Škegro: A Good Entrepreneur Will Succeed in Any Industry

At the very beginning of the round table ‘Opportunities for Growth’, during today’s Lider conference Day of Big Plans, Damir Zorić, CEO of Euroherc, reflected on previously presented forecasts for 2014. According to him, too much fuss is being made about whether GDP will grow by one or zero percent.

– In bad times, a company can be extremely profitable, but it can also be the opposite. I do not expect significant growth and I think the biggest problem is that we have lived on debt for too long. The budget has ballooned, we do not know what we spent the money on, and we will leave debts to future generations. We have the opportunity to fix the situation and it would be a shame to waste it; in other words, we have top players but they are not scoring goals – Zorić was clear.

The difference in the growth forecast of one percent does not overly concern Borislav Škegro, the owner of Quaestus, who explains that the much bigger problem is the structure of domestic tax revenue, which is not a good indicator within the GDP structure. An even bigger problem is the very low reform capacity of the Government, and here Škegro does not expect any positive changes. In his interpretation, the small capacity of the Government can also be read from yesterday’s messages of Slavko Linić, who has obviously been left alone in a barren space without any support from other ministers. ‘This is just fiddling, the main issues are always avoided,’ Škegro was resolute.

Vladimir Kovačević, head of Đuro Đaković, sees opportunities for growth in 2014 in conquering new markets and investing in technology. – Đuro is a classic representative of his industry who since Croatia’s independence is no longer a tanker in calm waters. From our perspective, Đuro is a company that has strongly turned outward – where it can only survive. For this, technology transfer and entry into new areas such as water, wind, and biomass are necessary. Such programs will stabilize the company, and what is in any case an opportunity for growth are new technologies for investment in management. Due to a lack of money and incompetent management, many of our companies have old equipment that cannot produce a competitive product – he stated, adding that the breakthrough must head towards the countries of the former Soviet Union.

This market has already been conquered by Ivo Usmiani from JGL. He believes that sustainable profitable growth cannot exist without entering foreign markets. His company has grown at annual rates exceeding 10 percent even in recessionary times, thanks to timely breakthroughs into the markets of the former USSR and Western Europe. – Things should be viewed globally and long-term. In our business, five years is nothing, as product development takes 2-3 years. The system needs to be organized 10 years in advance and business should be directed towards a business strategy – Usmiani explains.

Tomislav Šerić, head of HEP, and Damir Zorić from Euroherc, are struggling with competition coming from Europe. When asked whether he would cut insurance premiums, Zorić replied that such decisions are not made without careful calculations. Commenting on drastic price reductions by some insurers, Zorić said:

– Marketing is a wonder and such things are not rare in insurance. When liberalization began 20 years ago in Greece, 29 companies went bankrupt. Challengers are like sprinters, they start sharply, lead for two laps, and fall behind for the rest of the race. Liberalization will not go in this direction because the price of a fender on a Golf and a broken leg have their price, which is standardized in the EU. Half of the companies in Croatia do not even have the necessary capital adequacy, and such challengers can be brought to their knees by just one serious unfortunate incident. We have been taught to shout ‘growth growth’ and ‘lower prices’, costs are ignored, and no one asks the question – would they agree to lower prices and lower wages.

Šerić says that HEP’s problem over the decades has been that it was a monopolist. Now we need to decide whether we want a market-oriented HEP or HEP that abundantly subsidizes the state and the economy. The question is also whether HEP should be a large employer and whether it can become a regional major player in that form. – We must get rid of hidden subsidies that citizens are not even aware of and turn to the market; politics no longer determines the price of electricity – says Šerić.

Mladen Pejković, director of VIP, says that the telecommunications industry will not grow constantly and that this almost religious approach should be discarded. Since his company is part of a global corporation, the possibility of entering foreign markets does not exist, which is why VIP has turned to horizontal growth through acquisitions and investments in cable television. Growth will also be nurtured through short-term solutions and innovations that will keep the company ‘tense’.

In the conclusions of the panel, Škegro, as a potential investor in each of the companies, states that a good owner and entrepreneur does not need to think too much about which industry to engage in and rack their brains over where the hidden sector opportunities are. If the company is well organized and has good partners, it will succeed in everything.