Irizar: From Ormaiztegi to Five Continents

by Mikel Mujika. 

In the second half of the 19th century, a family with a woodworking business decided to evolve and dive into a new industrial activity:  passenger transportation. They stopped making harnesses for wagons and began to manufacture carriages and stagecoaches, which they began producing in a small town in the heart of Gipuzkoa, Ormaiztegi. This is how, in 1889, Irizar was established, a company converted today into a group of enterprises comprising more than 3,300 people worldwide. Most of the almost 5,000 high-end motor coaches it produces per year are destined for foreign markets. The focus now shifts to the American continent.

The company maintains production plants of coaches in six countries and has responded to the global crisis making record sales figures in 2012 (504 million euros). If that is not enough, Managing Director José Manuel Orcasitas expects an added 15% increase in sales for 2013. Its industrial expansion already extends from Ormaiztegi to Brazil, Mexico, Morocco, India and South Africa. Its shareholders, the owners, are the workers themselves: members of the Cooperative.

Irizar Factory in Ormaiztegi

All this makes Irizar the leading coach manufacturer within Spain, and a world-wide reference. Their vehicles ply the roads of 90 countries on five continents, transporting world famous soccer stars from clubs like Real Madrid and F.C. Barcelona, clubs committed to this Basque firm making Irizar their official bus. So how can it be that a company created in a small Basque town, as a result of the efforts of its workers, would achieve such international stature?

“Industrial and geographic diversification” are two of the keys to the success of Irizar, says its Managing Director José Manuel Orcasitas.  In its 124-year history, the main value of the company has been, according to its managers, its “strong capacity for adaptation and evolving to the needs of customers”, with a “strategy for reaching customer satisfaction and loyalty” and “constant innovation in new products, management systems and technology for its own label products”.

Research and development (R & D) has played a crucial role in this regard as it did in 1927, when horse-drawn carriages gave way to the manufacture of the first bus chassis which a customer bought in France. Today, the company’s production continues to evolve with the development of new projects that include the 100% electrically powered urban bus, with zero emissions, still in development phase.

As the company points out, in the long run “this is our great challenge in terms of sustainability and mobility, a product line that will position us at the forefront of technology in Europe and will allow the development of future products with proprietary technology”.

In this regard, the area of R & D was recently reinforced by the forming of Creatio, the new Center for Research and Development of Irizar, which “combines synergies and technological capacity coming from companies of industrial diversification (Hispacold, Masats, Jema and Datik) and supports the group in its new development of coaches”. Creatio will have expanded facilities in Ormaiztegi this coming September and projects the need to hire highly qualified personnel in the coming years.

Its high degree of internationalization, which has enabled the group to consolidate its position on full economic convulsion and compensate with foreign markets for the decline in orders within Spain, has not caused Irizar to lose its essence. The Basque firm maintains its cooperative nature and its headquarters remains in the town where it was founded, Ormaiztegi, with its mere 1,500 inhabitants. Of them, less than a thousand are of working age (between 16 and 65 years) and most are cooperative partners and work at the local plant, which employs around 720 people.

A Leap to the US Market

One of the most imminent goals of the company is to make the leap to the United States market. Irizar brand will do this in 2014 from its plant in Mexico and with its Irizar integrated bus. The integral coach is one of the best bets of the Basque firm in recent years. This qualitative leap means that spending will be dedicated primarily to becoming a builder of the vehicle as a whole, including both the chassis and the bodywork instead of manufacturing vehicles on chassis from other manufacturers, as has been done until now.

But the expansion to new markets continues. Mexico and Brazil, where the World Cup in 2014 and the 2016 Olympic Games will be held, are currently the main engines of the group, but Irizar is still setting new goals and although it does not project any new openings abroad in the short term, it has now begun looking into other “interesting” markets such as Turkey and Russia.