Steel Expansion – Épduferr Zrt.

Épduferr was founded in 2004 as a limited liability company (Kft.), with Milán Palkovics, now chairman of the board, joining the company in October 2006. Initially focused on steel structure manufacturing, the company transitioned into general contracting in 2007. From the beginning, Épduferr targeted multinational companies, with Tesco being their first major client. This partnership brought stability and predictability in revenue, minimized risks, and provided strong market references, which are crucial in the construction industry. The company started by renovating supermarkets, handling over half of Tesco’s smaller store renovations. Later, they expanded into projects for MOL and began developing divisions focused on commercial and industrial projects, allowing them to secure continuous contracts.

In 2012, Épduferr transitioned into a public limited company (Zrt.), and in 2013, they entered the building materials trade. Over time, the company experimented with various business ventures, including radio, cafés, and mining, but later divested from these to focus on its core activities.

Originally, four owners were involved, but two have since left. The company’s headquarters consist of a 300-square-meter office and a 700-square-meter manufacturing hall, where steel structures are produced. With a staff of approximately 45 employees, the company continues to hire new workers, especially as it expands its steel trading and processing operations. In general contracting, they collaborate with subcontractors, while also having in-house design capabilities if needed.

Épduferr aims to expand its steel trading and processing business both in Hungary and internationally, laying the foundation for foreign market expansion. The goal is to successfully operate these services in global markets as well.

Market Challenges and Adaptation

The pandemic did not significantly disrupt Épduferr’s operations, as the construction industry remained active. However, companies relying on foreign labor, such as structural construction firms, faced greater difficulties.

The global rise in construction material prices has also affected Épduferr.

“Some of our clients agree to compensate for price increases above 5%, and I’ve been able to negotiate such terms in recent contracts. However, this requires a client who understands market conditions and prioritizes deadlines and quality. It’s not practical to place all the financial risk on the contractor—this responsibility should fall on the client rather than the general contractor.”

The demand for construction materials remains high, with wood and steel prices fluctuating daily. Paint prices, for example, have doubled within months.

(Interview conducted in August 2021.)

“In my opinion, such high prices will cause a slowdown, particularly in the housing and residential construction market. At these price levels, many developers may reconsider starting new projects. By next spring, we should have a clearer picture of the situation.” 

Épduferr’s business strategy has proven its effectiveness, as multinational companies often prioritize factors beyond just construction costs. Among the company’s future plans is real estate development.

“A typical real estate developer sits in an office making plans. However, we have a building materials trading division, expertise in general contracting and design, and an extensive supplier network. This allows us to approach projects with greater security and efficiency, giving us stronger reserves and better potential results.”

Expansion and Diversification

One year ago, Épduferr launched an intensive development phase, aiming to diversify its activities, including steel trading and sheet metal processing. A key objective is ensuring that new business units also cater to export markets.

While building materials trading is geographically limited due to high transportation costs, general contracting projects are nationwide, with Épduferr operating at multiple locations across Hungary. The company seeks domestic and international clients for its trading and sheet metal processing divisions, focusing on semi-finished or finished partsfor sectors like machinery, automotive, and electronics.

Stock Market Listing and Future Growth

To finance these developments, the company plans to attract external investors and list its shares on the BÉT Xtend market.

“A stock market listing offers multiple advantages, including increased public visibility, which is particularly beneficial for multinational clients operating in highly regulated environments.”

Multinational companies value partners who understand franchise operations, adhere to environmental standards, and follow similar regulations and expectations.

“We expect that going public will help us attract new partners to support our growth while also providing access to lower-cost financing. This will enable us to expand more quickly and efficiently.”

Long-Term Vision

Looking ahead, the company aims to become one of Hungary’s key enterprises, a stable, multi-faceted business with increasing revenue. In line with this vision, Épduferr is completing the implementation of a software-based enterprise resource planning (ERP) system and an organizational restructuring this year.

“If I could go back in time, I would listen to my instincts more often—they are usually right,” says Milán Palkovics.

While rational decision-making and structured planning are crucial in business, he emphasizes the importance of voicing thoughts and intuitions regarding a company’s operations and future.

In preparation for a potential stock market presence, Épduferr adopted IFRS accounting standards in 2017, a key step toward greater financial transparency.

Palkovics also attributes his entrepreneurial success to his upbringing:

“Being born into a business-oriented environment provided strong support and a deep commitment to work.”