May 8, 2023
Interview of CEO/MB President of Alkaloid AD Skopje, Zhivko Mukaetov, for Al Jazeera Balkans
Zhivko Mukaetov has led the Skopje-based Alkaloid for almost two decades. Despite facing numerous challenges during the company's nearly 90-year history, Mukaetov maintains that investment has been a constant throughout that period. Today, Alkaloid has over 2000 employees, including 600 outside North Macedonia. The company's investments of over €104 million in the past five years have led to the Western Balkans Six Chamber Investment Forum declaring it the Lead Champion Investor in the Region. Mukaetov is also President of the Macedonian Handball Federation and a dedicated sports patron.
Thank you for welcoming us into your home and speaking with Al Jazeera, Mr Mukaetov. With Alkaloid approaching its 90th anniversary and having navigated changes in several social systems, it remains one of the most successful companies in the country and the region. Can you tell us how Alkaloid became a national and regional pharmaceutical giant?
Thank you for having me. It is a great pleasure to be a guest on Al Jazeera television. Alkaloid has been operating for 87 years and has weathered various social systems. I am proud to be a part of this company. Alkaloid's success is due primarily to the quality of its employees - over 2600 individuals who are part of our company, one big family. Additionally, the quality of our well-known products and brands - such as Caffetin, Becutan, Pancef, Good Nature, and many others - and the Alkaloid brand contribute to our continuous development. Quality has always been our top priority, and it is crucial for a company to continuously build a positive image for itself and its products. Over the years, Alkaloid has shown resilience and adaptability to new situations where it operates.
Is that the secret to Alkaloid's longevity compared to other companies in the Balkans and former Yugoslavia that were once successful and famous but no longer exist?
The secret to our longevity is something we understand well. It is a combination of dedication, teamwork, love for the company, and loyalty. Additionally, we continuously invest in educating our employees, who have grown alongside the company. It is a mutual relationship, with management taking care of employees and employees contributing to the company's proper development.
You, personally, also have an interesting history with the company. Please briefly describe your personal development during your time at Alkaloid.
My personal journey at Alkaloid began after completing my studies in mechanical engineering at Skopje's Faculty and returning from postgraduate studies in marketing in London. I started working as part of the team in the advertising department in September 1999. Then I joined the broader marketing activities, I moved into the marketing and sales section of the pharmaceuticals department, which is the largest and most crucial segment of the company's operations. I then became in charge of the pharmaceuticals profit centre. By 2005, I was already involved in managing the company overall and was appointed CEO in 2006. In 2007, after my father, Trajche Mukaetov, passed away, who had been at the company's helm since 1985, I also became President of the Management Board.
Interesting data was recently published about Alkaloid for the past year, revealing record exports of over €157 million. Standing out among these statistics, was the doubling of sales in Poland, the almost 80% increase in Romania, and even sales growth in the USA. What was the reason for these results specifically for last year?
I want to point out that we're particularly proud that Alkaloid has been growing year over year since 2005. The company has grown about four and a half times in the last 17 years. Primarily it is due to building a portfolio of products that have added value, are differentiated from the competition, and are of high quality and competitive in their markets. To achieve this, it all comes down to the quality of our staff, who can compete with any other company anywhere in the world.
Is there any secret for Poland, specifically?
For Poland specifically, the key is that it's one of the fastest-growing markets that readily accepts our products. We have built a portfolio that can meet the challenges of that market. I believe that Poland and Romania are currently the most promising and rapidly expanding pharmaceutical markets in Europe.
How are you perceived in the US? Maybe they don't know that your company comes from a small Balkans country. How are the company and your products perceived there?
In the United States, they see us as a European manufacturer from a European country. It is interesting that trust can be established more easily in the US than in the European Union. This is because what matters there is product quality and uniqueness. We have found success in the American market with our organic and gluten-free teas, which makes us unique and stand out from competition. It is a fact that the US sees us as a European manufacturer which works in our favour. Our long-term partners have built trust in our company, and I am pleased with our progress in the US market. However, we are not stopping there. Our goal is to establish a presence in the pharmaceutical sector in the United States, which we have yet to achieve. Nevertheless, I am confident that our company's capacity, talented workforce, and forthcoming product portfolio will enable us to succeed in this endeavour.
The past few years have shaken the world. First, it was the COVID-19 pandemic, and now the war in Ukraine. How did all this affect Alkaloid’s operation?
Alkaloid has again shown its ability to adapt quickly to such situations. Our management team was very operational, especially at the beginning of the COVID-19 crisis. We had to find alternative raw material supply channels quickly as some European countries had prohibited their producers from selling to us. We needed to produce disinfectants and other products that were in high demand at the time. We managed to mobilized quickly and even adapt some of the machines we used to manufacture perfumes and creams to produce more disinfectants. We rose to the challenge and provided our population with the much-needed products.
Are disinfectant sales still high? May people be forgetting about basic hygiene habits as the pandemic nears its end?
I think people are forgetting. Sales have returned to slightly above pre-COVID levels, so disinfectants are once again a smaller segment of what Alkaloid is doing. However, we remain prepared to respond to any potential needs in the future. Alkaloid has always been a partner of the population in Macedonia and the region, and we will continue to position ourselves to provide products to those in need, regardless of which portfolio products come from.
Mr Mukaetov, the Western Balkans Six Chamber Investment Forum recently declared you the Lead Champion Investor in the Region for investing more than €104 million. What resources does the region have that you utilize in your work?
Receiving such an award is a great honour for us. I believe it is well-deserved, considering the serious investment cycle that our company has started in many segments of our operation, including manufacturing facilities, new technologies, research and development, and warehouse space. I think this award should serve as an incentive for other companies to invest continuously. As for the region itself, I view it as a domestic market. We share similar cultures and are very close to the people in the region. However, there is still significant potential for building synergies within the region. For instance, we have competing companies that are our partners in specific projects in Croatia, Bosnia and Herzegovina, and Serbia. Moreover, we see the region as an opportunity for further development of our company. For instance, we have invested in the manufacturing of pharmaceutical products in Serbia and a chemical laboratory in Ljubljana. Our Legal Corporate Affairs Service is stationed in Zagreb, demonstrating our willingness to utilize the region's potential.
How important is regional connectivity, not just for Alkaloid, but for other companies in the Western Balkans as well?
I believe that regional connectivity is of utmost importance. Expanding from the domestic market to the regional market and then to further global markets is a natural progression. Speaking from our own experience, around 15 years ago, we made most of our sales in domestic and regional markets. Today, we have expanded to over 50 markets worldwide. However, before we could achieve this, we had to do our homework and establish ourselves in this region where competition is fierce. If you are not competitive in the region, expecting to succeed in Western Europe becomes even more difficult. Therefore, the Western Balkans region is an excellent testing ground for companies to evolve and become global.
In light of the current energy and economic crisis, what advice do you have for business people in the Balkans region? What do you believe should be their top priorities, and what is crucial for the success of businesses in the region?
Firstly, I think we should be rational and exchange the knowledge we have accumulated in our respective companies. We should look for forms of synergy and collaboration, enabling us to be more competitive and of higher quality. Secondly, I believe that businesses should be more vocal about the value they create through these collaborations. Unfortunately, in the region, politics tends to overshadow the achievements of businesses, and we fail to communicate the joint added value that we create. We should learn from Slovenia, a country that came out of ex-Yugoslavia, where the balance of power is different, and the business community has a more decisive influence on the country's development. As a result, Slovenia is moving forward at a pace the rest of the region can't catch up with.
In recent years, Macedonian society has experienced much turbulence. As someone who has been managing Alkaloid for many years, what advice would you give to the leaders of this country on how to move forward?
I believe that what I said about the region is even more relevant in the case of Macedonia. Unfortunately, our society has been heavily politicized and divided into camps. Over the past thirty years, our politics has failed to demonstrate the capacity to develop a modern and competitive state in various fields. Politics dominates our society in all spheres of society and has hindered the normal development of the state. Our educational system is objectively weaker than during the transition from the old to the new state, and our health system is not functioning properly. Regarding personnel policy, the administration focuses strictly on quantity, not quality, and we get stuck in bureaucratic partisan labyrinths that ultimately hinder our progress as a business community. Rather than having a supportive environment for developing people and companies and expanding globally, we spend much time dealing with obstacles arising from how the state functions on a daily basis.
The mass exodus of young people is another huge problem. How does this brain drain affect you as a company, and what needs to happen to stop this trend?
Frankly, if we had discussed this topic ten years ago, I would have said that Alkaloid's main challenge was sales. However, now I can confidently say that our biggest challenge is retaining and motivating high-quality people. We must do everything we can to ensure that our vision for the growth of Alkaloid as a company is executed by competent staff. We have initiated several projects, such as dual education with the secondary medical school and the internship program with the faculties, where over 100 university students are trained by our mentors and have the opportunity to work with us after graduation. We conduct annual employee satisfaction surveys and introduce various incentive programs, recognizing that young people are interested in more than just salaries. Factors such as quality of life, air quality, and the content they experience beyond the workplace all play a role. We must recognize that it is not only about what Alkaloid offers to its employees but the entire package.
The foundation named after your father, Trajche Mukaetov, has already provided scholarships to over 600 students in the fields of medicine and pharmacy. Do these scholarships have any specific effects?
The scholarships we provide have a significant impact because they enable young people to sustain themselves in Skopje, which is a more expensive city compared to smaller places in Macedonia. Many of these young people, especially in the field of pharmacy, receive offers from us to continue working in our company after completing their studies. We have a substantial number of employees who come from the Trajche Mukaetov Foundation, which I believe has been managed correctly from the beginning. It makes me happy that we have the opportunity to assist these young people in furthering their education.
Alkaloid has also supported Macedonian sports for a long time, especially handball and chess. Where do you see the future of Macedonian sport?
Sport is a remarkable phenomenon that has the power to instil good values, discipline, dedication, and the drive to go above and beyond oneself in young people. As a company and an individual, I am proud to be actively involved in sports. However, for sports to thrive, funds, infrastructure, organization, and the inclusion of all essential factors are crucial. Unfortunately, in our country, the importance of sports is underestimated, and it is pushed to the margins, which is not the case in other parts of the region. We all need to get more involved, and the state needs to create a system that encourages investment in sports and mobilizes young children to participate. Ultimately, it will positively impact the country in all aspects.
I would ask you specifically about handball. Do you believe that a generational shift is currently underway in the handball scene? Do you anticipate that the new generation entering handball will achieve the same level of success as the previous generation that is now gradually retiring?
If I didn't believe in it, I wouldn't even get engaged with it. I am absolutely convinced that if we provide them with the proper support and organization, there will be healthy material, and many young, quality handball players will come up. If they are provided with the right conditions for development and given a chance, they will absolutely shine. In the long run, I believe that Macedonian handball will continue to be the number one sport and bring results from European and world championships, giving us someone to cheer for.
Looking ahead, how do you see the development of artificial intelligence shaping the future of pharmacy?
Artificial intelligence can take different forms. However, I believe humans should always have the primary role, no matter how advanced AI becomes. The challenges we have recently faced have highlighted the importance of having quality personnel with good values, dedication, and passion for their work. So, AI is a reality, personalized pharmaceuticals and other forms of AI will play a significant role in the future, but people will remain essential to everything.
Do you expect that there will be discoveries of medicines for illnesses that are currently incurable?
I am hopeful and pray to God for that. All of us have lost loved ones in our families due to incurable illnesses. I hope that multinational companies, with time, will be successful in developing drugs that can prolong people's average life. As a pharmaceutical industry, we are committed to contributing to this goal by creating new medication forms that can enhance individuals' quality of life.
Mr Mukaetov, how do you spend your free time, and what brings you fulfilment in your personal life? Do you make time for leisure activities, reading, or sports?
My family fulfils me the most. I am very happy to have an extended family, with my wife and children. I feel thrilled when we engage in activities and spend time together, going somewhere on weekends. Apart from that, I like to find time for running as it relaxes me. Additionally, I follow handball matches as it is something that energizes me.
Mr Mukaetov, thank you for your time for Al Jazeera.
Thank you for having me. I wish you, your team, and the people in the region all the best. Above all, I hope for good health and happiness. I believe that the region will improve in all aspects of functioning over time.