Mónika Nagy, Owner and Company Manager
At the company, the natural expectation of the customer is a good quality product, on time, flexibly adapted to the needs of the customer—she stressed, adding that their customer base is stable, with many of which they have been working for 10-15 years. The predecessor of the company, Mezőgép Debrecen Kft. was founded in 1991. MST Engineering Kft. was set up in 2011 because a Swiss capital investor wanted to take a stake in the company. After its establishment, MST was exclusively active in foreign trade until 2013, when it took over Mezőgép’s entire production activity (equipment, employees, machines, supplier and customer bases, and with it the market experience of thirty years). The predecessor remained an asset manager. MST is currently owned by three individuals; Mónika Nagy has been one of them for 27 years, including her years with the predecessor.
The main profile is the manufacture and commercial sale of metal parts, components and machinery. For the time being, they do not have their own products in the range. But a plan is already taking shape: they are analysing the design furniture market. They work almost exclusively with customers in Western Europe, with 99+ percent of their annual sales revenue coming from Germany, Liechtenstein, Switzerland and the Netherlands, with Austria accounting for a negligible share. They also have Hungarian customers, but their share of sales revenue in Hungary is still 0.1%. Among the customers, the agricultural industry and manufacturers of packaging and finishing machinery have greater weight. However, there is a huge variation in the size, composition and complexity of the products, as they are made to order.
The results of the last 5-6 years are impressive. Sales doubled between 2015 and 2019, growing by an average of 17% a year, apart from last year’s pandemic-related downturn, but there were years when the growth rate reached 25%. The headcount has also nearly doubled, from 60 to nearly 100. The explanation for the results, according to Mónika Nagy, is the excellent team. That’s what the company sees as its greatest asset: it has a highly dedicated team of professionals, and most believe that they genuinely create value every day they go to work.
To do this, the owners try to give everything they need: money, horses and the right atmosphere”, says the manager. They have made significant investments in recent years, both to modernise existing capacity and to bring in new capacities. In the future, they want to offer a more comprehensive service to their existing and future customers. They are constantly looking at what to outsource to their suppliers and what to keep in-house. To this end, recent developments have included the purchase of laser cutting equipment, edge bending machines, and robots, as well as micro-precision tools and 3D coordinate measuring capabilities.
Last year also left its mark on the MST. In March, they reviewed what reserves they had and put protective measures in place, but they never stopped for a moment. They decided that they would produce for as long as there was iron in the warehouse and, if there were no orders, they would put it in storage. They survived by pushing ahead. Not a single employee had to be laid off. They have of course called for help, external funding,
in order to make up for the loss of sales revenue, but they are confident that the decline will be made up next year at the latest. Their development continued last year. At the beginning of the pandemic, in March, they achieved their highest monthly sales revenue ever, by manufacturing parts that had been previously ordered from China by a customer due to unfortunate events.
Mónika Nagy is optimistic about the figures for 2021. Based on the data available in May and visible customer demand, she is confident that the 2020 caution among customers will end this year. However, she knows that it is not possible to expect a company to grow its turnover by 17-20% year on year, but she always asks her team to deliver a healthy 6-8%. That’s the minimum.
In securing the necessary funding for development, the manager is strongly in favour of external funding. She is happy to use credit. However, the investments made so far have also been partly financed with EU funding. But they have also used leasing, typically with fixed interest rates. They also participated in the Hungarian Multi Programme.
The period ahead will be no less tense. They currently operate in a rented building in Debrecen, in the Határ út industrial park on 2,700 square metres, but space is tight. They are planning their own hall. They have already purchased a 4-hectare parcel in the southern industrial park, where they will build a hall and office building of nearly 7,000 square metres in one and a half years. The volume of the investment will reach HUF 4.5 billion.
“To finance this, we want to put together a mix that is safe for all players”, says the CEO, with a sparkle in her eyes. She is a true entrepreneur. She feels lucky to be able to do this. She believes that anyone who feels strong enough should try it. However, it is not recommended for those who cannot cope with stress and are not looking to face new challenges at any moment.
She is a long way from retirement, although sometimes she gets very tired. She is preparing to hand over the business at some point, and now her two children seem to like this fine family business empire and have the interest to continue it. Her children are 20 and 22 years old. One is studying economics, the other is studying mechanical engineering. Putting the company in foreign hands is not an option at the moment.
Mónika Nagy believes that, in five years’ time, the current owners will still be in place, but the next generation will be actively involved in the business.