n one country’s economy, when there is a company that celebrates its 100th anniversary and whose products have reached the markets of 130 countries and has no intention of stopping development and innovation, it is clear how much importance and contribution they give to the economy, wider community and science.
In the power engineering sector, not only in Croatia, but also in the region and the world, the name KONCAR is today synonymous with tradition, trust, knowledge, innovation and cutting-edge technology.
In a conversation with eKapija, CEO of KONCAR, Gordan Kolak, proudly talks about the previous decades of work and development of this company, how they laid new foundations of development with current technologies, but also about the successes in exports and contribution to the Croatian economy. In light of the energy transition, Kolak points out that there is no success without a synergy of green and smart solutions, and that digitalisation will be key to market positioning.
eKapija: This year, KONCAR is celebrating 100 years of doing business, a jubilee to be proud of, not only for you as a company but for the whole of Croatia. How has KONCAR developed throughout this century of business and on what foundations is it developing today?
– Today, KONCAR Group celebrates 100 years of successful operations, marked by the work and dedication of its scientists, engineers, experts and all employees, through generations of those who have improved and developed a brand recognizable and credible worldwide. This tradition and continuity are deeply ingrained in our history and guarantee a long-term sustainability and commitment to customers, employees and the community. During the century of business, KONCAR has always strived for excellence, innovation and competitiveness, which has been reflected in the development and manufacturing of high-tech products we have exported to almost 130 markets worldwide.
It is difficult to single out the achievements that allowed KONCAR to penetrate numerous markets in which we operate today on the principle of customer specific approach, which distinguishes us from some major global companies. Because of such approach and constant investment in development and in our expertise, today we can proudly say that we are a regional leader in the field of electrical industry and rail solutions.
eKapija: The number of realized investments, the markets you export to, the projects you have worked on around the world, is incredible. What was the biggest challenge in these first 100 years of work?
– There were many challenges, and KONCAR has gone through various socio-political changes throughout its history, but also a significant contraction of the domestic market, which I consider our greatest historical challenge. KONCAR’s development momentum began with the delivery of our first major transformer and the first generator in the 1940s. Today, they, as well as a whole range of other power engineering products and services, are delivered to all continents of the world.
Over the years, we have adapted our business models to current market circumstances, sometimes with more and sometimes with slightly less success. However, with our own growth and development in the domestic market, in a state of rapid industrialization during the 20th century, as early as 1970 we had our areas of activity expanded by integrating new companies under a single brand RADE KONCAR, and by the late ’80s we employed over 24,000 people in Croatia and beyond. After several decades of being a renowned manufacturer of electric locomotives, we have expanded our production to include rail vehicles, such as low-floor trams and trains, high-tech products developed and manufactured at KONCAR.
In the context of global market changes and challenges caused by the collapse of the then significant domestic market, in modern Croatia we are committed to strengthening the commercial foundations of our business and building our niche for a further stable and sustainable path. Today, KONCAR Group operates in the fields of energy, rail vehicles and infrastructure, industry, with a focus on proprietary development and innovation, as well as laboratory testing and certification.
eKapija: To what extent and how did changes in the energy sector affect KONCAR’s development, vision and plans? At one point, the focus was on hydro and thermal facilities, today it’s renewable energy sources, solar panels and wind farms – how did you react to the changes?
In the last decade we have technologically stepped into one of the most dynamic development periods, and in recent years the whole paradigm of the power system that was known until recently has changed. Primary resources in electrical energy generation are changing, the electricity network will soon not be the same, consumer habits and customer expectations are also changing. Energy efficiency, self-sufficiency, prosumers, e-mobility – they all form a new energy reality of today, in which KONCAR actively participates, a testimony to KONCAR responding to these changes rapidly and successfully.
Our goal is to further build up the electricity portfolio, i.e. to strengthen our role in the development and delivery of solutions in the field of renewable energy sources. We have confirmed our capability in the development, production and delivery of power equipment and the construction of complex power plants around the world, primarily hydropower plants. Today we are developing those segments in which we can provide the highest added value, with focus on wind, solar and water energy. Furthermore, the synergy of green and smart will be indispensable in the coming period. A true green transition requires a positive effect on the entire ecosystem.
The previous period was focused on certain targeted and fragmented parts of the energy transition, while the next period will focus on the adaptation and change of entire energy systems. KONCAR has shifted focus to the further development of technologies and products that will combine green and smart, and enable our partners to keep up with European trends, i.e. a global initiative and direction in the electricity field.
(Solar power plant Vis) In the years to come, everything will be digitized, because without digital adaptation you will not be competitive. Thus, KONCAR should provide a technological basis through a comprehensive digital transformation, not only of our products but also of processes, in order to optimize the potential and the capacities available to us. This will require a stronger investment momentum from us to bring our manufacturing facilities to the level necessary for a stronger presence and viability in the global market.
eKapija: What is KONCAR’s greatest strength today when we talk about the contribution to the economy of one country, and even the region?
– Recently, the Croatian business magazine Lider published a report on the largest Croatian net exporters, where, among other things, it presented the results of exports by groups. This export consolidation is significantly closer to the actual consolidated results because in revenues, even in the newly created value, in-group trade was deducted from the total revenues. In total, seven KONCAR companies with EUR 2.5 billion in total exports hold third place, behind INA and Pliva. According to the research, when imports are deducted from these export results, the largest Croatian net exporter of the decade is KONCAR, whose seven companies from the ranking list achieved almost EUR 1.5 billion in net exports.
When we talk about the region, there is no country in which KONCAR does not have significant references, and there are numerous power plants based on KONCAR products. Here I am thinking primarily of hydro power plants and many transformer stations built. For us, the region has always been the key market, and for decades we have been building excellent business relationships with all power companies and transmission system operators in these countries. Bosnia-Herzegovina is certainly a market of special importance for KONCAR and we have been continuously participating in the modernization of existing and construction of new power facilities.
In the Republic of North Macedonia, we are currently revitalizing several plants, but we are also constructing a new 400 kV substation in Ohrid. We are also active in Albania, where KONCAR has achieved significant results in the last 15 years in the field of electricity transmission, and we have accelerated our activities in Montenegro, where we hope to participate to a much greater extent in planned infrastructure projects and thus expand in that market. In the context of size and potential, the Serbian market certainly stands out, where we have not achieved significant results so far, but we certainly hope that in future cooperation with local partners we will be able to contribute to local economic development through energy infrastructure projects.
eKapija: What are your most sought after services, products and expertise?
– If we look at the share in sales revenues, the largest part of them, more precisely 45% comes from the transformer business. This is followed by revenues from engineering services, revenues from rotation machines, rail vehicles and industrial electronics and development. Energy, or more precisely the power engineering industry, has always been the most important part of the revenue structure of KONCAR Group. In the transformer segment, we made several significant new steps worth mentioning last year. In 2020, the company KONCAR – Instrument transformers made a new step forward in the product range and delivered nine transformers for the customer in the USA to self-supply substations with a voltage level of 525 kV and a power of 250 kVA. These are also the largest transformers that the Company has produced so far and among the largest in the world of this type, given the voltage level and power. The customer is one of the most strategically important power companies in the United States.
KONCAR – Distribution and special transformers (KD&ST), with one of the largest electricity distributors in Sweden, contracted two transformers with a nominal power of 130 MVA and three transformers of 120 MVA – voltage level 170 kV. Transformers were purchased for wind farm projects, which confirmed KD&ST is a reliable supplier in this market segment as well. Another significant world-class project was accomplished by KONCAR – Energy Transformers, jointly owned by Siemens Energy and KONCAR. It delivered a network transformer with a nominal power of 425 MVA and a transmission ratio of 525 / 34.5 / (13, 8) kV to a customer from Houston, Texas, for the largest battery storage tank in the world not far from the Moss Landing power plant in California. This transformer, intended for the transmission of electricity from the battery tank to the 500 kV busbar, is also the largest transformer in the world that will be powered from the battery power tank.
Last year, KONCAR intensified its activities in its top markets such as Austria and Germany. New hydropower projects have been contracted on the European market, some of which include the most demanding and largest hydrogenerator revitalizations. KONCAR has a strong presence in the Scandinavian market, but also in many remote markets such as Indonesia. Last year, KONCAR completed the revitalization of HPP Kamburu in Kenya, with the commissioning of the third unit.
In the next two years, we expect to strengthen the share in the rail segment, primarily for the delivery of trams to the Latvian customer and trains to HZ Putnicki prijevoz. It is a great pleasure to walk these days through the manufacturing facilities of KONCAR – Electric Vehicles, where we are busy and diligently working on the final assembly of trams and trains, high-tech products of KONCAR Group’s proprietary development.
eKapija: In the meantime, you have paid special attention to strengthening the research and development department. What are your experts working on now and what technologies and knowledge can your partners and clients rely on in the future?
– Research and development has always been an important component of KONCAR’s business, as well as continuous investment in research and development, in step with technical and technological trends in the industry, which makes us more resilient to the challenges of the future. Here I would certainly point out our Institute of Electrical Engineering, which has been the driver of Koncar Group’s development for past 70 years. An accredited Laboratory Center operates within the Institute, which was established due to the needs of KONCAR Group companies, the Croatian economy and in response to the demands of the global market. Our Laboratory Center consists of eight laboratories trained to perform numerous testing and calibration methods according to the requirements of international standards and technical specifications.
We are also considering a different approach, for example the concept of Innovation Laboratory, i.e. Digital Factory Laboratory, which would enable all companies of KONCAR Group to develop, test, improve, digitize and virtualize their solutions, in preparation for the Internet of Things (IoT). It is important to point out the long-term successful cooperation in this field with professional and academic community, in order to develop and retain professional staff, both in KONCAR and in Croatia.
eKapija: How do you motivate young professionals to get involved in furthering their knowledge, as well as furthering the development of your company and expertise?
– Continuous technological development requires a serious investment in education, and KONCAR has been closely collaborated with faculties in Croatia and other countries from the very beginning. Our Electrical Engineering Institute was founded in 1961, and to this day KONCAR contributed to the Croatian academic and professional community six deans of faculties, six deans of polytechnics, two professors emeritus, more than 30 university professors, more than 50 polytechnic professors and lecturers, two directors of the Rudjer Boskovic Institute, 91 doctoral students, more than 200 masters of science and more than 120 original solutions through approved patents. Finally, the confirmation of excellence consists of 42 national awards for science and two awards of the Croatian Academy of Sciences and Arts for scientific contribution, which carries special weight because all awarded achievements are related to the real challenges in KONCAR business areas.
At KONCAR, employees represent our competitive advantage, enabling us to successfully develop and achieve our business goals all these years. Human resources are certainly deeply rooted into the foundations of our success. The whole set of values that employees live and show every day through their work, and those are responsibility, honesty, competence, innovation, value, excellence, are the same values that customers recognize in KONCAR brand. From the very beginning, through various programs, we recognize and encourage talents and invest in them and their further education and training.
eKapija: Are you planning cooperation with companies from the energy sector and maybe joint participation in other markets?
– KONCAR cooperates with various companies, many of which are micro and small entrepreneurs. They are important partners in individual projects and suppliers of valuable products and services that are integrated into our complex solutions and provide us with a certain set of competencies. Large, global companies can be a partner with whom you create the, so-called, excellence in a niche. An example of this is the 25-year successful cooperation with Siemens. Through this joint venture of globally strong partner Siemens Energy, KONCAR offered specific knowledge and expertise, while Siemens Energy provided access to many markets. We build and empower each other in this interdependence, creating rich benefits to the wider environment. I believe that the entire Croatian and European economy would benefit from more such partnerships, and we will continue to be open to similar cooperation with other global companies in the future.
eKapija: What will you present from KONCAR at the Trebinje Energy Summit this year?
– Considering the role and importance of KONCAR in the overall electricity system of the region, we joined this year’s Summit as a silver sponsor. On the first day, upon the opening, we will hold our expert presentation titled “KONCAR – Solutions for the digitalization of the power system”. As part of the presentation, our experts will provide an overview of references and solutions in the field of battery storage systems, condition monitoring, new digital platforms for control and monitoring systems and other innovations in digital solutions that contribute to a successful green transition. I believe that each participant will have the opportunity to find a topic and area that is of interest for his job or the company he comes from and will have the opportunity to talk in more detail with representatives of several KONCAR Group companies.
In addition, we will join the Summit program by participating in the panel “Hybrid Energy Future”, where we will deep dive into the future of digital energy, faster regional development and the ongoing transition of the energy sector.
The SET 2021 Energy Summit, organized by Elektroprivreda RS and SET, will be held on May 20 and 21, under the auspices of the BiH Ministry of Foreign Trade and Economic Relations, the Republika Srpska Government and Koncar, with general sponsorship by Elnos Group and support from Infinity Group and Dwelt.
Portal eKapija is the media sponsor of the Energy Summit of Trebinje 2021.
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