László Dallos, Founder and Managing Director

The history of Z Elektronika Kft. started in 1997, when László Zákány founded “Zákány Elektronikai Kft.”. László Dallos, founder and Managing Director of the successor company, also worked here. He gained experience at a Finnish multinational in Pécs in the early 2000s, and after that “I tried my hand at designing and repairing electronics and making software as a sole trader”, he says. Then in 2006, “László asked me to join him again”, he adds. “Uncle László” had a very good insight into the elevator market, and that’s where the first orders came from. László Dallos finally said yes in 2007 and took over the company. At the time, he was determined to open up to other industries. “In the world of multinationals, I learned how to produce large series”. The manager has reinvested all profits in the business, increasing the range of machinery and introducing new technologies.

Later, when the Finnish giant closed its factory in Pécs, a skilled and experienced workforce appeared on the market, which helped the company to grow. Today, Z Elektronika employs 120 people. Starting in the basement of the previous owner’s family home, after two or three moves, they arrived at the current site. The current development under the Hungarian Multi Programme provides an opportunity for further expansion.

The activity of Z Elektronika has two main elements. In part, electronics design and engineering services. They can also create software and design the enclosure of the device as required.

The larger part is contract manufacturing, but not in the traditional way. If the customer so wishes, they will source the materials and organise production after receiving the docu- mentation. This requires serious logistics preparation.

“When multinational clients visit us, they are always amazed at the depth of engineering knowledge we have. They say they rarely see this at SMEs”, said László Dallos.

destinations are Germany, Switzerland, Greece, and Liechten- stein. SMEs are the backbone of the customer base, but there are also multinationals and start-ups.

The business was growing steadily, step by step. László Dallos mentions one negative event. “When we bought the current hall in an online auction, the process took 4-5 hours, which was very stressful. After we won, dealing with the banks and the seller was also nerve-wracking”.

According to the owner, engineering, design and development have always been key in the life of the company. Contract manufacturing accounts for the majority of turnover but, as competition in the market intensifies, it will be the increase in added value that will drive the business forward. It wants to increase the proportion of its own products in the portfolio.

Electronics manufacturing is typically a segment where there is a lot of competition for customers, so margins are small. We must remain competitive, and to do that we need the latest machinery, which is of course very expensive. “Over the past eleven or so years we have managed to get banks to treat us as a client, and we have relations with several banks. With current credit conditions, we can invest competitively”.

The pandemic has also disrupted life at Z Elektronika. “We saw a decline in the customer base as the situation was getting unpredictable everywhere”, he said. The measures taken have not resulted in any contamination within the organisation, so production has continued within the given limits. However,  raw material sourcing was a problem, shipping costs increased, and there is a worldwide shortage of printed circuit boards and chips. “We are in constant contact with our customers; there are parts that we buy for ten euros instead of one euro”. However, it is very difficult to keep the cost side of the equation from rising.

The company crossed the HUF 1 billion sales revenue mark in 2018. In previous years, there have been many new market opportunities and they have managed to recruit well-qualified, fresh staff. Sales revenue increased to HUF 1.6 billion in 2019 and HUF 1.8 billion last year. Despite the pandemic, they are performing above plan this year.

“A key element for the future will be the transformation of the company’s organisational structure. We started the due diligence and organisational development of the company.” Currently, project managers and engineers are under the Managing Director. “By the time the new factory is ready, this team will also need a new level of management”, said László Dallos. Last year, they also started to build their brand, which will also benefit the launch of their proprietary products planned for the next period.

“For me, it has always been very important to have a human tone within the company and to have people who trust each other. Thanks to this we have a very low employee turnover rate”, says László Dallos, who also stressed the importance of in-house education.