Hot topics

Slovenia Business Week no. 40: Managers Say Slovenian Companies Must Expand Abroad to Survive

The debate was organised by the Faculty of Social Sciences to mark the publication of the UNCTAD World Investment Report

Managers of some of Slovenia's biggest companies insist that businesses must expand abroad if they are to weather the ever fiercer competition. The danger of not going international is greater than the risks associated with doing business abroad, concluded a debate at a conference in Ljubljana on Thursday, 29 September.

Slovenia can compete with Europe and the US in terms of labour costs, but the competition is moving production to low-cost countries and such pressure will continue to grow, said Stojan Petric, the chairman of Kolektor, the largest maker of commutators in the world.

Kolektor has facilities in Brazil and China, whereby Petric noted some of the dangers associated with moving production abroad. He said that companies entering China must study the laws precisely, examine the differences between the regions and get acquainted with "unwritten rules."

Marjan Kramar, the chairman of Nova Ljubljanska banka (NLB), meanwhile stressed that only companies which have a development strategy should embark on expansions abroad. The NLB, Slovenia's largest bank, has already invested EUR 350m abroad.

Ales Cerin, a board member at grocer Mercator, presented the retailer's plans on foreign markets. He said the company seeks to create a presence in Macedonia, Romania, Bulgaria, Ukraine and Azerbaijan. Albania and Montenegro are also in their sights.

Speaking about the risks of doing business on foreign markets, Cerin said the company's policy used to be to entrust the management of foreign subsidiaries to local managers. However, this has proved unsuccessful and there is now at least one Slovenian manager, typically in charge of sales or finance.

Japec Jakopin of the yacht maker Seaway noted that Slovenian companies are small and therefore very flexible, but their progress is hampered by an unfavourable business environment. A lot of work needs to be done in this field, he stressed.

The debate was organised by the Faculty of Social Sciences to mark the publication of the UNCTAD World Investment Report.

Source: Slovene Press Agency STA

Author: STA