Heating Up

During Romania’s Christmas revolution in 1989, a group of specialty electricity engineers from the Research and Design Institute for Electrical Engineering Bucharest came together. Their mission? To create something they could call their own during a time of incredible change.

Rich in theoretical knowledge, they made up for what they lacked in business experience with enthusiasm. Initially, the team of 10 dedicated themselves to the repair and service of industrial equipment. Every new job was a chance to learn, a step closer to the day they would be manufacturing the equipment themselves.

It was from these beginnings that AAGES was born. Specialized in the design and manufacture of induction heating machines, it is now over three decades old and has supplied more than 1,200 types of medium-frequency converters (used in power grids) and 250 induction heating machines (to bond, harden or soften metals) to over 25 countries worldwide.

Speaking to The CEO Magazine, Founder and Managing Director Gábor Molnár says the vision was always to serve as large a market as possible. “The long-term purpose was to build a company that was able to manufacture products covering requirements worldwide,” he reveals.

He calls the first decade of business – the 90s – its “childhood”. “We learned by doing,” he says. The 2000s were the “second stage of our life”, he adds, as an alliance with a German company introduced the AAGES name to the European market.

As demand for its products flowed in from countries around the continent, the young business outgrew its location in the center of Târgu Mureș, a small city in Transylvania, and an investment was made in a greenfield development outside the city.

This site is now more than 4,400 square meters in size and includes the offices, laboratories and workshops for the 165 employees of the AAGES Group. This includes two smaller companies that have since been founded for vertical integration: Electroterm, which manufactures filtering chokes and inductors for induction heating applications and products, and AAGES HTC, an induction hardening workshop.

Equal Standing

Today, AAGES has established a firm reputation for quality. “Customers come to us because we try to demonstrate that our products made in Romania are equal to those made in Germany,” Molnár explains.

Each piece of equipment is custom made to an individual design. “It’s not like manufacturing a fridge or a TV set. Almost all our projects are bespoke, so we are very careful about listening to the needs of our customers.”

According to Molnár, the relationship continues past the commissioning stage. “After the sale, we remain close to our customers because they may have new ideas, so we stand by to support and solve them,” he says.

While the European markets already look to AAGES for its capacity “to think, to design, to develop and to produce”, Molnár sees opportunity for the company to grow on the global scale, particularly as heating by induction has a cleaner carbon footprint when compared to heating with coal or gas.

And with almost a quarter of the 120-strong team at AAGES being designers, he says that design development is an area of strategic importance. “Adaptability is very important right now,” he explains, adding that given the current energy crisis, several European companies have already approached it to replace their existing gas heating systems with induction heating.

People First

One of the most recent milestones was AAGES’ 2017 listing on the Bucharest Stock Exchange – a process Molnár compares to an exam.

“Many people asked at the time what the advantage to doing so was,” he recalls. “When a company is accepted to be listed on a stock exchange, it means that it is a stable, transparent and good company with a future. Otherwise, investors wouldn’t be interested in purchasing shares.”

Molnár appreciates that there’s a David versus Goliath feel to the AAGES story. “To be successful in this market for over three decades is a very big achievement, especially because we are competing against well-known businesses with thousands of employees and long histories,” he says.

“We’re like a small football team that has made it to the English Premier League.”

However, he also doesn’t miss a beat in pinpointing the source of its success. “From the beginning, we’ve made it clear that the main force of the company is the people,” he insists.

“The idea was to make the business feel like a family and that is why our employees stay, even if they could find a better salary at our competitors elsewhere in Europe.”

Good relations with external stakeholders have also played their part. Collaborations with universities and research institutes not only keep Molnár and his fellow AAGES co-founders (who are still active in the business) in touch with their technical roots, but also result in product innovations.

Meanwhile, the benefits of strong, long-term supplier relationships with the likes of Infineon, IFM, Rittal or Siemens are particularly visible in the context of the current supply chain climate.

Such is the trust that some of these suppliers even come to AAGES for feedback on their new products in development.

“We produce tons of equipment per year and they are all working in real workshops,” Molnár reveals. “So we’re able to give feedback about the quality of their products, or even more importantly, the possible improvements.”

Now more than ever, he appreciates the importance of cooperation. “With suppliers, with customers and internally,” he says. And even with the competition. “We like our competitors. Sometimes we learn from them.”

Having been with the AAGES since day one, Molnár has a clear outlook on its future.

“A company is good and stable when its people are good, stable and interested in doing their job,” he reflects. “This is what makes us confident that the company will be able to face any challenges going forward, just as we have done in our history.”