Four decades after its establishment, Karatzis Group is now a global leader in the sector of packaging nets, at the same time having made substantial productive investments in the field of Energy and Tourism.
BY DIMITRIS PAFILAS
Crete, 1954. The country suffers from the bitter immigration of the Greeks. Beyond immigrants, all families have members that must study, while, back in Greece, the family is living in poverty. At the age of 20, Miltiadis Karatzis, the son of a stockbreeder from Melidochori of Heraklion, comes to Austria to study. However, the financial struggles in Greece do not allow him to continue studying. His family is more than big: he has 13 siblings, 11 boys and 2 females, as they say in Crete. Inevitably, his studies are terminated. Poverty does not discourage him. He becomes a worker in an Austrian packaging company and, soon, he becomes one of its most successful salesmen. The company manufactures, among others, the first clips for salami packaging. One day, he goes to his boss and suggests that he participate in the new company. The old Austrian refuses, due to age, but allows him to start the company, under the term that he does not leave Austria. The innovation in the product is successful and the company is sold in 1960, against the huge amount, for that time, of 3 million DEM. With this money in his hands, he returns to Crete in the ‘70s, and having experience from abroad, he starts a net business, which has now literally expanded all over the world. A few years later, he buys the land in Melidochori where the first production unit of Karatzis S.A. was built, for the production of packaging nets for meat and poultry. The father of the current shareholders was not alone in this effort. His wife and family stood by him. It was the traditional structure of most Greek enterprises, where the whole family works hard. That first unit gradually evolved. After about ten years, in 1982, the family buys the plot in Hersonissos, where “Nana Beach” Hotel is located today. Father Karatzis is insightful; he sees the turn to tourism and carefully invests. For three years, the family carries out research in tourism and, finally, breaks ground. The hotel opens in 1985, originally with 150 beds. “Nana Beach” is the first hotel in Greece to apply the All Inclusive system, where tourists wear the well-‐known plastic wristbands and enjoy all tourist services inside the facilities. The application of the system, as well as the reasonable management of the hotel, in cooperation with foreign agencies, has made the current hotel one of the biggest hotels in Crete. Today, it is a five-‐star hotel, with 500 rooms, and achieves more than 200,000 stays a year. One year later, the company acquires a secondunit for the manufacturing of nets, in order to cover the packaging needs of the food market.
From the Fire to Buyouts-‐Profits from the USA
The family experiences its most difficult time in 1994, when fire breaks out in the factory in Melidochori. Not all facilities were insured, and the damage is huge for the enterprise. Despite the unfortunate event, the family stands on their feet again. While investors are dazzled by the Stock Market rise, Karatzis S.A. buys out competitors. It massively buys their equipment and places it in a factory in Larissa, thus achieving scale economies. In 2000, the company lists its stocks in the Stock Market and, with the capitals it derives, it expands in the sectors of nets and tourism. In hindsight, it is now obvious that the management of the Cretan company did not use the capitals for personal wealth, but for investments, buyouts of foreign companies, research and development. In the same year, it buys out the German Company Mesh Pack, which produces a wide range of packaging net products. At the same time, Karatzis buys new land in Larissa and Germany, and creates warehouses that enhance it, as they cover the market needs in Central Europe. It is interesting that, while mature markets have now reached their limits, Karatzis counterbalances the losses from the rapid growth markets of Eastern Europe (Poland, Czech Republic, Hungary). In the following years, the company made buyouts abroad. Karatzis started cooperating with the American Fabpro, while it established Karatzis USALLC, which was sold with significant profit. Later on, a Spanish company was also acquired, while the energy portfolio was also extended with 240 MW power collectors.
Proposals for Buyout
Karatzis siblings, Antonis and Marita, have a low profile and their only hobby is their work. Without any “fuss”, they re-‐invest the money they make in the company. The ultimate aim of the family is to employ more people in their business. It gives them joy and, at the same time, responsibility. As the siblings say, they try to make no mistakes in the management of the companies. The responsibility they feel for the employees returns profits to the company, and makes them particularly popular, since the personnel feels very grateful to them, as people close to them say. In contrast to other businessmen, Mr Karatzis, 36 years old, is not concerned about his share. He hasn’t looked at it for two years. However, the recognition comes from the market itself. Karatzis has low indebtedness, while, all through its operation, it has only received low subsidy for its investments. “We do not ask for any support. What we want is… disincentives and the absence of obstacles. The tax regime, for example, is like an elevator,”he notes referring to the tax adopted by the Ministry of Finance for photovoltaics.
New Investment and Awards in Tourism
The hotel has been recently awarded by the German travel agency network, RTK, and was designated among the 100 top hotels it cooperates with, based on the quality of services they provide. However, the investments in tourism do not end here, as the company owns an area of land of 15 acres in Ierapetra, where it plans to construct a luxurious resort with 700 beds, and a bungalow compound next to the sea, with the purpose of offering high-‐quality services to guests.
Karatzis Group Today
Four decades after the first factory, Karatzis Group is now a global leader in the packaging net sector, at the same time having made substantial productive investments in the field of energy and tourism. With a turnover of 62.7 million euro in 2011, operating profits of 12.3 million euro and net profits of 5.6 million euro, Karatzis remains a healthy Greek company that operates even under the adverse circumstances. The personnel have exceeded 600 employees, and the annual production capacity reached 20,000 tonnes annually. The product portfolio includes from hay and palletizing nets to nets for Christmas trees, road construction nets and meat packaging nets.
Excellence in Numerous Products
Karatzis Group holds the 1st place in the world in the production of bags on rolls for automatic packaging of fresh products.
2nd supplier of hay nets internationally
1st in the world in the production of elastic meat packaging nets.
1st in Europe in shade nets for the control of the microclimate in gardens, greenhouses and nurseries.
1st in the production of nets for Christmas trees.
The 1st in the world to develop shade nets that allow the control of the climate, lighting and airflow in gardens and greenhouses.
The 1st to produce road construction nets with retro reflective tapes, visible in the dark.
[ Photo: THE FACILITIES of Karatzis Group, in the unitof Heraklion ]