Article on sbc.si: Slovenian expertise recognized abroad

As members of the Club of Slovenian Entrepreneurs, they also present the events at Hrovat company on sbc.si. You are invited to read the article below.

A model Cubie Life house, measuring 41 m2, is currently under construction and will soon be placed in the heart of the Swiss Alps. It is the result of more than two years of development and intensive collaboration with a Swiss partner, who will market Hrovat’s technology, expertise, design, and experience on the local market. Before transport, the house will also be available for viewing in Slovenia.

Modular construction - the logical choice of modern times

In Switzerland, due to the fast pace of life and ever-increasing living costs, the advantages of modular construction are being recognized more and more. Not only because of the extremely short construction and assembly time, but also because this type of building saves people time, stress, and money – there is no need to search for and coordinate subcontractors, or make thousands of construction-related decisions that, as laypeople, they are unfamiliar with, since the investor receives a turnkey house. As a result, there are also no enormous unforeseen additional costs, which are a constant in conventional construction.

 Modules are manufactured in production facilities, with quality control points, which enables better execution and significantly fewer errors than in traditional construction, the cost of which is ultimately borne by the investor. The modules are delivered to the construction site already fully finished - with built-in electrical and plumbing installations, including the bathroom. The entire building can thus be ready to move into in just a few days, unlike traditional construction, where from the start of construction work on site to moving in takes from several months to even several years.

To your dream home in just a few clicks

The two business partners, with visionary perspectives, are breaking new ground already in the home purchasing process itself. Buyers can design their dream home online in a 3D configurator in just a few clicks. “They choose the roof shape, the exterior of the house, the interior design, the bathroom... They can choose from a wide range of additional equipment; from the type of heating, solar collectors, a terrace with a pergola, window shades, and can simultaneously view the visual appearance of the house - inside and out, and based on their selection they also immediately receive the final offer,” says director Jaka Hrovat.

Bringing people back to nature

Cubie houses are designed for people who want to spend more time in nature, away from the hustle and bustle of the city, but without compromising on comfort and quality of living. The materials used are natural, selected, and tested for the long lifespan of the house.

Looking ahead

The placement of the Cubie Life modular house in Switzerland is more than just a reference project - it is proof that Slovenian expertise can also be globally competitive when the right knowledge, passion, and vision are present. At Hrovat, they remain committed to their mission: to ensure quality living in harmony with nature through innovative products made from natural materials. They believe that modular construction will soon gain the place it deserves here as well - as the construction of the future that enables a better way of life.

If it's enough in an apartment block, why not in a house?

With a wooden frame and insulation that can be either stone wool or wood fiber, a modular house is technologically similar to a prefabricated house, with the difference that a modular house arrives at the site already built and is ready for move-in within three to four days. “With a masonry house, this cycle takes two to three years, and with a prefabricated house at least half a year,” says Hrovat.

He explains that from placing the order it takes three to four months to procure materials and about another month and a half for production, which in his view is also similar to a prefabricated house.

The company also offers houses with multiple modules, which can reach an area close to one hundred square meters, but Hrovat sees a lack of smaller houses on the housing market, as people looking for real estate today end up living either in an apartment block or in a 150-square-meter house.

“When you weigh the options, you realize that 50 to 60 square meters should be enough – if it's enough in an apartment block, it will be enough in a house too – and on top of that I also have a garden, a yard. That is the logic this came from,” Hrovat adds.

Today, people no longer build with their own hands

In his opinion, many people actually want to live in a house and close to nature, but they cannot afford it or “cannot get a loan because they are paying rent in an apartment block with two children and cannot get out of that situation”.

At the same time, he sees modular construction as a housing alternative at a time when young employees are overburdened with careers, which prevents them from building on their own, while masonry construction, due to the large number of subcontractors, can be chaotic and unmanageable for many investors.

“Our parents built with their hands. It was not a problem after work to gather the neighbors and lay the ‘bricks’ together. Today this is no longer done, because we are so burdened with our careers that you come home tired, and you are happy if you have two hours for your family. We are not going to build houses as well. But if we go down the route of the investor coordinating subcontractors themselves, chaos ensues: contractors are late, final bills are a third higher than the initial quotes, the previous contractor has always done something wrong, and so on. As an investor, you have to listen to all of this and swallow it,” he says.

Generational transition

The current director and co-owner joined the family business in 2012 as an entrepreneur who had already created his first company in the field of e-commerce while still in secondary school and sold it at the age of 21. From a young age, he was interested in marketing, while he did not see himself in production.

“I came into this industry as someone who honestly has no idea how to make any wooden product. But that was exactly the piece of the puzzle we were missing – there was knowledge in the house, people knew how to work with wood. I came with the intention of taking this to a higher level and creating a product that would go out into the world. Today, that is the Cubie house,” says Hrovat.

In 2018, he officially took over the management of the newly established company Hrovat.net d.o.o., while his father Marko closed his sole proprietorship, and in the new company he is a co-owner and advisor. “His voice is still very strong in the company, and my task is to make sure that is respected – not only by me, but also by the other employees,” says his son.

In this regard, the younger Hrovat says that when running the company, it is not easy to draw parallels between two generations, as they represent “two different views of the company.” In his opinion, ownership transfers often get stuck because a company cannot be run in a way where both generations follow their own approach. That only creates chaos and confusion.

He is also aware that the transfer is not an easy matter for the older generation. “I am grateful to my father, because entrusting a company that has been here for 50 years to your son is no joke – there are calluses, worries, stories here. Someone had to bring the company this far, and then trusting someone who is 25 years old is difficult.”

From craft to industrial production

In 2019, the company submitted an application for a digital transformation call, because according to Hrovat, their infrastructure was underdeveloped. Garden houses were often assembled under a canopy or in the yard because the workshop was too small.

They received a state subsidy of 100 thousand euros, with which they built a new hall and digitalized the warehouse. They upgraded work processes from craft-based to industrial production by establishing workstations. “Now the houses move through the work phases similarly to how cars are assembled,” Hrovat describes.

At the same time, they also began introducing culture into the company with mentor Tanja Skaza, whom Hrovat wrote to when she was starting to mentor family businesses. At that time, they established a vision, values, and mission, and systematically organized the team and assigned work roles.

“Establishing production processes in such an industry is not easy. A residential house has approximately six thousand component parts. Having all these components in stock, in the right place at the right time, requires a very complex system,” he adds.

Last year to two million in revenue

Digitalization and lean organization, after five years of transformation, led to the company with 18 employees generating more than two million euros in revenue for the first time ever last year, which was approximately 50 percent growth compared to the year before, although it had already come close to that level in the pandemic years 2020 and 2021. The year before last, revenue fell to 1.3 million euros, as they sold the Treecelet bracelets business, where proceeds from bracelet sales are used to plant trees.

Hrovat also expects revenue of around two million euros this year. He expects growth in the residential houses segment, which according to him accounts for a third of sales. At the same time, however, the garden houses business, or the entire garden program, with which the company generates two thirds of its revenue, has declined in Slovenia by 30 to 40 percent.

This year they also expect less exports than last year, when these accounted for approximately a third of revenue. Their revenue was boosted by a larger one-off deal abroad, where they worked as a subcontractor on mobile offices.

“In Slovenia, with garden houses, we have reached that upper point where the market physically no longer absorbs more than we can market. In this segment, around 150 garden houses are sold in Slovenia per year, the rest is covered by Bauhaus and garage craftsmen. But with residential houses I see great potential in Slovenia, as well as in Austria, Germany, and Switzerland, so we are working intensively on market development in Switzerland. I think this will be the breakthrough year when the house will physically stand there and we will also hold an open house day there,” says the director.

Into the Swiss market and the tiny house trend

For the past five years, the company has been exporting garden houses to Austria and Germany. Meanwhile, for residential houses they are counting primarily on the Swiss market, where they have found a strategic partner, secured a plot and a building permit, and prepared the foundations for setting up a house. At the end of August or the beginning of September, they will first present it in Slovenia with an open house day, and then ship it to Switzerland.

They will send a sample Cubie Life house there, which is currently in production and with which they are targeting the increasingly popular tiny house trend especially abroad. It is a turnkey modular house project measuring 41 square meters, which they have been developing over the past two years. The idea is to assemble a house for two people that will have everything necessary, but without personalization.

“So that we do not have to think about whether it is suitable for a young couple or a retired couple,” says Hrovat. “This little house is our answer to the question of how to make a quality house for two people who want to stay in touch with nature and live minimally.”