The Foundation of the Business
The cardboard industry found me by chance. In the late 80s and early 90s, a friend working for a packaging manufacturer approached me. It was a fast-paced era defined by a shortage of time; the company could not keep up with demand, so my friend suggested we handle some orders independently. Since he lived in an apartment and I had a house, we started our first production in my outbuilding. It was a primitive operation where we cut materials by hand with shears.
Transition to Independent Enterprise
Our partnership lasted about a year before a difference in vision led us to part ways. By that time, I had already resigned from my job, so I retained a portion of the production. My competitive advantage was having zero overhead; I handled both manufacturing and logistics myself.
Scaling and Modernization
The initial quality of production did not meet my standards, so I began searching for machinery. Initially, we purchased used shoemaking equipment from the Borovina plant in Třebíč and retrofitted it for production of packaging. However, as I targeted more demanding clients, I realized professional-grade machinery was essential. A client assisted me by taking me to Italy to inspect potential equipment.
Financing and Growth
It took approximately six months to secure a 3.6 million CZK bank loan for a pre-owned machine. Ironically, my father’s sole piece of business advice had been: “Don’t even think about borrowing a million.” I took out a loan for nearly four million and was too afraid to tell him for the next five years.
Expansion and Leadership
Soon after, the original workspace “pigsty” became insufficient for the new machinery. I began leasing dedicated premises and gradually expanded the workforce. While managing personnel presented challenges initially, the situation stabilized in 1997 with the arrival of Jiří Trnka and Petr Vandas, who now lead the management team at Litobal.
The snack from the store opened our eyes and has spurred the production of bags
Once, someone from Jednota (a local consumer cooperative) brought their snack into our Litohoř facility in a paper bag. We took a good look at it and thought: why not try making these ourselves? Truth be told, I had been fascinated by paper carrier bags for a long time. I had even tried to secure funding for a carrier bag machine, but it didn’t work out. Fortunately.
So there we went to paper bag (for sandwiches, baguettes and so on). We found out for how much buys paper bags our local baker, and made basic calculations. In Germany, we managed to get used bag and printing machine. Keep them both running without any previous experience was no fun. We fought with it for almost a year. Fortunately, we could afford it thanks to profits from cardboard boxes.
Course of time we stopped to be satisfied with the rent in the middle of farm courtyard, so we moved to new headquarters in Moravské Budějovice and at the turn of the millennium we started writing the new era of Litobal. Again, we realised that if we want to be competitive in the packaging, we have to buy a better machine…
The breakthrough with bags started on show Embax 2001. It was Friday, the last day of the exhibition, and we wanted slowly leave the tent when we noticed a tiny lady with a huge suitcase, bigger than she, comes to our place. She turned out to be the director of purchasing in one of France’s most important wholesalers of packaging materials and showed interest in cooperation with our company.
After the Embax has occurred a several months of fax and telephone negotiations, which apparently went nowhere. So we decided that we will take one last attempt and we’ll go to them on a personal visit to France. After an hour of discussions we left with a contract for a trial order – one full truck (approximately 2.5 million units). It was a huge amount. Until then, the trial production was ranged between 5,000 and 10,000 units and normal production amounted to more than 50,000 units. In the land of the Gallic rooster, we finally succeeded, and order volumes have increased and increased.
Production of bags was accelerated. In 2003 we bought former supermarket in Moravské Budějovice and started to produce there. We have gained more and more customers throughout Europe. In Germany and France especially.
I am driven by personal engine of “not losing“
But in my head, there were still lain shopping paper bags. At the turn of 2009 and 2010, I literally feared of ending of subsidies, and so we could lose a good chance to the creation of our third type of industry. Still it was my longtime dream. That’s why I applied for grant and it was accepted. Story of the shopping bags production in Litobal began in September 30,2011 at the opening ceremony of a new production complex in Šebkovice.
The first shopping bag machine was imported from America and in Europe is probably the only one of its kind. Since the spring of 2015 we produce on two machines in three shifts. We would keep up more machines, but it’s a huge investment. We compete with the old family businesses across Europe, which produce on five times more machines than us. And neither these traditional companies bought all the machines overnight. So we’ll be patient, because we know that the potential for expansion of production is great here.
When I look back, I see a lot of success, but also a lot of mistakes which shifted us farther. What kept me afloat in difficult times? Probably personal engine of „lot losing“ that was probably given to me from God. Although I can lose, I don’t like to lose. It is not matter to me. It even could not be. I just set up the production of packaging, cared for the family, had commitments in banks and employed people. And for my mindset is totally unacceptable idea that I would not equal with something what I opened…