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.