Read more
This summer, the first batches for customers were made and the production capacity has been gradually increased to meet growing demand. “Our current capacity is over 2,000 aluminium frames per month in batches of 300 to 500 units. This matches the MOQ of our raw material vendors and justifies our efforts. Finally we expect to reach 6,500 frames per month by the end of 2021 or 100,000 per year. By the end of 2022 we have planned to reach an annual production of 200,000 units as indicated in our initial business plan,” explains Cycle Gets CEO Operations, Anton Nestev.
To start the frame building project, equity fund Empower Capital invested €3.3 million in the newly founded company Cycle Gets. Empower Capital is a €21 million fund financed by the European Investment Fund as part of the ‘Joint European Resources for Micro to Medium Enterprises’ initiative in Bulgaria. This fund has the mandate to provide access to equity funding to new and expanding Bulgarian companies. An additional bank loan of €600,000 provides the Cycle Gets’ working capital. Cycle Gets is located only 5 kilometres from Sofia and is managed by former RAM Bikes manager and now Cycle Gets CEO Operations, Anton Nestev, CEO Finance Borislav Hristov, Supply Chain Manager Alexander Davidkov and CFO Preslav Georgiev.
“Though these volumes might not cover the total needs of the European industry, we offer our customers the huge advantage of speeding up their supply chain,” said Parushev. “We will be able to deliver within one month. We are aiming for small series production of 100 to 500 units. For this category the long lead-times that come with shipping from Asia as well as the difficulties with quality control is the biggest problem in the industry. Our production costs will be similar to Asian suppliers. Both the costs of the machinery and labour are at the same price levels as in Taiwan.”
To prepare for this new project, CEO Operations Anton Nestev, a MSc graduate of the Eindhoven University of Technology in the Netherlands and his team toured Chinese and Taiwanese factories. “The production equipment for our plant has already been delivered, installed and tested early 2020. It includes machinery for forming aluminium profiles, cutting metal parts, high temperature furnace and metal cooling baths, manual welding stations but also robots for precise and quick welding.”
The investors have planned to develop the production gradually. “We started with simple and cheaper frameworks, including proprietary models, so that the technology can be mastered over time and we can prove our name as a reliable supplier of quality products. We prefer to be cautious in our approach. In 2021, we want to reach half of our capacity, and by 2022 we have set a target of 200,000 frames,” said Slavcho Parushev of Empower Capital.
Cycle Gets product range contains three models; a MTB e-bike hardtail frame, a recreational MTB hardtail frame and an Enduro full suspension frame. All these models are ‘open mold’ which means they are ready for modification on one or more tubes to ensure unique design for Cycle Gets’ customers.
In the long term, Cycle Gets is not only aiming at the supply of alloy frames, but also partnering with OEMs in engineering new designs. The local Bulgarian brand www.econicone.com was one of the first customers and is now continuing with their future bestsellers made by Cycle Gets. The frame maker is also in discussion with potential new customers in Spain, Germany and UK.
The main markets for Cycle Get are Bulgaria, Germany and the Benelux. Bulgaria is particularly interesting for the frame maker as a growing number of European brands have their bikes assembled there. According to Slavcho Parushev it is no problem to find skilled workers in Bulgaria. “The working conditions are way better then welders are used to in the open air. People are also very much interested in our company because they can count on indoor training.”
