Jun 21, 2023

Interview of the CEO / MB President of "Alkaloid" AD Skopje, Zhivko Mukaetov, for "InStore" magazine


Over nearly 25 years, Zhivko Mukaetov has built his career with Alkaloid, assuming various positions until taking the company's helm almost two decades ago. Reflecting on the company's trajectory, he emphasizes: The company has grown and developed over nine decades, showcasing unwavering resilience and adaptability during specific periods and evolving systems. In an exclusive interview with InStore, Mukaetov expressed his ongoing commitment to the dignified and dedicated globalization of the company. A regional fusion has already been established to drive business development, consistently bolstered by investments amounting to €104.1 million within the past five years.

You can read about Alkaloid's operations and the country’s and region’s economic landscape, the regional initiatives, and more in the interview with the CEO and President of the Management Board, Zhivko Mukaetov.

How do you experience Alkaloid’s and your personal development path within the company since you have become CEO?

I started my journey at Alkaloid in September 1999, at the age of 25, at the basic levels of the company’s hierarchy. From there, through various managerial positions, in May 2006, I was appointed CEO and then President of the Management Board. By coming to the most responsible position in the large Alkaloid system, with firmly established corporate management principles, I tried to infuse new energy following the latest business trends. In 2006, Alkaloid’s sales were €57,7 million, and at the end of 2022, we had €231,9 million in consolidated sales. It was not easy to achieve a four-fold increase in circumstances when almost every year was marked by some omen of crisis. Historically, the company has grown and developed through unique times and systems during its 9-decade existence. However, it has always shown resilience and quickly adapted to changes. Perhaps the keywords for our successful development are dedication and hard work. Alkaloid is currently a company of over 2,700 families, and each member of the large Alkaloid family contributes to our success story continuing to grow and develop.

Alkaloid emerges as a desired business partner in the Macedonian market and abroad. What does it take for a company to become your partner?

Our roster of suppliers on the Macedonian market includes approximately 1.200 small and medium enterprises, with the list of collaborators and partners spanning over 1.500 entities in the country and the region. In all our endeavours, we prioritize unwavering commitment to consistently deliver exceptional quality, honesty, fulfilment of obligations, high business ethics, professional integrity, and credibility. These values form the foundation of any cooperative relationship we establish.

What share do exports take in Alkaloid's operations? Which of the markets in the Adriatic Region is the most profitable, and what is your most profitable market overall globally? What are your strongest selling products?

In the first quarter of 2023, 72% of our sales came from exports. Serbia stands out as our largest export market, while the countries of Southeast Europe contribute 29%, Eastern Europe accounts for 20%, and 22% of our products go to Western European markets.

By product category, pharmaceuticals lead with 90% of our sales, while chemicals, cosmetics, and botanicals contribute with 10%.

How does Macedonia compare to the other countries where Alkaloid operates? What are the main differences, and what can we learn/apply to our country?

Each market has its own specifics and should be treated individually. You must invest in local personnel, production portfolio, and marketing to compete in any foreign market. On the other hand, pharmaceutical products are a highly regulated category and entering foreign markets is extremely difficult. But we started globalizing the Alkaloid brand about two decades ago. Now, we are fully ready to adapt to the applicable legal and business norms and rules of operation in the highly developed markets in Europe, America, the Middle East and so on. However, we continue to focus our operations on Macedonia and the region.

How are you doing in the Macedonian market? What market share do Alkaloid brands take in specific categories? What are your plans for investing in new brands, and can we expect something new soon?

Unfortunately, the regulatory landscape in the Macedonian market falls short when it comes to pharmaceuticals, medical devices, and food supplements. To some extent, the same goes for children's cosmetics too. However, I am delighted that we are the leaders in both of these segments, and we distinguish ourselves with the superior quality compared to imported products.

Regarding investments in new brands, I would like to highlight MultiEssence as an umbrella brand for a range of OTC products. We are thrilled that one of our products under this brand, Magnesium 400 with B complex, leads the competition in its segment in Macedonia and across regional markets. 

How much is the knowledge that students acquire today applicable in operations? Are you also facing challenges with staff shortage, and if so, how do you address this issue?

After graduating from the Faculty of Mechanical Engineering in the spring of 1997, I continued my education in London, pursuing postgraduate studies in marketing management for two years, which proved instrumental in infusing a touch of creativity into my engineering mindset. Studying abroad was less prevalent a trend then than it is today, and our education system at the time used to produce highly skilled professionals. Regrettably, I cannot claim the same from the current perspective. Students at state universities currently increasingly lack training and motivation. We always strive to select the finest candidates in the labour market. The responsibility is immense, particularly when recruiting skilled candidates in an already evident shortage. To make a lasting change within our domain, we have introduced various programs for ongoing education, dual education, and internships. These initiatives have been successfully running for the past four years in collaboration with the state university St. Cyril and Methodius in Skopje. We have also established our own educational centre. Our Trajche Mukaetov Foundation actively promotes quality education and nurtures competent future professionals in the health and pharmaceutical field. Since its inception in May 2007, the Foundation has awarded scholarships to 619 pharmacy and medicine students at the state university. We have invested approximately 2 million euros through scholarships and one-time monetary awards. We consistently prioritize the ongoing professional development of our staff, primarily in pharmacy and pharmaceutical technology. The Faculty of Pharmacy in Belgrade is one of our esteemed and trusted partners in this endeavour.

We lack critical thinking and prioritization of interests, and there is an increasingly noticeable decline in our value system.

If our domestic economy could move beyond the margins, it would offer hope for much better performance.

You have made several investments, including the venture into Becutan wet wipes production. Could you elaborate on the link between investments, innovation, and brand development? What investments/innovations can we expect by the end of this year?

Over the past three decades, Alkaloid has invested in constructing and expanding manufacturing facilities, research and development centres, and implementing state-of-the-art equipment, laboratories, technologies, modern software, and highly skilled personnel. In the last five years alone, we have invested €104,1 million in the countries of the region, integrating our operations to optimize our business from our headquarters in Macedonia. While Alkaloid boasts a diverse portfolio of longstanding brands, we recognize that consumer habits and attitudes are dynamic and ever-changing. Therefore, we understand the importance of continuous investment, innovation, and following trends. In the pharmaceutical segment, our brand Proculin, introduced in 1967, has emerged as the leader in brand extensions. It has grown into a comprehensive eye care line in Macedonia and the region. Becutan has stood out as a highly recognized brand in cosmetics for nearly five decades. It has gained a strong foothold in the region and is present in nearly 30 countries worldwide. The recent investment of about four million euros in our wet wipes production facility now incorporates fully automated and robotic equipment designed and constructed following the latest norms of good manufacturing practice and European cosmetics regulations. We take pride that after 15 years of production outside of Macedonia, we have successfully transitioned to complete the entire process at our plant in Gjorce Petrov. This plant also manufactures wet wipes for other private-label brands of established market chains.

By the end of the year, we anticipate the completion of our „Tabletno 2“ megaproject, which aims to more than double the production of solid pharmaceutical forms while enhancing flexibility. We are committed to maintaining a trajectory of continuous investment as we work towards globalizing the Alkaloid brand with integrity and dedication.

Can fostering business connections and consolidating companies effectively address the challenges of the political situation and eliminate cross-border barriers? Will the Open Balkans initiative advance business opportunities?

I strongly support regional cooperation initiatives, such as the WB6CIF Chamber Investment Forum and Open Balkans, which aim to facilitate and promote trade, labour mobility, the efficient flow of services, and various synergies to enhance the region's competitiveness. At Alkaloid, we consider the region as the foundation upon which we build our global strategy. We have established a manufacturing facility in Belgrade, a chemical laboratory in Ljubljana, and a corporate legal team in Zagreb. Through our own initiatives, we have created a regional fusion that supports business development. We even forged forms of cooperation with our competitors in Croatia, Serbia, and Bosnia and Herzegovina.

I would like to reiterate a statement by the former Alkaloid CEO, Trajche Mukaetov: Macro-systems must be based on the operation and needs of micro-systems, which are the companies. Each company in the country contributes to the overall economy, and with all the uncertainties prevailing not only in our country but also in other markets within the region, companies face various risks and devote valuable time and resources to overcome these challenges. Our country has experienced significant turbulence in the past decades, and excessive politicization at all levels of society has hindered economic development. We lack critical thinking and prioritization of interests, and there is an increasingly noticeable decline in our value system. Successful examples are not promoted, while false idols are often undeservedly praised. Disillusioned by the lack of opportunities, many young people leave in search of better economic prospects elsewhere. However, if our domestic economy could move beyond the margins, it would offer hope for much better performance. In the face of political polarization, businesses should be the uniting force and should find more effective ways to promote regional economic integration, ensuring a higher level of competitiveness, a better standard of living, more foreign investments, and a brighter future for future generations.

What do you consider when selecting individuals for management positions, and what attributes should they have to implement agreed-upon decisions effectively?

Teamwork is undoubtedly the key to success! I am delighted to be surrounded by a team of highly skilled professionals who contribute significantly to the continuous development of Alkaloid's success story. My role in this process is to inspire and motivate them to achieve even greater heights. Each day presents new challenges, but to emerge victorious, we must communicate effectively and have a high level of empathy.

I prefer motivation rather than control, encouragement instead of punishment, and constructive discussions that inspire creativity. My utmost priority is to create a company where individuals feel satisfied and empowered to invest their full potential, leading us towards shared success.

We consider the region as the foundation upon which we build our global strategy. We have established a manufacturing facility in Belgrade, a chemical laboratory in Ljubljana, and a corporate legal team in Zagreb. 

As a leader, one often has to make difficult decisions that may not always be popular. What decision had a significant positive impact on your career? Are there any decisions you regret making?

If I were to highlight some of the critical strategic decisions, the following come to mind: the construction of facilities for cephalosporin antibiotics manufacturing, selecting the UK MHRA as a reference medicines agency, the company's digital transformation, doubling the number of offices beyond our Skopje headquarters, establishing the Research and Development Institute and the Quality Control Centre, opening a manufacturing plant in Serbia, and establishing the business development department, among many others. We have not made any radical decisions that we regret. However, there have been projects that required significant effort and resources, where it took multiple attempts and adjustments to our strategies to achieve success. There were also projects that I recognized as having potential and wanted to pursue, but due to various reasons, they had to be reprioritized. All these experiences have resulted in valuable lessons, and giving up must never be an option.