Sato and Kiro Dandaro: What Does Business Look Like One Year After Acquiring a Company Abroad?

Just under a year ago, the Zabok-based company Sato, which specializes in label production, acquired the Macedonian company Kiro Dandaro, primarily engaged in the production of flexible packaging. We spoke with owner Ratko Habus about the current state of affairs and discovered that entering the company initiated an investment cycle in fixed assets that will amount to five million euros upon completion.

Sato was founded in 2008, and after three years of successful operations, starting as a coordinator between producers and customers, it launched its own production in 2011. A few years later, Sato became one of the leading printers of self-adhesive labels in the region. The company currently employs more than 70 staff, and in 2022, it achieved a total annual revenue of 18.7 million euros, which represents a growth of 38.5 percent compared to 2021, when it recorded 13.5 million euros in revenue. The company’s CEO is Željka Filipaj, and prior to the latest acquisition, they also purchased three smaller companies: Grafpex, Etigraf, and Birotehnik.

– As you mentioned, we had experience in acquisitions, so we already knew what to pay special attention to. The acquisition in Macedonia was friendly, so all data and information were transparent without hidden intentions. The negotiation process until the final agreement lasted just over a year. Soon it will be a year since our ‘entry’ into the company, and we can say that the integration of the company has been successfully carried out – says Habus.

It is worth noting that the Macedonian Kiro Dandaro started operations back in 1944 in Bitola as a craft workshop with 22 employees, and after six decades, it evolved into a modern printing production employing around 200 staff. In the early 1990s, the company transformed into a joint-stock company, now owned by Croatian entrepreneurs.

The business strategy is, at first glance, simple. Sato’s organic growth is not self-sufficient; it needs to grow through acquisitions, explained Habus. In this way, they strengthen their market position, increase market share, and achieve quicker access to human resources, which have never been more important for business development. Thus, Habus says, they timely identified the labor force issues they are now facing, and through successful acquisitions, they achieved positive selection of the workforce.

Founders Know Best

– The challenges we face are of a business nature, relating to market competitiveness, the fight for customers, but also with suppliers, regarding the challenges of material availability and prices – commented Habus, but added that the company’s operations in Macedonia, as well as the entire group, are proceeding normally.

In the Macedonian company, certain reorganizations were carried out to increase efficiency, and there was also a generational change in which the previous director retired. To ensure a successful transition without effects on customers, suppliers, or the organization itself, the former director remained in the company as an advisor.

We have already written about a similar healthy practice of acquisition, or healthy transition. When Boris Sruk took over Famax, the only condition was that founder Robert Jurić remain in the company for at least five more years – because who knows the company better than its founder?

We were curious about how cultural differences affect business. Habus claims that these differences are negligible, meaning they do not impact business and are not an obstacle to communication. A positive effect of every successful acquisition is the exchange of mutual knowledge and experiences.

– Guided by our experience in acquisitions, we successfully exchanged know-how within the group to achieve maximum synergy. With the entry into the company, an investment cycle in CAPEX was initiated, which will amount to five million euros upon completion. With new investments, we will strengthen our position in the market as one of the leaders in flexible packaging.

Regarding new opportunities and potential acquisitions, we are interested and in contact, but currently, we do not have anything concrete planned for realization. The market situation shows us that experience is no longer an advantage, and the reason for this can be found in new, unpredictable situations in the market. For us, it is important to be present in the market, monitor all situations, and communicate with all participants – concludes Habus.