From office in basement to huge european company - meet Baltic Spares Service (interview) -
From office in basement to huge european company - meet Baltic Spares Service (interview)
Date of publication: 30.08.2018

The beginning of the 1990’s was not a perfect time to establish a firm dealing with vessel spare parts. The logistics was poor, offices were sometimes located in basements, robberies were a daily occurrence and, to top it all, one could sometimes find a watchman supposed to guard a warehouse wrapped up in a carpet. Mateusz and Tadeusz Wilkicki and Tadeusz Ślebioda from BSS told us how founders of the Baltic Spares Service coped in that world full of obstacles, why a family firm offers many advantages and what the recipe for success is.

The firm was established in 1990 – almost 30 years ago. How was it created?

Tadeusz Ślebioda: The industry was completely different than what it is today. There were a few monopolists who, in principle, were collecting the majority of technical sourcing deliveries and spare parts, e.g. for ships. Our fathers worked for Baltona, which was one of the larger companies conducting such business in Pomerania. This is why they had a lot of experience they could take advantage of in their own business. Their first office was located at home, in a basement of a tenement house in the Wrzeszcz district and, after that, in a rented garage. They were gradually employing more and more salespeople and industry experts. The firm was developing thanks to their courage. They strived to keep up with western standards, e.g. in the delivery chain, and it was not an easy task. All the technical resources in Poland and the entire office infrastructure were poor.

Mateusz Wilkicki: Some people from technical departments have not had any contact with the English language in shipyards. I think that the fact that our fathers spoke that language fluently was a great advantage at the beginning of the BSS operations. Additionally, they had some old contacts from Baltona, some ships in the West have been built in Poland and that was what gave them a good starting position. What is more, we have started to play an increasingly important role in Russia and Russian language skills turned out to be helpful. However, I believe that the main success factor was that our parents invested in the construction of a warehouse. It required great financial commitment but it paid off and let them stand out on the market.

Are there any situations from that first stage of operations that you remember well?

TŚ: I remember that my father could not sleep at night; it was a very uncertain and dangerous period for business operations. Logistics was poor and deliveries were incoming from all parts of Poland. A delivery with a valuable crankshaft from a Polish producer was supposed to arrive from Poznań once. However, neither the truck nor the crankshaft reached our office because the entire truck with the cargo was simply stolen on the way. Our fathers even hired detective Rutkowski to solve that case but the thief could not be found. We do not know to this day whether the truck was stolen because of the crankshaft or by accident and perhaps the crankshaft was scraped at the price of steel even though it was worth more than 10 such trucks. Thefts were also happening in the office; the entire equipment such as computers was stolen a few times and the watchman guarding the place was wrapped in the carpet.

MW: I used to sit in my father's office once and saw two bulky, sinister guys there. It turned out that they were Chechens hired as guards by one of the contracting parties. Such situations are completely unbelievable in our times.

Tadeusz Wilkicki: In one the first years, like 1991 or 1992, a large ship-owner bringing ships to the Renovation Shipyard asked us whether we had the 6ASL25D aggregate engine. We answered “yes” because we had a similar engine: 6L25D. We got a good price: 100-150 thousand dollars, and started to check everything carefully. Unfortunately, it turned out that the two engines were completely different, with different powers. There were some similarities but many parameters were different. We wrote to the ship-owner stating that we had to refuse to execute the order because we were unable to meet all the obligations. We had a telefax installed because it was difficult to get a phone then and, at some moment, it started printing about 10 metres of text. It was a message from a team of lawyers working for a powerful company stating, in short: “No problem, the ship-owner will buy that engine from the producer where it will be four times more expensive and we will send the bill to you”. We were in a tight spot, tried to come up with something and, finally, it turned out that the engine could be rebuilt; and we did it. The ship-owner replaced the engine and leaved satisfied and we have been working with him for many years.

Another situation, also from early 1990’s: we were in touch with a Latvian firm called the Latvian Shipping Company. They bought an engine from us: an unused 8BAH22. We got the money, the engine left for Riga; everything was as it should be. A few years later, we received an enquiry from one of our main German contracting parties asking about a shaft for that engine. The construction was out of date and I initially thought that there was no chance to get it. However, something made me hesitate and I called the above-mentioned colleagues in Riga. They told me that I was crazy, that the engines were installed a long time ago. I lost hope then but kept searching. A colleague from Riga called me on the following day and said: “Listen, I was looking at the yard, saw something covered in tarpaulin; I got closer to see better and it was your engine! It is available for sale, I no longer need it”. And I got to sell that engine again. Emergency situations are great learning opportunities and we have also been very lucky.

You have been watching the firm grow from childhood. Is your presence here a natural consequence?

TŚ: I was 7 when our fathers established the firm. I remember these first steps and uncertainty about how it would develop but, in principle, I have identified with this firm from my yearly years, it was a part of me. I learned that you should have your own area to take care about. I did not know for sure that I would work there but subconsciously felt that I could have something to do with it in the future. I worked for BSS in the 8th grade to earn some money; I started out as a rack runner, was helping, cleaning parts, learning the basics of how to assemble pumps and other equipment. Later, I was growing into office positions. It is amazing that we are the next generation, taking the lead.

MW: I feel that BSS has found itself in its rightful place, among leaders in the sector. Many European firms are closing their warehouses due to the deep crisis that our industry has been facing for the last 20 years, some of them even left the market but our warehouses are being expanded all the time; perhaps it is not very advantageous from the economic perspective but the firm is growing in the longer term. I do not know whether my father expected BSS to grow to its current size. For me, it was natural and it seems that I have always been going in this direction.

There is no denying that BSS holds a strong position on the Polish and European markets. What distinguishes your firm from the rest of the market, what are its strengths?

TŚ: We focused on narrow specialisations. We do not deliver parts for all engines; we only deliver specific models: Sulzer and aggregate engines such as MAN. We have also built complete warehouses and offer the smallest parts such as gaskets as well as complete shafts or blocks. We can dispatch them on a daily basis and ship-owners know us as a reliable firm, able to deliver the goods very quickly in the event of a failure or planned renovation. We put great stress on the quality; everything is original. We also develop the quality control; we are on the point of investing in measurement machines for the CNC quality control. Such machines make it possible to get a drawing of an inverse detail for the production; thanks to them, we can carefully verify the quality and check whether a product complies with our standards.

MW: I think that the ZGODA brand is also a vital component. The company with great traditions that started the business with the mining machinery was also a producer of engines installed mainly in vessels built in Poland (what is more, these engines are still in operation!). Unfortunately, the company went bankrupt in 1990’s and BSS purchased the rights to its firm, documentation and warehouses; it became ZGODA and sustained its excellent quality. Our size also distinguishes us because a firm employing 25 people in this sector is really large.

Who are your employees?

MW: It has been known for years that people employed by our firm have not been leaving. When I and Tadeusz became a part of it, we found employees working there for 15 years. People who have been here from the very beginning have just started to retire. Therefore, one or two places for new people become vacant each year. Our employees are fluent in English and Russian and staff turnover is not very high so I suppose we can assume that people like it here.

You participate in various fairs: Posidonia, Balt Expo or SMM to be held in September. What are the advantages of the participation in such events?

MW: We have learned that fairs help increase brand recognition. We do not see fairs as an opportunity to win new clients. We just affirm our logo and firm in people’s awareness. States and trends change but faces remain the same. It is nice to meet people even once in a year or two, to talk face to face to someone with whom you have only been exchanging some e-mails.

TŚ: I would like to add that fairs allow us to discuss cooperation development possibilities with clients in a calm atmosphere and to compare ourselves with other suppliers. They allow us to see at what stage competitors' projects or objectives are on certain markets and at certain times.

Any challenges?

MW: For me, winning new clients or gaining the trust of those whom we have been trying to convince for some time is always a challenge.

TŚ: It certainly is a challenge to develop new types of engines. Ships are being scrapped regularly, one has to stay informed about new series and learn about each new model in time. We need time to learn the complete information and not to lag behind. To gain a position with new engines as well. The entire production has moved to Korea and China and we need to have these engines in our warehouse and have them tested. We want to retain our leading position in the sector where we have been leading so far.

What are your other plans for the future?

TŚ: Engine producers introduce so many components so quickly that it is not always possible to keep up with them; the market of spare parts is very unpredictable. We are in a way forced to look for business profiles other than just the delivery of parts. We would like to develop the sector of ship renovation and introduce the production so that we would be able to produce and regenerate for our needs rather than outsource that task.

MW: Even more so because we carry out renovations already; we would like to develop that part of operations. We have also bought some land and will construct another hall nearby; we will obtain more space for the execution of our plans.

An opportunity to ask our interlocutors about BSS, about the continuation of traditions of the ZGODA brand and other plans for the future will arise at one of the largest and most important events for the global ship industry: the SMM fair in Hamburg to be held on September 4-7.