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March 2017

Executive Study Tour in Toronto: Visit to CSA Group, Deloitte and Conundrum Capital

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On June 30, the Study Tour participants visited CSA Group– the largest not for profit organization in Canada that provides certificates to companies in a range of industries, including nano-technology, sustainable infrastructure, smart technologies, mining, construction, appliances, alternative energy and sustainability. CSA Group has 1800 employees, 20 laboratories and 37 offices in 14 countries. The most insightful part of this experience for the Macedonian participants was that relevant certificates enhance business because the global marketplace, individual countries and international trade frameworks require that products meet increasingly higher standards. The organization prides itself on the development of energy friendly-programs and introduction of higher standards to stimulate the innovation and production of new products. The CSA mark appears on more than a billion products worldwide and they have more than 1800 employees, half of which are outside Canada. The group had the distinct pleasure to also meet the Chairman of the organization Dr. Roland Hosein who has shared his vision about the organization and accentuated the fact the not for profit organizations have an extremely important role to act where businesses and state institutions cannot. The Macedonian delegation also had a tour around the premises where some of the most sophisticated equipment in the world is tested.

The group then visited Conundrum Capital, a private equity company in Toronto which invests primarily in solid-structure real estate, but has also made ventures into renewable energy and reducing energy consumption. Our hosts shared some of the principles that had brought them success. Conundrum is always looking to hire the best people that give their time to the company, and pays them well for it. “You can’t be successful by going home at 17:00,” they said. The reason why their offices are located Downtown is to give their employees an opportunity to have an easily accessible job that pays well, so they can put in the extra hour whenever necessary.  As a farewell, our hosts named the three things you never talk to an investor, and those things are: politics, politics, and politics.  

At Deloitte, one of the largest consultancy firms in the world. It employs more than 170,000 people 140 countries around the world and has revenues of 20 billion dollars per year.  The study tour group had a chance to meet Mr. Tom Strezos who introduced them to the aspects of consultancy the company does, as well as some insights about how emerging economies need to do business and attract investors. Mr. Strezos also heard the investment opportunities in Macedonia and some of the new things that had been underway in the country in the past several years. The participants had a chance to present their companies and their plans for the future. Mr. Strezos offered the services of Deloitte to any Macedonian company that is looking to do business in or with Canada.

 

Svemek founded by a diaspora investor, succeeds as an exporter while dealing with challenges at home

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Lazar Gacov founded the company Svemek in Sweden, based on his working experience in the machining industry. After relocating the company in Macedonia in 1997, Svemek became a family-owned and run company. Macedonia2025 had the pleasure of hearing the story about a successful business that moved to Macedonia to face difficult challenges which did not deter it from delivering products to leading European international companies. We talked to the founder Lazar and his daughter Kristina, who leads the company’s relations with the clients.

Tell us about the origins of Svemek

I have worked as a toolmaker. I know how to produce various tools and I started from the very basics of the trade. During my entire career I didn’t stop learning and perfecting my skills. The knowledge that I earned in Sweden I transferred to the people working in the company in Macedonia.

What products does Svemek specialize in?

Svemek doesn’t have its own products but manufactures according to blueprints sent by our clients. We usually receive blueprints for cylinders, but we aren’t fixated only on that. We also make component parts for cylinders which are used on doors of buses and trains. The hydraulic parts that we make are used in various industrial machines, construction vehicles, machining cylinders and so on. The machines that we have in the factory are the same or similar to those used by companies in the West and we do our best to keep the standard to the highest level.

Do you mostly export or are you focused on domestic buyers?

Svemek has cooperation with foreign companies, which source 90 percent of our production. Unfortunately, foreign companies think that we should have prices as in Chine just because we are in the Balkans, and this can create difficulties when a company has disproportional expectations. In any case, the products that we make are in the end more affordable than those made anywhere in the west, in the end enabling the clients to work with us.

Do you have any inventions that are your own?

At the moment we are making an attempt to make propellers for hydro turbines. We succeeded in producing the first prototype which looks like it is going to work. We have a working fit of the shape and we are now experimenting with materials. The company owns a software which thanks to our programmer (Lazar’s son and colleague) creates various modules with the purpose of optimizing the work of the turbines. Next thing to do is simply hope that there will be an expansion here in the use of hydro turbines for the production of electricity.

What caused you to move to Macedonia after 32 years spent in Sweden?

We made that decision because of our children. The pace of living in Sweden was very intensive and we couldn’t find enough time to dedicate to each other. In those years there were places in Sweden that were unfit for raising children. We moved to Macedonia before 1997. In the meantime I bought machines and halls to develop the production facility. I purchased an additional storage hall which was illegally sold to a third person.

How were your beginnings and has anything changed in the conditions for doing business?

In 1997 it was very difficult. Just to import materials we had to obtain special forms and pay various fees. The customs tax back then was 26 or 27 percent which had to be paid, but the government didn’t return the taxes. Oftentimes, entire series of products were stuck in our storage halls because of unknown bureaucratic reasons. However, with the course of time the conditions for doing business started to improve, although there are still challenges, such as the high price we are paying for electricity.

In which direction do you plan to take your company in the time ahead?

Our focus remains on finding new foreign clients. We make efforts to maintain high standards and show people that the company fulfills the expectations for quality and professionality. We have cooperated with globally famous companies that make machines, industrial vehicles and similar products. We possess a number of ISO standards which is proof that every client should expect the best service from us.

Have you had cooperation with any of the foreign companies in Macedonia?

We have cooperated with some of the foreign investors. We have had meetings to discuss possible cooperation with some of the investors, but the conditions which they set are almost impossible to be fulfilled. In the period ahead we expect to start working for one of the big investing companies here.

What kind of change do you wish to see in the business environment, which would enable you to stay afloat and continue to develop as a company?

Macedonia needs a center that stores production materials such as aluminum, copper, iron, brass, etc. because these materials are imported. Our expenses are higher to obtain these than companies in the west. Because of this we lose clients who want smaller orders. It costs us a lot to bring in materials just for that order than what we would earn on it. The state should look for a way to start such a center in cooperation with the leading companies.

Another thing that we want to bring to your attention is that Svemek has been stuck in a legal case of 17 years, because of which we risk losing part of the property which we have purchased by all legal means. Because of collusion by several people, the storage hall that we purchased was sold to another person. The case has been in the media on several occasions. The courts continue to bounce the case back and forth, until it expires in 2020, despite the fact that at the first trial the verdict was in our favor. The verdict presented and attested to all irregularities that enabled the other side to obtain the legal rights to the property, but still, the case continues to linger in the legal system.

Unfortunately, the domestic producers are not protected and the government must undertake concrete measures to improve the business climate for people from Macedonia who generate value to the domestic economy. If there is legal protection by the government, there are going to be many more people who will wish to invest.

Dr. Vlaho Kostov, Head of CEE and Mediterranean region of Panasonic, joins the Macedonia2025 Education Board

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We have the honor to announce Dr. Vlaho Kostov’s joining of the Macedonia2025 Educational Board. Mr. Kostov has a PhD. from the Tokyo Metropolitan Institute of Technology where he was also an Associate Professor. Mr. Kostov has taught both in English and Japanese and has published more than 25 peer-reviewed technical papers. He has lead projects in industry and innovation design while studying at Stanford University.

Mr. Kostov is acting as Research and Development Executive for Panasonic and head of the company’s Central-East Europe and Mediterranean regions. He represents Panasonic in a number of management boards of industry consortiums and associations. Mr. Kostov has more than 20 years of experience in the Consumer Electronics, Telecom and Automotive industries and is dedicated to technology management and developing new business strategies. Mr. Kostov was the President of the International Association for the Exchange of Students for Technical Experience (IAESTE) in Macedonia.

Mr. Kostov has made an immense contribution to the Macedonia2025 in the capacity of speaker and moderator in 2015 and 2016. Mr. Kostov will  contribute to the activities of the Macedonia2025 think-and-do-tank.

Mr. Kostov has stated: “I am delighted to be part of the Education Board of Macedonia 2025 – it will be a privilege to join the inspiring team and further support the noble cause and help build a stronger Macedonia.

PhD. Vlado Dimovski, Economist and professor of Management, New member of the MK2025 Education Board

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We are pleased to announce that Dr. Vlado Dimovski, professor of Management at the University Of Ljubljana Faculty Of Economics in Slovenia, has joined the Macedonia2025 Education Committee. Mr. Dimovski has PhD. in Management and Finance from the Cleveland State University.

Mr. Dimovski has been part of Slovenia’s State Secretary for Industry (1995-1997) where he prepared the Strategy for Increasing the Competitiveness of Slovenia’s Industry; Mr. Dimovski was Minister for Labor, Family and Social Affairs and was part of Slovenia’s EU pre-accession team.

In the private sector Mr. Dimovski has been a consultant for McKinsey and AT Kearney. He has consulted international institutions (UNDP, World Bank, NDI, and Stability Pact), expert associations (FIBA), governments (Montenegro, Macedonia) as well as various think tanks including CEPS in Brussels and the Berkley Round Table for International Economics.

Macedonia2025 is delighted for Mr. Dimovski becoming part of the Education Committee where he will support and facilitate the research activities of the think and do tank. Mr. Dimovski has stated, “I am honored to be invited to become a member of Education Board that can be of a great assistance to the fulfillment of the vision of our organization.”