Snaigė CEO’s Pandemic Sologue: Biggest Opportunities Come When There Is No Stability

In the “Café con Gerente” interview cycle, Mindaugas Sologubas, head of the Alytus-based production company, talks about the hills the business will have to traverse this year and how the pandemic helped accelerate long-planned plans.

– Each sector faced different challenges after last year’s pandemic. What were your main challenges?

– We experienced the biggest challenge and surprise in the middle of March last year, when suddenly everything stopped: the walls and our partner stores closed both in Lithuania and abroad. That initial impact is the most memorable.

The Lithuanian shutdown was less terrible for us, because about 90 percent. our products are exported. However, the pandemic covered all of Europe. Immediately there were problems with transportation and the entry of raw materials. All normally working processes have started to break down in places you wouldn’t even have thought of before.

At the same time, there was a great concern for people: how much the pandemic will affect them, how safe you will be.

In autumn, history repeated itself again, but we already knew how to proceed.

– At what point in the last year did you have to stop production or reduce volumes?

– In the spring we worked at minimum capacity for a few weeks, some units did not work at all, there were stops, but then we began to work normally and accumulate production, because we realized that one day this situation must end. I don’t regret that. Maybe even a little to the contrary: I’m sorry that the activity has been suspended a bit. Now I would say that there is no need to slow down, produce and store.

– Foreign markets are very important to you. Last year, without a pandemic, is said to have marked the end of our normal globalization, when states began to take care of only themselves. Do you think that in the long run nothing will change in international trade and with the markets you already have?

– I would say that this has two aspects. First of all, last year we saw everyone, in terms of employees, partners, states, and heads of state, in a completely different light. It is one thing how they behave and declare that they behave under normal conditions. Another is how they behave in shock or panic. That’s when the true values ​​are revealed. It can be said that once the pandemic subsides, the work with some partners and institutions will no longer be as it was when they saw their behavior in critical situations. After all, popular wisdom says that you will meet a friend in adversity. And we could see that very clearly all over the world.

Another thing is the challenges that have been, now I see them as a new reality and opportunity. Both companies and the global economy are human in nature and know how to adapt very quickly. For example, what we got in November, I wouldn’t even call it a challenge. This is the reality in which you have to work and live.

– What do you plan for this year?

– They will be like roller coasters, because we cannot yet predict where the lack of a smooth process will occur. Do not forget that it is also a time of opportunity, because the best opportunities come when there is no stability.

– What opportunities did you find last year?

– With the arrival of vaccines, the need for refrigerators to store them arose. We have offered several suitable products to the market. In Lithuania, both municipalities and hospitals started buying these refrigerators.

We further develop the line of professional medical refrigerators. I hope to introduce the new products later this year. Even if the need to store vaccines decreases, these coolers will continue to be in demand and necessary. We have talked about its creation before, but it was the pandemic that accelerated the process.

In the event of a pandemic, large amounts of food had to be stored. For this, we have offered specialized refrigerators for storage. They can contain large amounts of various foods in large packages. Represents a basement or cold room, it can be stored in a garage or utility room. I can be proud that these products are extremely popular in Germany.

The pandemic prompted us to open an electronic store. Now we are very happy because we can deliver those products that are not sold in Lithuania, we sell and deliver spare parts and accessories.

– In general, how do you think the world economy will continue this year? Will we have a crisis that is mentioned often?

– The crisis is not a static phenomenon. She is always on the go. I would not see a global crisis. Yes, individual sectors, such as tourism, have poor operating conditions at the moment, but there are also many sectors that can perform well enough, such as manufacturing.

For us as growers, the biggest challenge this year will be the lack of stability. Production can only be efficient when it is stable. It is clear that we have started the year again with different limitations in Europe. However, it is likely that in summer everything will return to normal and the tourism sector will move.

On the other hand, forecasting is difficult because all forecasts that are based on historical data are no longer valid.

– And your investment projects this year? Doesn’t that lack of stability force you to give up?

– We do not stop our investment projects, on the contrary, if we had more resources, there would be more of those projects.

The pandemic may have changed the order of those projects, like the medical refrigerators or e-commerce that I mentioned.

This year we promise to introduce new retro refrigerators with a bottom freezer compartment. Our retro refrigerators are very popular throughout Europe and even in Morocco, so we felt the need to expand this line in addition to offering more colors.

We will also offer our customers other products, such as tinted stainless steel refrigerators.

One of the strategic activities of the company will continue to be the development of the professional refrigeration equipment category. This year, we will add refrigerators for the restaurant industry to this category.

– What are the main lessons you personally learned over the past year?

– The first and most important lesson is not to give in to general panic. The key to managing this crisis was not to panic, because otherwise hasty and wrong decisions are often made. You should always stop and look at the situation coldly and sideways.

The second lesson, which only confirmed the already known truth, is to always have plans B, C and D, because sometimes even the most unexpected scenarios can take over and happen.

– How has the behavior of the population and the demand for household appliances changed? Did it bring you good or bad knowledge?

– The pandemic has stopped many things: trips, events, public meetings, restaurants and closed cafes. But life was boiling more and more at home. How popular to say now, in homes. People began to prepare not only breakfast at home, but also lunch and dinner. As a result, many needed a new stove, dishwasher, or refrigerator.

According to data from the research company BRC group, during the 11 months of this year, the total growth of large household appliances in Lithuania compared to the previous year was 9 percent. All the categories grew, but the freezers more. Its growth was 48 percent. Understandably, people felt the need to store products for the long term. We also sold a lot of freezers, we couldn’t even produce them during the summer.

Refrigerators grew much more modestly: 7 percent. compared to last year’s 11-month parades.

Consumers have also started shopping online more boldly. However, selling large appliances online is not so straightforward, as the first wave of coronavirus showed: There were a shortage of people, there was a lack of logistics and it was too expensive. And the retail business was not yet ready for a glimpse like selling large appliances online. However, according to research company BRC group, online sales of large household appliances accounted for 47 percent. For comparison, at the beginning of the year only 28 percent.

In other categories, it is interesting that significantly, even 16 percent. – Iron sales have fallen: teleworking requires less straightforward shirts or dresses. However, the vacuum cleaner category increased by 17%. also significantly 27 percent. sales of coffee apartments grew.

– As you mentioned, last year you offered refrigerators to store vaccines. Are you going in that direction with your short-term solution or focused vision?

– We have seen opportunities in this market for a long time and have developed them accordingly. This is our long-term project and we will definitely strengthen this category. The pandemic simply accelerated this process as this area became more relevant.

Even after this pandemic subsides, vaccination and medical activities will not go away, and in any case will grow as technology advances and a person’s average life expectancy increases. Therefore, I don’t see any assumption that the demand for medical products will decrease. This is our long-term project, the first step of which was simply taken faster than planned.