JOLYKA, Inc.

A Small Enterprise Assistance Funds (SEAF) Portfolio Company

Jorge and Lydia Vrsalovic
Cochabamba, Bolivia

JOLYKA brings alternative hardwood species from throughout Bolivia for the processing and production of very high-quality engineered flooring in its Cochabamba facility. The company uses only alternative wood species and does not offer any products manufactured from traditional or endangered species.

Jorge and Lydia Vrsalovic began JOLYKA in 1990 by importing and installing Bolivian wood flooring in Germany. Although demand in Germany was high, the Vrsalovics found that few suppliers in Bolivia could deliver the quanitity they needed, so in 1995, they moved to Bolivia and opened their own factory. By 2000, JOLYKA was proving that it had a high-quality product that was in great demand. But with more than $2 million in high-interest loans, and sales stalled at $850,000 per year, the future of the company looked bleak.

SEAF Bolivia looked at the company and realized they were able to get interesting contracts, but lacked the financial resources to carry out those contracts. In August 2000, SEAF and JOLYKA closed on a $400,000 equity investment as well as a convertible loan of $200,000, and a short-term loan of $60,000, providing the company with capital necessary to expand production and increase exports. In return for the $400,000 investment, SEAF gained a 35% share in the company. The convertible loan will be capitalized in increments of $50,000 if the company achieves certain milestons.

In addition to its investment, SEAF staff helped JOLYKA to restructure its debt over 10 years at a lower interest rate, helped the company secure a number of U.S. contracts and set up a U.S. distribution center modeled on the company's German distrubution center. SEAF's involvement has also enabled JOLYKA to attract financing from other sources, including a $400,000 loan from the Nature Conservancy, which will support the company's efforts to boost production.

Two years after SEAF's initial investment, JOLYKA's annual sales surpassed $3 million, with a climb to more than $4 million expected in 2003. Job growth has also been robust. At closing, JOLYKA had 65 employees. Today, in a country where unemployment can be upwards of 20 percent and many companies are closing their doors, JOLYKA has more than 130 employees, including machine operators, production supervisors, office workers and a range of manufacturing jobs.

SEAF Bolivia Profile