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“We have overcome the obstacle of the small volume of the domestic market by increasing the export marketing of our products”

“State support is definitely indispensible and desirable for all businessmen, but companies should not regard it as the ultimate assistance on their way to success, and it should not be the only thing on which they rely.”

FOR GREAT BUSINESS-IDEAS THE MARKET KNOWS NO LIMITS

 
Zhivko Mukaetov, CEO of Alkaloid, and Mincho Jordanov, owner of Makstil, are the two Macedonian managers in the Board of Directors of Macedonia 2025 - an organizer of the Global Investment Summit that was held last week in Ohrid. Mukaetov says that his membership in the Board is an honour for him, as he is surrounded by Macedonians who have proved themselves professionally on a global level, but at the same time it is a responsibility that demands uncompromising dedication and commitment. He says that this additional duty in his professional portfolio has proved not to be marginal at all. 

As a member of the management boards of several institutions in Macedonia and abroad, and as a CEO of a company (for seven consecutive years) that has established its operations in 30 countries worldwide, I have a clear vision of the position of Macedonia in an international framework, and of its potentials. The moment I received the invitation and the conditions for access to Macedonia 2025, I could only draw one conclusion: that this organization has a really difficult and responsible task ahead of it. It will not be easy to fulfill the goals, we shall be faced with many challenges, but it is of utmost importance that we try to make, at least a small difference, towards a better positioning of our country on a global level.

Among the factors that discourage investing in Macedonia, Mr.Mike Zafirovski particularly pointed out the high unemployment rate, as well as the facts that we are not NATO and EU members, and that we are a small country. Are these factors hindrances or advantages for the domestic investors?

The integration of the Republic of Macedonia in the Euro-Atlantic structures is a question of a banal prerequisite that has been lingering on for quite a long time. In any case, waiting at their doorsteps is not a pleasant thing to do. However, we cannot just sit and wait, complaining that we have been cut off from the rest of the world, and do nothing about it. Speaking from my personal experience, Alkaloid has been present for years, not only on the regional markets, but also on the world markets, where market penetration is not easy. However, we ourselves have paved our way to success. The presence of Alkaloid on the Russian, American and EU markets, as well as the efforts to place our products on new markets are a real proof that with a good business idea, a high quality team and an agenda (which is, by no means, risk-proof), the discouraging factors are just a stone on the asphalt on the way to success. With the increased marketing of our products abroad, we have overcome the obstacle of the small volume of the domestic market. According to the latest consolidated auditing reports, in 2011 in Alkaloid there was a growth in sales of 14%, a growth in profit of 7% (compared to the year 2010) and there were 97 new employments. In 2000 we had nine offices abroad, while nowadays we have sixteen such offices. All of our sixteen subsidiaries and our 300 employees outside the headquarters seek to promote the export orientation of our company. I shall reiterate an empirical statement by the former CEO of Alkaloid, Trajche Mukaetov: “Macrosystems have to be built based on the operation and the needs of the microsystems, i.e. the companies”. It is a fact that each firm in our country makes a contribution to the overall economy. Each new direct foreign investment and each new export placement of a product lead to opening new vacancies.

The reality shows that success stories, the so-called ‘American dream’, take place only abroad. To what extent do small countries, such as Macedonia, offer conditions for success business stories?

The fact that we are a country with two million inhabitants is a facilitating factor in terms of a company’s visibility. This means that in such an small area, every single individual can hear about your product. Having these advantages, when a Macedonian company becomes a success story, there comes a time for parts of that story to be told abroad. When domestic business is stable, the urge to conquer foreign markets comes on its own. Alkaloid may be one of the examples of a successful export strategy, but there are also Seavus, Fx3x, Mikrosam etc. The conclusion of the Panel discussion I moderated (Globally competitive Macedonian products and services) was that Macedonia boasts a wide range of unexploited business potentials, high-quality products that would be highly competitive even on the foreign markets. An example of a business success story, an accomplishment of the American dream, was presented by Emil Hristov, who.went to the USA for the first time 11 years ago, as an exchange student, and now is a lifetime member of the New York Club of Executive Directors. In 2009 he established a company in the USA with two employees, and in 2012 EMSA Solar is one of the most successful business models in the world and a recognizable brand in the renewable energy industry in America. When Hristov established his company, he was not thinking about boundaries. After all, the USA is a market of 314 million inhabitants, but crucial for his success were his brilliant ideas, his good judgment, strong will, leadership potential and his persistence – qualities that a successful entrepreneur, by definition, should possess. The American market offers wonderful opportunities for sustainable development if you have a product of high-quality and added value, provided you select a smart strategy and real partners. During the Panel discussion, the following crucial prerequisites for export marketing by the Macedonian companies were identified: the high quality of the products and services, the management skills of the qualified staff, keeping pace with the latest trends and high standards. Let me make a reference to a statement by my colleague from the Board, John Bitove Jr. – multinational companies can not be built in a few years. The companies could analyze their opportunities through the trade associations (chambers of commerce) in the countries of investment interest, by attending and participating in events in a similar subject area, by making use of the channels of economic diplomacy, by presenting in innovative ways through the social media. This might seem complicated and time-consuming, but at the end of the day, the investment will definitely pay off, if you are certain that the product will meet the needs of the customers, to everyone’s great delight. If you have satisfied customers, it does not matter that the producer is from Macedonia.

At the Summit, Mr.Zafirovski stated that he did not spare his credibility to persuade the American KEMET to invest in our country. Is the word of a successful manager more worthy than an advertisement on CNN?

I am not in position to specify precisely the worth of these two channels for promotion, but Mr.Zafirovski is a reputable name in business on a global level, and his name definitely carries weight on the scales that weigh the results. Viral marketing is a comparably new category, based on the word-of-mouth technique. According to our latest survey about one of our latest products, consumers, first and foremost, trust their friends’ advice, and then the advice of an expert, while commercial promotion channels are ranked third or fourth. On the other hand, several foreign investors made it clear that it was the advertisements on CNN that inspired them to focus on Macedonia. This means that each channel has its ‘weight’, but the important thing is that this synergy yields results on the mutual account at the end of the day. Contacts are a rather valuable capital, and every other communication channel is an additional support.

The amount of profit is not directly proportional to successful management, since one could use intrigues in order to make profit. What is your perception of our businessmen, are they fighters for profit or business leaders?

 Actually, these are typical features of any heterogeneous market. The way to making profit is not an easy one, so the motto “the end justifies the means” can sometimes get another dimension and extra care needs to be taken on all levels of operation. The principles of modern and ethical corporate management were implemented in Alkaloid as early as the agreement for a convertible load was signed with the European Bank for Reconstruction and Development and the International Finance Corporation. These principles are deeply rooted in the operation of our company.

According to all predictions, the crisis will continue next year as well. How do you cope with it?In these last months of this exceptionally hard year from a business aspect, I have to say that the crisis has already generated more modest financial results and less ambitious investment predictions. The announcements that this situation is likely to carry on in the following year are ever more realistic. The crisis can be felt on all European markets. Liquidity has become harder to achieve everywhere, the risk of losing markets and business partners has been increased, just like the risk of prolonging the anticipated accomplishment of some of the ventures. However, we remain optimistic and, what is most important, we remain focused on our anticipated positive results and socially responsible activities. Taking into account the overall unfavorable business climate in Europe, our company is satisfied with its current results.

At the Summit, we have heard stories of businessmen who have risen from poverty to become globally successful managers. In our setting, the business stories say that you have to be close to the Government in order to get a deal. Do companies have a problem with being big independently of the Government, or is there a lack of great ideas?

 In practically all developing economies that do not generate sufficient growth, the state appears to be the biggest investor. The governing parties have different strategies about the stimulation of growth, about the areas where they are going to direct their support, and hence the connotation about the relationship between certain companies and the governing structures. What is truly real and measurable is the return from these investments, which is collected back in the state budget.This Government has a decent economic policy and in every sound economy there should be a synergy between the government and the economy. State support is definitely indispensible and desirable for all businessmen, but companies should not regard it as the ultimate assistance on their way to success, and it should not be the only thing on which they rely. Companies should pave their own way to success, and it is here that the great ideas come into play.