The CEO of M+S Hydraulic PLC, on being the first choice of global manufacturers
When talking about successful business stories in Bulgaria, M+S Hydraulic PLC is one of the best examples. Based in Kazanlak, in the Valley of Roses and Thracian Kings, it will soon celebrate 60 years on the market. In these years, it has constantly evolved and adapted its activities to stay relevant, both in the pre-1989 planned economy and in the free, globalised market of today as a manufacturer of hydraulic orbital motors and steering units used in wide variety of sectors.
A significant part of the success of M+S Hydraulic took place under the guidance of Vladimir Spasov. He started in the company in 2000, as a marketing specialist, and climbed all the steps in the company career ladder – Deputy Sales Director, Sales Director, and Deputy Director, before becoming its CEO in 2013. He has been at the helm of M+S Hydraulic ever since, leading it through times of challenges and growth.
What did you learn as the CEO of M+S Hydraulic?
I learned a lot. That when you have the proper skillset and ambition, you can achieve all your goals. When I started at M+S Hydraulic, in 2000, the annual turnover was 22 million leva. In 2021, our turnover was about 150 million. If everything goes as planned, in 2022 it should increase by 20%.
In my career at M+S Hydraulic I have met a great number of challenges, but they only made me stronger.
Success does not come easily neither in your personal, nor in your professional life. You have to give the best of you in both, and even more than you have expected you are capable of. The past 14 years were particularly challenging, but the main factor for our success was the opportunity to create a good team.
This is a hard task. My philosophy in team building is to find not subordinates but like-minded people, partners who believe in and share my causes. When you are surrounded by such people and apply a coaching approach, things happen more easily.
Is this one of the keys to success for you?
Yes, definitely. Everyone at M+S Hydraulic, not only the top and mid-level management, but also the workers, know what they do and why they do it. We organise special trainings to help everyone understand what their labour creates. That their work has the power to transform steel and cast iron into hydraulic motors or steering units used in a number of different industries. It is satisfactory to see something that you have made used in the agriculture machines that collect the wheat for your bread and the building machines building the roads that you drive on, to quote just two examples for the application of M+S Hydraulic products. This is one of the biggest advantages of M+S Hydraulic – that the fields in which our products are used are so diverse. This allows good diversification of risk and makes us more resilient, if one of the spheres in which our clients operate is experiencing a crisis.
How did you achieve this?
We have constantly evolved and adapted to the environment. When it was created, in 1963, M+S Hydraulic serviced and maintained road construction machines. In 1972 it focused on manufacturing of hydraulic devices, and in 1976 and 1981 it purchased two licences for the main groups of products that we still make – hydraulic motors and steering units. Initially, the company worked mainly for Balkancar, a Bulgarian fork-lifts manufacturer.
Sadly, after 1989 Balkancar did not survive the transformation to a free market economy. But M+S Hydraulic was considerate to adapt and thrive. While searching for its soul, it pushed towards developing and expanding its product range. Initially, it focused on the spare parts market, aiming to become a recognisable brand. Then it shifted its focus on improving the qualities of its products and upgrading its manufacturing technologies.
In 1995, M+S Hydraulic became the first Bulgarian company to receive an ISO:9001 quality certificate.
By doing this and focusing on the quality of its products, M+S Hydraulic successfully transformed into an original equipment manufacturer.
Today, we are proud to say that over 75% of our products are the first choice of many global manufacturers. We are exclusively export oriented and over 98% of our products are sold abroad, to all continents, by 40 distributors to over 300 end clients.
What makes M+S Hydraulic different?
That we focus on the client's needs and apply a client-oriented approach. This makes us the first choice for so many companies. As a side effect to this comes the development of our standardised production.
This policy has allowed us to not only survive all the different crises that have struck the local and global economy in the past 15 years, but to become stronger and more resilient. As Churchill has said, it is important that in a moment of crisis you do not cut your expenses, but find ways to increase your incomes. During each of these crises we managed to develop new products that are of use to new clients, as so many of them also recognised the crisis as an opportunity to find alternative solutions. We provided those to them. This is why when the crises went away, we were ready with new, highly specialised products and were able to find new, big and serious clients.
What was the biggest challenge for you as the leader of M+S Hydraulic?
For me, personally, it was to secure the company's evolution towards offering a complex supply of hydraulic equipment. Each year we expand our product range. My ambition is in the next 7-8 years to make M+S Hydraulic a global leader in hydraulics. Then our position on the market would be at a completely new level.
What challenges the company experiences?
One of the most significant challenges that M+S Hydraulic, just like any company nowadays, faces are the never-ending crises that constantly come and go. While the 2008-2009 global financial crisis had relatively logical causes, the events that followed after the Covid-19 pandemic are geopolitical in nature. They have nothing to do with the economy and industry. This has put all companies in a very difficult situation. We experience hardships such as access to energy sources, soaring electricity prices, shortage of raw materials, global inflation and a pandemic. And the war in Ukraine has exacerbated this further.
Meanwhile, it seems that a number of Bulgarian governments have systematically failed to recognise the plight of the business and to help it adequately. Supporting the business in this situation is crucial as it provides so many jobs in Bulgaria. When it suffers, the ordinary workers are the ones who would bear the brunt.
How do you, at M+S Hydraulic, deal with these problems?
We are like circus balancers. We have several projects aiming to reduce our dependence on electricity suppliers. Soon, our second photovoltaic park will start operating. However, even with these measures we would be able to supply ourselves with just 40% of the energy we need.
The lack of enough skilled workers is another challenge that Bulgarian business faces. What is your experience with it at M+S Hydraulic?
For the past few years finding and training professionals has been one of the greatest challenges for companies in Bulgaria, Europe and even the world. At M+S Hydraulic work 1,300 people and we continue to push policies to create the staff that we need.
We were one of the first companies in Bulgaria to start a project for dual education that allows high-school students to train for work in manufacturing.
In the past 5 years, about 200 children participated in our programme for dual education. We have hired less than 20 of them, but nevertheless we are satisfied that we have trained a new generation of professionals that could be useful not only to us, but to other businesses and Bulgaria in general.
What happened to the other 180+?
The dual form of education is a good initiative, but needs a clear perspective about what happens to students after they graduate school. Until recently, Bulgaria was the country with the highest percentage of high school graduates who continued studying at some university. I say "some," because often the higher education they pursue has nothing to do with what they have studied at school. Often, this university education is useless on the real job market. For example, we at M+S Hydraulic have over 250 people with university degrees working manufacturing jobs. All of them have spent years of their lives, and their parents and the state have invested money in an education that was rendered useless.
Dual education is not the only effort that we, at M+S Hydraulic, make to improve the quality of Bulgarian workforce.
Four years ago, together with the local municipality, other local industries and the Technical University in Sofia, we opened a technical college in Kazanlak. Some of our workers study there; we cover their fees and provide paid leave while they study. They graduate as bachelors in technical science. Since 2021, they can even get a masters degree in machine construction.
Kazanlak is an industrial town, over 50% of its residents are employed in industry. We, the business, need such people.
What was your biggest personal achievement as a CEO of M+S Hydraulic?
I cannot say that I have one particular achievement, but it could be the fact that M+S Hydraulic became a global player with a strong position on the market. That it constantly improves and is one of Bulgaria's best employers. Our workers benefit from being a part of M+S Hydraulic and have one of the best collective labour agreements in Bulgaria. We have achieved a symbiosis between reaching our business goals and keeping both workers and shareholders satisfied.
Why should we remember the name of M+S Hydraulic? How do you improve Bulgaria's economy?
M+S Hydraulic is a public company that is very transparent and is one of the blue chips on the Bulgarian Stock Exchange. In the past few years we have received several awards for best employers and in 2021 we became Investor of the Year for the investments we have made. M+S Hydraulic is also one of the very few Bulgarian companies included in three of the indexes that Dow Jones uses to measure Bulgarian economy. This is a telling sign on our role and contribution to the Bulgarian economy.