Hartje E-Factory – Riding the e-Wave
Hartje’s new e-bike production facility commissioned last year could not have been opened at a better time – e-bikes have been popular for some time, but the pandemic has pushed demand sky-high.
Germany-based Hermann Hartje KG, a family-owned company that was established in 1895, has developed into one of the leading wholesale bike retailers in Germany, the Netherlands and Austria. While its initial focus was on bicycle production, the business soon grew to include trading in bicycle parts, motorcycles and scooters, as well as auto parts. However, bicycles have remained the company’s core business, accounting for the largest percentage of turnover.
Hartje’s success is based on its individual customer approach and a focus on the traditional values – reliability, precision and efficiency – which have pushed business growth over the decades. This growth has been further accentuated by the introduction of e-bikes and their rising popularity.
Overall, Hermann Hartje KG currently employs approximately 550 staff and 100 seasonal employees at its headquarters in Hoya, northern Germany. In addition, around 250 employees work in the sales offices actively supporting specialist retailers as competent, regional contacts.
In 2017 the company opened a new subsidiary in the Czech Republic to expand its assembly and manufacturing capabilities. Starting with 25 employees in a rented hall, the company moved to invest in an 8,000 m2 factory purpose-built in a green field, in response to sharply rising demand, with a view to expanding the premises further in due course.
The move has been successful but not without its challenges, says CEO Broňa Kubíčková. She herself has a 20-year track record in the cycle industry, first working in her own family company and then helping to set up a Czech facility for a German bicycle business which she ran for 15 years. After leaving the company, she was immediately snatched up by her former biggest customer – Hermann Hartje KG and asked to help establish a production facility in the Czech Republic, taking the role of CEO.
She recalls the beginnings: “The new company, Hartje e-factory, was incorporated in 2017, and the following year we started to produce the first bicycles in rented premises with 25 people. A new production hall was on the agenda from the very beginning. I started to look for a suitable site, and eventually found suitable land close to the railway station.”
The location proved to be a great choice as the vicinity of the railway station made the new factory very visible and easily commutable, and the sheer size of the site provides enough space for potential expansion.
Ms Kubíčková admits that the last few years have been far from plain sailing. “Construction of the hall started in January 2019, and then Covid-19 came. However, the structure was just ready for cladding and roofing and any delays would result in substantial additional cost. In the end, an agreement was reached to complete the factory, which was commissioned in late summer 2020.”
The bicycle expert
The e-Factory has no shortage of potential for future expansion: the 22,000 m2 site in the town of Šumperk in the northern Czech Republic has only been partially built on. Since October last year, 50 employees have been working on two assembly lines as well as Holland Mechanics equipment for wheel production.
“Production roll-out was another challenge, as new technology started to be delivered and installed and staff needed to be trained. However, in terms of people, we have been lucky. Most of the team from the rented hall came with us to the new factory, and so far, we have not had any problems recruiting new people,” acknowledges Ms Kubíčková.
The business has been growing steadily, and this year Hartje e-factory is set to double its output, progressing towards the target of up to 90,000 electric bicycles per year to be reached in the medium term.
This ambitious goal is in line with the parent company’s strategy to secure its own production capability, as well as in response to current market development – e-bike production capacities in Europe continue to grow, partly as a result of economic restrictions and tariffs on Chinese production, but also due to complex and costly logistics.
Ms Kubíčková explains that Hartje e-factory only assembles e-bikes for its German owner. “We started with single-model large-series production but we are gradually expanding the range. In addition to the Victoria urban models, we will also assemble Conway mountain e-bikes with Bosch drives.
Once completed, all products are shipped to Germany to a central warehouse from where they are distributed to independent bicycle dealers in Germany, Austria, Denmark and the Benelux countries. Hartje’s products are also successfully sold in other western European countries.
The next challenge
While the global pandemic has left production at the Czech factory more or less unaffected and, since the launch, the operation has not stopped (with the workforce subject to mandatory regular testing) Covid-19 has brought another challenge – that of disrupted supply chains.
“Since last summer the bicycle sector has been experiencing a tremendous boom. Our suppliers now require an order forecast a year ahead and their capacities are fully booked, some until the end of 2023. As a result of a shortage of containers as well as raw materials, we have had to order components into stock. We were able to manage components orders on time and for the coming season we expect a more or less stable production output, “says Ms Kubíčková.
She reflects that the company is in an unusual position in having key components ready ahead of the specification of bills of materials. “Throughout my entire career in the cycle industry, I have never experienced such a situation. Now, bicycles are sold before they are even manufactured and price does not seem to be an issue. Whether this is sustainable, we will have to see.”
In any case, Hartje e-factory is ready to ramp up production as planned. “We have already purchased some additional technology to be installed this summer, and are looking to recruit more people. We are ready for the next stage of our development,” affirms Ms Kubíčková.