Elko: Hotel Supply Deals & Record Sales in the Emirates

Czech Firm Elko Poised for Nearly $40 Million Turnover Boost Through Strategic Expansion and Acquisitions

A Moravian family-owned holding company, Elko, is on track to achieve a turnover of approximately 950 million Czech crowns (roughly $40 million USD) this year – a 12 percent increase year-on-year, representing an additional 126 million crowns in revenue. The company’s growth is fueled by a strategic push into European Union markets, bolstered by its expanding portfolio of smart home and hotel digitalization solutions.

From Relays to Revenue: A Three-Decade Trajectory

Elko’s remarkable journey began three decades ago, originating from a garage operation focused on the sale of electronic relays. Today, the company is leveraging its initial success to become a significant player in the broader technology sector. While the Czech construction market remains stagnant, according to company leadership, international expansion is proving to be a powerful engine for growth.

US Tariffs and Middle Eastern Momentum

A substantial portion of Elko’s recent success can be attributed to its North American branch, which has experienced a 100 percent increase in revenue, directly linked to the impact of tariffs implemented by the previous US administration. Simultaneously, the company is gaining traction in the Middle East, particularly in the United Arab Emirates. Elko has already equipped 16 luxury hotels in the Emirates with its smart technologies, which allow for centralized digital control of electrical appliances. Success is also being reported in the Balkan region.

Navigating the Smart Home Competition

The rise of smart home technology – connecting devices within a home or hotel into a single, controllable ecosystem – is a key area of focus for Elko. However, the company acknowledges intensifying competition from tech giants like Apple, Google, Samsung, and Amazon, all vying for dominance in the household digitization market.

Acquisition Strategy Drives European Growth

To overcome market access challenges, Elko has adopted an aggressive acquisition strategy. Last year, the company partnered with Turkish touch panel specialist Astrum Technology. More recently, in June, Elko completed its largest acquisition to date: the purchase of BJC, a traditional Spanish manufacturer of switches and sockets formerly owned by Siemens.

This acquisition of BJC has been particularly impactful, opening doors to Southern European markets previously inaccessible to the Czech brand. “I have to say that it turned out even better than I expected. In three months, we sold 300,000 euros worth of Elko products in Spain. We haven’t sold so much there in the last ten years,” a company representative stated. The Spanish subsidiary is primarily focused on exporting the electronic relays that initially propelled Elko’s growth.

The Power of Personal Relationships in Southern Europe

Elko’s leadership recognizes the importance of established relationships in Southern European business culture. “At the local exhibition, I saw how strong the relationships are with customers, who kiss, discuss, pat each other and deal with personal relationships more than the product,” one executive observed, highlighting the value of acquiring a local entity with pre-existing connections.

Eyes on Germany: Another Acquisition on the Horizon

The acquisition drive is far from over. Elko is currently in advanced discussions to acquire a German manufacturer of electrical appliances, a move that would provide access to key markets in Germany, Austria, Belgium, and the Netherlands. The strategy mirrors the success in Spain – leveraging a local entity to overcome barriers to entry. “We have had a branch in Germany for 15 years, but it is not at all easy to get to the wholesalers there. We believe that this is the path for us,” the owner indicated.

Production Remains in the Czech Republic

Despite opportunities for cost reduction, Elko has no plans to relocate its manufacturing operations. A company analysis determined that outsourcing production, even to Spain, would yield only a 10 percent cost saving, deemed insufficient to justify the disruption. Instead, the focus remains on automating existing Czech facilities to enhance competitiveness.

German Economic Headwinds Present Opportunities

While the German economy faces challenges – with plans for cheaper electricity for households and companies in 2026 – Elko’s leadership does not foresee a negative impact. The company utilizes its own energy sources for production and believes the German government’s initiatives are primarily aimed at supporting the automotive industry. In fact, the current economic climate in Germany is viewed as a potential catalyst for further acquisitions. “The situation in Germany is not good at all. When we went to Siemens there, there was no work at all on Friday and a little on Thursday, it was dead,” a senior official stated, suggesting a ripe environment for strategic investment.