in energy prices and the dramatic increase in costs, we have become almost uncompetitive there. There are an awful lot of manufacturers from India, China, Turkey and Vietnam and Brazil competing with us there," he said. In addition, they are gaining ground on European markets. "The dramatic increase in imports from India over the last two years is almost impossible to face," said Blažíček. A comparable product is up to half the price.

"We decided to invest even in this crisis, partly because we want to be a world leader in technology and also because we are fulfilling the vision of reducing greenhouse gas emissions," said the executive. The company believes it will increase sales by five percent this year. "Although the development is similar so far, we believe that mortgage loan rates will decrease, that apartments will start to be built and private investments will take off more. Unfortunately, sales declines in all EU countries range from minus 15 to 30 percent," he said. The tile manufacturers are only at the end of the construction process, so the company does not expect higher growth until next year.

The main part of the construction in Borovany is the Italian production line but the group also had to invest in modifications to the factory, for example the roof for 60 million CZK. It is hiring 50 employees for the new production with a total of up to 100 in Borovany. The group, which has 1,500 workers at plants in Rakovník, Chlumčany, Borovany and Horní Bříza, will have an annual production capacity of 30 million square meters of tiles after the completion of the new Borovany line.

Lasselsberger invests in technology every two years. The last time was two years ago for a new line in Rakovník for half a billion crowns, and in 2018 about 800 million for a new line in Chlumčany. Both can produce large-format tiles up to 60 by 120 centimeters.

Marketing director Petr Machoň said that the world market is moving to medium and larger formats for walls and floors. For tiles, the most popular size is 60 by 60 cm, for floor tiles 30 by 60 cm. "In Borovany, we will start producing formats 60 by 60 and 120 by 120 centimeters this year. We will decide when we will start production of the largest format, 120 by 240 centimeters, next year according to market development and demand," he said. According to him, the installation of more expensive large formats is more complicated and more prone to damage than small ones. That's why the group opened a training center in Horní Bříza near Pilsen last year, where ten employees teach craftsmen, last year there were over 700. Another trend, according to Machoň, is an increasingly wide range of designs in interiors.