The Matić Uphosletry rounds-up the production process thanks to new foam cutting machines – the process is now fully performed by their workers. Photo: UNDP/H.Calkic

Established two decades ago as a family company, the Matić Upholstery today employs 74 workers in Gradiška. Their production is now round-up with two foam cutting machines that improve the company's competitiveness and allow for less time from order to delivery.

Dušan Matić, an upholsterer and the company director, explains that the new vertical and horizontal air saw cuts the exact amount of material needed for the production and thus helps the environment by not producing unnecessary waste. Matić explains that they were forced to buy large quantities of foam before, since suppliers sell bulks in standard sizes, regardless of customer needs.

"It's both easier and cheaper," says Matić, adding that new machines allow for a faster production and reduce waste since large foam blocks are now precisely cut to the desired size. Also, excess material no longer occupies precious space in the production hall.

The Matić Upholstery has co-financed the purchase of machines with 60% of funds, and the remainder was funded by the European Union through Local Integrated Development (LID) project, implemented by the United Nations Development Programme (UNDP).

Thanks to the LID project, five new workers were hired to work on the machines. Production expansion was also made possible. It is also 20-year-old Drago Milaković's first job.

"I'm cutting foam, undergoing training and I'm happy with the job," says Drago. We are told in the Matić Upholstery that the new machines have now made it possible to have even more competitive products.

Drago Milakovic, Photo: UNDP/H. Calkic

Working towards success from scratch and with the help of family

According to Dušan Matić, the early days were difficult. He started working in the 1980s as an upholsterer in the Furniture Factory Radnik, and at the same worked hard on making and covering furniture at home.

"I worked in the Radnik Company as an upholsterer – went there straight after my graduation. I then went to serve the army, and then back again to the Radnik Company. I was starting to do things here and there at home, from repairs to changing the chair covers," Matić recalls.

In late nineties, with several of his colleagues, he started with upholstery on his property in the Cerovljani village near Gradiška. The upholstery business grew over time, so there was room for new production halls on the property.

One of the milestones was four years ago, with the Gradiška Municipality selling construction land to the south of the city to private companies, in the Agroindustry Business zone in Nova Topola, at a price of one BAM per square meter. The Matić family took advantage of this opportunity and set up a new factory in the business area.

"You won't believe me but I get there every morning at 6:00 am. I am the last one to leave, I cannot even believe that this is really mine, but all with the help of my good people, my associates. Nobody turned their back on me, there was no backpedaling, people have only helped me," says Matić.

Dusan Matic, Photo: UNDP/ H. Calkic

From a home based business to exports aboard

"The production is expanding, new products are being introduced. We've been risking a lot, but it payed off eventually," he says, adding that he has achieved it all with the help of his wife Dragana, daughter Gordana and son Goran, all working in production. Dragana's sister Ljiljana Kojić is handling the company's administration.

"It is all there now, we are cutting timber, foam, covering furniture," explains Kojić and adds that finished products are exported to Bulgaria, Croatia, FYROM and Serbia. It is buyers who find them.

One of the customers is also the Australian-based Harvey Norman, selling products from the Matić Upholstery on the market in Slovenia. Demir Trivun, a representative of this company, believes that the Gradiška-based company is a trusted partner with quality, flexibility and easy communication as their advantage. Based on his cooperation with several companies in BiH, Trivun sees the lack of skilled labor as a challenge.

"I believe there is a gap in the labor market. Consequently, this could mean a price increase. If this comes true, then prices, currently on the verge of being acceptable, will no longer be competitive, and that would lead to a lesser interest for cooperation with BiH companies."

Lack of skilled workers is a concern for the Matić Upholstery, as is for many other companies from Gradiška. The Matić Upholstery today employs 74 workers, and plans to increase this number to one hundred in the following year. Upholsterers, carpenters, tailors and sewers are the most common in production. Finding skilled workers is a challenge for the company, so they train them themselves.

Gradiška Mayor Zoran Adžić says that the needs of the private sector for workforce are steadily growing. Municipal services record many unemployed, but the problem is in the mismatch in supply and demand for workers.

"In the coming period, it is necessary to go towards adjusting the education system to the needs of the economy, especially for profiles in certain sectors, such as metal processing, wood processing, textile, IT sector," says Adžić and adds that new courses are already being introduced in the secondary vocational school, and that students go for practical classes in production after they are done with school.

Employment is one of the priorities of the LID project, 6 million EUR worth EU investment. In the last two years, some 400 jobs in small and medium-sized enterprises were created as a part of the project. Under the EU's Local Development and Employment Programme, the LID supports the most promising industrial sectors in Bosnia and Herzegovina – agriculture, food, textile, metal and wood industry – and works on creating a better business environment through counseling and co-financing.

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