'You need a clear vision of your goal, but also a bit of luck'

By Paul Rackstraw
Published: Friday, 30 August 2019

When Erik Zobec launched Seven Refractories at the height of the eurozone crisis, few would have believed the company would go on to become one of the world’s leading monolithics producers. As Seven approaches 10 years in business, he talks to Ross Davies about its ascent.

On the face of it, 2010 was hardly the most auspicious year to launch a new business.

The Great Recession which followed the 2008-9 banking crisis in the United States and Europe cast a long shadow across the eurozone, resulting in a series of national bailouts.

Yet, while economists mulled the possibility of implosion in the eurozone, Erik Zobec was busy hunting for financial backing to launch a new monolithic refractory company. 

With banks in no position to lend, Zobec assembled a group of seven benefactors - including himself - who eventually managed to cobble together just enough to set up a new plant in Divača, Slovenia.

Later that year, Seven Refractories - a nod to its septet of backers - commenced operations with Zobec as chief executive officer. 

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Erik Zobec was one of the founders of Seven Refractories in 2010.
Seven Refractories 

Those early struggles have since paid dividends. Next year, the group will celebrate ten years in business. In that time, Seven Refractories has become recognized as offering one of the largest portfolios of monolithic refractory products in the world. 

At the last count, its annual turnover stood in excess of €65 million ($72.6 million*), with a customer base spread across 45 countries.

"Never in our wildest dreams did we envisage where we would get to today, when we first set out," Zobec says of his company, whose original shareholders all remain in place.

"When you start something new, you’re not thinking about making a huge profit or becoming rich - all you’re really thinking about is survival and justifying all the effort and sleepless nights. Seven was born out of hard times, but it was also born out of a lot of energy and hope."

Recounting Seven’s trajectory, Zobec’s pride is palpable. The company’s success is reflective of a strong personal work ethic that has driven Zobec’s career over the past two decades. 

Not that refractories were always on his radar. Growing up in the Slovenian-speaking city of Trieste in northeast Italy, Zobec’s first career ambitions ranged from being a boat and car designer to a Formula 1 engineer - the latter sparked by his childhood idol, racing driver Ayrton Senna.

"Inspiration comes from many sources, but if I had to name a prominent figure, it would be Senna," says Zobec. "He had amazing charisma, on top of an intense dedication, deep knowledge and great heart."

Though a career in Formula 1 was not to be, Zobec found himself studying mechanical engineering at the University of Trieste. While drawn to the technical aspects of his field, in his final year Zobec also began attending management seminars, which he credits as a lightbulb moment for his subsequent career.

"It was a really important moment in my life," reflects Zobec. "That’s when I started thinking, 'this technical stuff is great, but maybe management might be the thing that gives me a career’."

Not long after graduating with a PhD, Zobec was recruited for a purchase management position with an Austrian fused alumina company, something he describes as coming completely out of the blue, having "never even bought a screw before!"

Zobec was thrown in at the deep end, relocating to Austria with his wife and working in an unfamiliar language.

"Those first few months were really hard," he says. "But after that, everything fell into place. We ended up staying in Austria for six years. Looking back, I was incredibly lucky they took a chance on a guy like me, with my bad German and limited career experience, but they did."

Without divulging names, Zobec speaks glowingly of the individual who headhunted him. 

"He wasn’t that much older than me, maybe in his late 20s or early 30s, but he was a real inspiration," he says. "Coming from Italy, where at that time, the average management age was 60-plus, and where nepotism was rife in business culture, it really impressed me to see a manager so young. It gave me hope that I wouldn’t have to wait 40 years to reach the same position."

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Inspiration: Ayrton Senna
Juan Pablo Donoso, via Flickr 

The move to monolithics 

Zobec’s time in Austria served as springboard to enter the world of monolithic refractories. He served as a general manager at a German company for the next 15 years, before eventually breaking away to set up Seven in 2010. 

From the outset, Zobec and his team made a point of being global in their outlook. As well as his native tongue, Zobec is fluent in German, English, Russian, French and Portuguese. Seven’s workforce is comprised of 25 different nationalities and its production footprint spans Europe, Central Asia and India. 

"Being curious about the world is so important," he says. "At this company, there are so many cultures and nationalities coming together - it also keeps you young at heart."

What is abundantly clear from speaking with Zobec is that he loves his job. He cherishes the business of developing and selling new products (Seven’s portfolio totals over 800 offerings) and fostering young talent. This, again, he credits to his former Austrian mentor.

"In any business, choosing the right people and keeping them on board represent the key for every growth story," says Zobec. "The lesson I learned from my first boss, and which I try to pass onto all the youngsters I’ve recruited, is that when you take a job, above all else, look at the person offering you the job."

"Of course, the company, environment and products are important, but the person who offers to recruit you should instill confidence in you. That’s what I try to do."

Testament to a childhood spent by water - the Gulf of Trieste lies in the northeast corner of the Adriatic - Zobec lists windsurfing, kitesurfing and kayaking as some of his favorite pursuits outside the office. 

"I also like the simple things - spending time with my family, watching the football with my son," he says. "That said, I have to confess there is no strict division of work and leisure. A lot of my colleagues are close friends. There is never a morning where I wake up thinking, 'Damn, I have to go to work’."

New ventures and expansions

Despite Seven’s international standing, there is an undiminished entrepreneurial spirit to Zobec. This year, the company has gone about expanding its plants in Slovenia and Kazakhstan and launched a joint venture in India and yet Zobec has somehow found time to involve himself in a start-up coffee company in his hometown. 

But, he chuckles, he will not be swapping refractories for Robusta beans anytime soon. Seven is still very much in growth mode and earlier this year, the group announced plans to increase the capacity of its plant in Astana, Kazakhstan, by 10,000 tonnes per year of taphole clay.

As part of a joint venture with India’s Dalmia Bharat Group - known as Dalmia Seven - in May, the group inaugurated a new monolithics production line at its plant in Katni, Madhya Pradesh. 

In a bid to serve the growing demand of Indian steel producers, this new production line has enhanced the facility’s overall capacity to 45,000 tpy. It is equipped with state-of-the-art feeding and mixing circuit, controlled by centralized processing software and is able deliver up to 50 tonnes per shift.

According to Zobec, entering the Indian market was a "no-brainer".

"India is one of very few places in the world where you can be sure there will be growth - even if you don’t know exactly how quick it will be," he explains.

"We started selling to India around five years ago, but really wanted to develop a strong local presence there. But finding the right partner can take time, and requires some good fortune. Luckily, Dalmia came to us and we ended up joining forces. Sales are going really well."

As Seven has grown, its main plant in Divača has also expanded. "When we initially designed the factory, we had perfect circumstances: lots of knowledge coupled with a greenfield situation," Zobec says.

"When you see existing refractory production factories, you often notice inefficiencies, as lots of the sites have been around forever. Divača was designed as a modern facility, based on efficiency, flexibility and modularity."

As well as serving the iron and cement industries, Seven’s most prominent clients include ArcelorMittal, the world’s largest steel producer; Russia’s Novolipetsk Steel; Austria’s Voestalpine; and Turkey’s Isdemir.

Green credentials

In recent years, both steel and refractory producers have found themselves in the spotlight over their environmental performance. Seven has long been ahead of the curve on this front, insists Zobec, thanks to it alumina-based taphole clays, which carry numerous energy advantages over standard bricks used in steel production.

"The entire steel industry is in the midst of a quantum leap from traditional bricks to monolithics," he says. "All our products are designed to support our customers in pursuing a joint green goal - our taphole clays are the most outstanding example, but it is also the guiding star of our entire product design."

On top of this, all Seven’s plants are run at least partly on solar energy.

"We refer to this approach as 'environmentally gentle’, as opposed to 'environmentally friendly’. Friendly is a quick smile; gentle is a touch, an action, something that’s hands-on. This makes us one of the very few players out there today selling truly green clay."

Surviving the steel slump

As evidenced by the collapse of British Steel earlier this year, these are tough times for steel, which continues to suffer from weak demand, oversupply from China and increasing competition. 

Seven’s customer, Luxembourg-based ArcelorMittal, recently announced a set of production cuts at its European sites. 

"It’s not easy to be in the steel industry in Europe today," Zobec says. "Of course, this has an impact on suppliers. But on the other hand, the global steel market has always been cyclical. Just look at the United States. 20 years ago, people were forecasting that it would halt its steel production completely, and now look at it."

According to the World Steel Association, US crude steel output in 2018 was up by 6.2% year on year.

In his role, Zobec admits having to navigate "headwinds, tailwinds and currents". 

"Some work in your favor, some don’t", he shrugs. "That means you need a clear vision of your goal, but also a bit of luck to get there faster."

*Conversion made August 2019