Founded in 2003, 100% Hungarian-owned sanitaryware merchant Wellis has grown from a small business into a market-leading manufacturer of spa products with more than 600 employees, in less than 15 years.
Wellis is owned by two brothers Zsolt Czafik CEO and Akos Czafik Managing Director, the sons of a bathroom store owner from Dabas, Hungary.
To go back to the humble beginnings, it’s all started with Zsolt who’s sense of commerce came at an early age: he spent 19 months as a backpacker in India, Nepal, Thailand - climbing mountains and wandering the jungle. Then in the late 1990s, he returned from Thailand with two suitcases filled with jeans. This is where the jeans-wholesaler business that established the Wellis empire started.
The brothers ran the Full Moon brand, distributed their trousers in Hungary and throughout Europe, in the order of hundreds of thousands.
The future CEO first met steam baths and hydromassage spas during his travels - the area itself was not unknown for him as his father being in the industry he knew the difference between a solid cast-iron bathtub and a bubble injecting version as a child. He immediately saw the business opportunity in the emerging market segment in Europe, bought four containers of these products, opened a shop in Budapest which turned out to be a good business decision.
However, there was no smooth path to success. Due to various quality issues from their beginnings in 2004, they established the assembly process in Hungary, which seemed safer. This enabled them to not only eliminate quality problems, but also to customise some products and give customers a degree of freedom to make the hot tubs bespoke which meant a great competitive advantage.
After a few years, they wanted to get to the next level, and started to prepare for manufacturing in Hungary, but in 2008 the global financial crisis hit and their newly built manufacturing plant was empty for two years.
Production only started in 2010 at the Dabas site and due to the downturn in the construction industry, the sanitaryware market in their portfolio had virtually stopped during the crisis, but outdoor spas were well on their way in Western Europe, pulling them out of the pit. They also had to make the right strategic decision: they let go of most of the bathroom business - the jeans were wound up at that time too - and put all their capital into the outdoor pools and hydro-massage business. As a result, the share of sanitaryware in sales has shrunk to a few percent, but it is now back, with ten percent of sales that are expected to continue to grow in the future, along with the foreseeable rise in housing construction.
The area of the Dabas site, formerly a cattle farm, was purchased by the Czafik brothers’ parents with the intention of breeding animals there which never happened. First, they used the site as a warehouse base, the first containers arrived there, and later they moved the central office there, leaving only the shop in Budapest.
They had serious difficulties in launching production, because no one in Hungary had ever made hot tubs before, there was no such technology, and even in Europe this activity was in its infancy, only small manufacturers existed. They did not find either the target machines or the specialists, the Italian manufacturer from whom they purchased the vacuum forming machine, told them the machine had not been previously used in hot tub manufacturing. They could have ordered special equipment from the US, but they wanted to get the right technology from Europe, so they had to figure it all out. For example, polyurethane technology, which strengthens the pelvis body and uses robots, has never been used in hot production before either. Since then, it has been copied by other manufacturers and successfully used in their own production.
Robot technology is also standard on Wellis: they use four robots in the manufacture of tubs, and now a fifth is also operating cutting holes in the spa.
A premium tub can have hundreds of holes and this robot does the job in an hour, which would give two people three hours of work.
The base- and side panels are manufactured in Hungary, similar to the body of the spas, and are made by vacuum forming; for the latter, the raw material - the acrylic sheet - is imported from the United States. The electronics comes from a Canadian company, and the nozzles and other parts come from the largest international suppliers to Dabas.
Today, 85 percent of the spas produced by the Czafik brothers are being exported, Wellis is Europe's number one spa manufacturer, but also among the top ten manufacturers worldwide. The company delivers to all European countries in multiple market segments, but is also present in the Middle East, India and since 2019 in North America: the US and Canada.
They initially made 300 tubs in 2010, in seven years they reached the annual volume of 10,000 and in the next few years the company is expected to manufacture 20,000 spas making it one of the world's top ten manufacturers and the largest in Europe.
Their goal is to become one of the world's top three manufacturers in three to five years. Of course, this growth can only be supported by further expansion of the organisation. Wellis sells premium products, while MyLine is a trademark for lower priced products. Wellis-made spas are available at premium dealers in the UK, Europe, US, the Middle-East and India.
Wellis products also feature a high degree of customization: customers are free to choose among other things the colour of the side panel and shell, the number of jets, and extras such as chromotherapy lighting, aromatherapy, various water sanitizer options, SmartPhone application, WIFI connection or built-in entertainment and sport facilities.
They are very strong in design. The brothers come up with design guidelines, shapes, lines, equipment, partly based on market feedback, but they also have a lot of ideas of their own. The brothers are the two owners of Wellis, and the division of labour between them is in the same way: Akos Czafik is responsible for the domestic and export trade and the marketing department, while the Zsolt has the areas of manufacturing, service, IT and finance.
The first 4,000 sq ft production hall was outgrown in four years, so they built a 10,000 sq ft that was handed over on January 1, 2016. In the meantime, they have even built a 5,000 square meter warehouse, so now a total of more than 35,000 square meters is built on site.
More than 300 people attended the inauguration of the new Wellis factory, they came from 15 countries in Europe, the US, the United Arab Emirates and Saudi Arabia.
The owners, still in their thirties, have a vision of becoming one of the world's top three manufacturers in three to five years, to offer the best products, and to grow as Europeans in the North-American market which is considered to be the homeland of the hot tub industry. A little-known fact is that American and European hot tubs differ in design; hence, one must be very good at catching the taste of Americans, and to properly target the demand for European design.
If they can see the right demand, then the next milestone could be setting up an overseas factory, either as a greenfield investment or by buying an existing manufacturer.
Their confidence is bolstered by their achievement of becoming the third largest player on the British market, which is similar in its tastes to that of the US.
Photo: Budapesti Értéktozsde Zrt.
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