Celebrated Croatian entrepreneur Mate Rimac discusses Rimac Automobili’s new partnership with Hyundai and Kia Motors, how he plans to give a certain percentage of the company to its employees, revenue, the future, and more.
As Jutarnji list/Gordana Grgas writes on the 14th of May, 2019, after it was announced that the Hyundai and Kia Motors had decided to invest a massive 600 million kuna in capital into Rimac Automobili, Mate Rimac announced in an interview for Jutarnji list that he would give seven percent of the company to his employees, from the cleaners to the directors.
We’re bringing you the English translation of that interview here.
Why has Rimac Automobili entered into a partnership with Hyundai?
“We’ve been in contact with them for a couple of years and have been cooperating with them for a few years. They sent a strong delegation to us and, as soon as they saw the company, as soon as they saw what we were doing, they decided to invest immediately. In October last year they gave us an offer and we entered into negotiations. To have a partnership with such a company is very important for us. When looking at comparisons, they have a revenue of 250 billion euros, which is four times more than the Croatian GDP, and we’re also working directly with the administration. Euisun Chung, who was there upon signing the contract, is the executive vice president, the grandson of Hyundai’s founder, who’s now taking over the firm from his father.
We’re quick, small and innovative, we see and create the future and that’s very interesting to them, this is hugely important for us because, on the one hand, we’ve got the Volkswagen Group and Porsche, and then we’ve got Hyundai and Kia on the other, and we’ve been so busy with work with these companies that we don’t know where we’re going!
The best thing is that they’re not just buyers of our products but also shareholders, therefore it’s in their interest that the company succeeds. They will help us build faster in areas where we may have some weaknesses, for example in industrialisation, in the transition from small-scale to large serial production.
Today, we’re dealing with very complex systems for large car manufacturers, power systems, batteries, electronics, etc., we’ve achieved all that very quickly, but we need strategic partnerships. It’s very difficult, especially moving from small to large series. We need money to help the company achieve its goals. We invest a lot, we’re constantly expanding our plants, we employ more than 500 people, more than 300 engineers… We’re not like the others, we’re not wired money from the state but we get our money on the international market, and there’s nowhere better to find money than with a company that really understands what you’re doing, which is a partner and also a buyer,” stated Mate Rimac.
What’s the ownership structure of Rimac Automobili like now? You said you wouldn’t remain the majority owner…
“Now I have .. (looks at his phone) Just a second, I have all of that in a document…”
Do you not know what your share is now? Does that not matter to you?
”Well, that’s not important to me. People don’t really understand that. I’m killing myself with this job and I’d be the happiest man in the world if there was someone who could run the company better than me, so I could just do what I like doing, the technical part of things. Now I’m the executive and technical director, and now I hold 47.7 percent, the Chinese camel group holds 14 percent, Hyundai has 11 percent, Porsche has 10 percent, Kia has 2.7 percent, and the remaining shares belong to the investors from 2012 and 2013.”
Are the employees among the co-owners?
“No, but we’re working on that now, all of the employees will get a share, up until now, the ESOP was not worth it for them because of the tax. They’ll probably get seven percent, from the cleaners to the directors, but not everyone will get the same share.”
How much is Rimac Automobili worth now?
“More than 500 million euros.”
Why did not you not get to capital through an IPO, on the stock market?
”A lot of technology companies are now doing IPOs and they’re actually losing money, they still have no stable and profitable business. Let’s say Lyft, Uber or Snapchat… I don’t want that. I want to make an IPO when the company’s numbers are at that level. The company’s potential is huge, and we have now used a piece of it and it’s a shame to go out out onto the stock market with this company’s situation. In 3-4-5 years, it will be at a completely different level. Besides, we have good access to capital outside of the stock market, we’ve got that luxury.”
How much was Rimac Automobili’s income last year?
”I wouldn’t go into income, there are no final reports yet. That’s not our focus either, but a long-term trend. Here’s an example – the car that we’re developing for Hyundai now goes into serial production in 2023 only. Those are the cycles of our projects and to us, as well as to our shareholders, it’s really neither here nor there what the financial outcome will be for this year or for next year, we’re building a long-term story.”
Are you making a profit or are you still in the minus?
”We were still in the minus last year because we invested a lot. It’s important to note that this minus comes from shareholder money, and everyone agrees that it’s the company’s plan.”
What will you specifically use this 600 million kuna for?
”For many things. This is part of our C investment round, and we’ll still have investors in this round for another 70 million euros, but we don’t know who that will be for now, but they will probably be financial investors. One of the things we will invest in is building our campus, our development and research centre and our factory, and another company expansion, employing a lot of people and equipping the company. For the transition to serial production, it’s necessary to equip our production plants, test our products, develop them right up to the end, certify them… It’s a big thing.”
Where will the new campus be? And what will be there?
”We’re planning a campus for 2000 people because we want to have a longer-term solution. The headquarters of the company will also be there, as well as the development and research centre, production, testing, there’ll be a hotel for guests and employees coming from elsewhere, kindergartens for employees’ kids, restaurants, food production, hairdressers, sports facilities… I want it all to be integrated there.”
Where will this be located and when will you embark on construction?
”Near Zagreb. The location hasn’t yet been agreed, we’re look at a few of them, we’re negotiating. Construction should start early next year.”
I guess the campus will be a little special in the aesthetic sense.
”Nine international and several Croatian architectural studies are currently working on suggestions for conceptual solutions for the campus. Among them was Lord Foster (British architect Norman Foster), we had a meeting the other day. He worked on Apple’s campus and many other world-famous buildings. Everyone is so excited about this project and offering some great suggestions. They tell me that there’s no such thing anywhere else, the combination I want – the campus being open to the public, the care for the employees and the connection with nature.”
The serial production of your C-Two has been announced for next year. Where are you going to do this?
”We got a hall in Veliko Trgovišće (Krapina-Zagorje County). The C-Two prototypes are still being done in Sveta Nedelja, and when we finish them, we’ll move the manufacturing of the prototypes to Veliko Trgovišće. We already produce the batteries and the power systems there because we’re out of space here. We’re now there in five buildings and we were looking for something a bit closer to Sveta Nedelja, but there was just nothing there. Since there is no industry in Croatia, there’s not much out there to rent. So now we’re in Veliko Trgovišće, and we have centres in Split and in Osijek.”
Why did you open them there, so scattered apart?
”We grew so quickly over the last year. We now have fifteen engineers in Split, and about ten in Osijek, ane they’re now our competence centres – in Split, we do our own automotive software development tool operation, and we deal with our high voltage chargers in Osijek.”
The prime minister has never been in your facility?
”No, never. To make it clearer, I don’t ask for anything from the government. All I do is to urge the government to do the right thing to bring the car industry to Croatia. I have proved that it’s possible.”
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