NEWSLETTER, MAY 2008

The European Day of the Entrepreneur

“The Entrepreneur – Initiator of the development” was the motto of this year’s event in Macedonia. This year the “European Day of the Entrepreneur” took place during the period of four days starting on May 8th in Prilep, May 9th in Skopje and finished in Ohrid on 10th and 11th of May.

At the conference were discussed issues such as government and regional policies for stimulation of entrepreneurship; knowledge transfer between the universities and the industry; innovations in SMEs, IT and the regional competitiveness; business incubators; financing of business ideas, innovations etc. 

The organization of “The European Day of the Entrepreneur” is initiated from Eurocities, European network of cities. The European Commission has supported this initiative and has included the PAXIS project, pilot program for promotion of this event. After the end of the first phase which included gathering ideas from the members of Eurocities and using the advantages from the original event El Dia del Emprendor, whose host was Barcelona, Spain, the “European Day of the Entrepreneur” started spreading around Europe. The basic idea of this day is to promote entrepreneurship not just locally rather to promote a regional and international cooperation.

Main organizer of this event was the European Business Association.  The Ministry of Economy of the Republic of Macedonia, the City of Skopje, the Agency for support of the Entrepreneurship, the Macedonian development foundation for enterprises, the Konrad Adenauer foundation, the SECI project, the Business start-up center of the University St. Cyril and Methodius in Skopje, PREDA, with the support of the Delegation of the European Commission, have all joined forces in order to organize the third “European Day of the Entrepreneur”.

“The SMEs are important participants in the economy as a whole and crucial creators of the social product. The economic program of the Government gives the SMEs a leading status in terms of increase in employment and economic prosperity. The growing number of SMEs absorbs the labor force a great deal – more than 70 % from the overall employees are engaged in this sector”, stated the minister Vera Rafajlovska, at the opening of the central event in Skopje. She emphasized that the Government of the Republic of Macedonia has already set up an institutional infrastructure to support the SMEs.    

Introduction of a subject business and entrepreneurship in the high schools and initialization of launching institutions and come up with alternative financing solutions such as factoring and franchise, are some of the measures that the Macedonian Government will take in future.  

“All the benefits that the European companies and citizens have will become reality for the Macedonian people and the business community”, underlined Erwan Fuere, the ambassador of the EU in Macedonia. He greeted the progress of the Macedonian government in terms of the implementation of the measures from the project regulatory guillotine (concept of cutting red tape). In order to achieve a friendlier business climate not only for foreign but also for domestic investors, the ambassador emphasized the need of continuing the combat against the corruption. In this regard, the Anti-Corruption Commission should be more aggressive in its efforts and the politics should not meddle in the business sphere. When he was traveling through the country Mr. Fuere met entrepreneurs faced with a high degree of red tape. The ambassador also took advantage of this occasion to propose Macedonian banks to be more open towards SMEs and to introduce more convenient conditions in terms of their financing. All of this will contribute to advancement in the EU-integration process respectively in getting date to start accession negotiations. He hopes that the new government and the new government departments will focus mainly towards achievement of this goal.   

Klaus Muller, one of the executive directors of Makedonski Telekom, also addressed the attendees, emphasizing that one of the vital prerequisites to enter the EU is the economic growth, and the entrepreneurship is a key for the economic prosperity. He called on all citizens to become rulers of their own future through undertaking of various entrepreneurship ventures. At the same time, he affirms that in Macedonia there are plenty of educated and capable people who can create a better future for themselves.   

“We have entrepreneurs worthy for the EU”, claims professor Radmil Polenakovik, executive officer of the Business Start-Up Center at the University “St. Cyril and Methodius” in Skopje, one of the conference organizers. Representative of the City College from Thesallonici spoke about the importance of education in the innovation process. At the conference, the ambassador of the United Kingdom, Andrew Key, also addressed the attendees. He was present not only in the role of an ambassador, but also in the role of representative of London, a city that has been proclaimed for the best business destination 17 times in a row. 

Within the “European Day of the Entrepreneur”, the organizer also prepared 10 panels and workshops on subjects related to entrepreneurship and finance of business ideas. 

“The business incubators in Great Britain started to function 10 years ago through the support of the Government, and 4-5 years ago the World Bank and the European Commission started to finance them”, underlined Peter Hermann, from the National Network of Business Incubators in Great Britain. 

One of the workshops that were organized within the “European Day of the Entrepreneur” was dedicated to the financing of start-up centers and business incubators. Hermann emphasized that The Network of Business Incubators in Great Britain does not support only the new businesses. Their 10-year activity has showed that there is a need and conditions for finance of already established businesses, in sense of their enlargement, as well as businesses led by retired persons. Hermann states that his life experience has showed that for the companies financed by business incubators cooperation is vital. The cooperation should be developed and initiated  continuously. “The leader creates environment that makes everybody successful” is the motto that Hermann follows. Hermann is executive officer of a business incubator in Great Britain. According to him, the business incubators take into consideration the socio- economic effect of the society.  

“Alternative instruments for finance of SMEs” was also a remarkable panel. 

“For every dollar invested in SMEs, the general economic profit amounts 10 dollars” – explained Kristijan Kirilkov, international consultant. At the panel he presented the advantages for the banks from working with SMEs. 

Ana Nikolova, operative manager of EOS Matrix, presented the advantages of the factoring like an alternative financial instrument (it is not charged with a tax and it guarantees continuous liquidity for the clients).

Veland Ramadani, assistant at the Shtul University, presented the opportunities for venture capital. “The venture capital in Macedonia, unfortunately, exists only in the entrepreneurship schoolbooks”, emphasizes Ramadani. He says that it is essential to raise the awareness for this type of finance (business angels and formal venture capital), to develop the stock exchange and to connect it with the regional stock markets, to encourage the rich people to finance good business plans, as well as to affirm the venture capital in the other financial organizations. Dragan Martinovski presented the opportunities that the Macedonian Bank for Development Promotion offers.  

Within the panel “Successful business stories” a few successful entrepreneurs addressed the attendees: Ilija Vuchkov, AGV Design, Tashko Rizov, ICL Group and Gorgi Petrushev, TIKVESH. Their speeches were very interesting for the audience. They have proved the attendees that it is worth it to take risks, showing them that a good idea should not be kept only in the thoughts or just on paper. Moreover, their overall message was that a good idea should be put into practice; the calculated risk is worthwhile; one should not give up before a hurdle, but endure; after the first bigger success, it is much easier to achieve the next ones. 
 
Enterprise & Industry on- line magazine
 
The European Commission’s Enterprise and Industry DG has launched a new on-line magazine to present its policies and activities. The principal aim of the on-line magazine was to develop a quick and easy way to keep up to date with news from the Enterprise and Industry DG. Heinz Zourek, Director-General of DG Enterprise and Industry stated: "Readers will find a constant flow of fresh information. And while the magazine articles stand alone, each provides links to more detailed information and background on the topic, so every reader can choose to explore any topic in greater depth." 

The new Enterprise & Industry on-line magazine will cover issues related to SMEs, innovation, entrepreneurship, the single market for goods, competitiveness and environmental protection, better regulation, industrial policies across a wide range of sectors, and more. The on-line version will be complemented by three printed editions a year, the first of which will be issued before summer 2008.

The magazine is financed under the Competitiveness and Innovation Framework Programme, which aims to encourage the competitiveness of European enterprises. Enterprises of all sizes across the European Union are the basis of our economic prosperity, and of the quality of life of all European citizens. That is why the EU places so much importance on ensuring that enterprises benefit from a favourable economic climate, so they are able to grow and create new, better jobs for our citizens. The Union also develops specific, tailored policies to enable individual industrial sectors to compete strongly in the global economy, and where necessary to adapt their business models. The European Commission's Enterprise and Industry DG takes the lead in developing and implementing policy in this field, working closely with national and regional authorities, and industry itself.

European Charter for Small Enterprises – Facilitating SMEs life
 
The conference presents the best policy measures to make SMEs life easier. It usually attracts some 300-350 participants from policy and business from more than 40 countries. This year's conference workshops tackle among other "better regulation for the benefit of SMEs", "fostering the internationalisation of SMEs" and “entrepreneurship education”. This year the conference will take place in Bled / Brdo, Slovenia during the period of two days - June 3rd and 4th. 

Key- note speakers Andrej Vizjak, the Slovenian Minister of Economy and Heinz Zourek, Director-General of DG Enterprise and Industry of the European Commission, will give an overview of the support that SMEs can count upon at EU level for the time to come.

The British Cleaning and Support services association demonstrates how a whole sector now can save up to 200 million Euro thanks to the new model health and safety risk assessments from the government. 

The Swedish tax agency presents the benefits of tax representatives that have just been enabled to do the electronic tax declaration for SMEs in this country.

Spain will present its PIPE- programme which supported nearly 5000 SMEs in internationalising their businesses.    

Wales will demonstrate how the government manages to offer entrepreneurship education to pupils and students of all ages. Today more than 300 entrepreneurs serve as role models in schools to present the fascination of their job to annually 50.000 pupils all over the country.

The conference shows that the Charter countries increasingly learn from each other successful SME policies.

For example, The French “SME Pact”, which commits large companies and public agencies to buy from innovative SMEs, was partly inspired by a Norwegian scheme and has itself since inspired Italy and the Netherlands. 

In other areas, Member States have cooperated right from the start to set up measures together. This is case for the CETMOS patent search system: Austria and eight other countries have just enabled businesses to do a joint search of the databases of their respective patent offices via one single search.

The conference offers policy makers and business organisations from all over Europe the opportunity to pick those from the measures presented that the SMEs of their country will profit the most of. 

World Bank approved 125 million dollars for Macedonia

It was notified from Washington that on May 13th the Board of Directors of the World Bank approved Macedonia two loans for development projects with overall value of 125 million dollars.

The first loan worth 100 million dollars, with repayment period of 20 years and grace period of 5 years, is aimed to support the project for construction of regional and local highways. The second loan worth 25 million dollars has a repayment period of 17 years and grace period of 5 years. 

IFC will support investments in Macedonia

The International Finance Corporation (IFC), member of the World Bank, through investing in the shareholder capital of the Austrian company “Soravia”, will support a various investments in the sector commercial real estate in Macedonia, Bulgaria, Romania and Serbia.  

IFC informs that it signed a cooperation agreement with “Soravia” for support of the development in the business area in the Balkans and creation of better conditions for the activities of the companies in the region. This is the first investment in a company from the branch of the development of real estate that operates in the Balkans.  

Hipo enters the real estate business 

Hipo Alpe-Adria-Leasing, Hipo’s company for financial leasing in Macedonia, established a new company in the country. It is a company for development of real estates that Hipo Alpe Adria has established jointly with the Slovenian Hipo Leasing from Ljubljana.

The new company Hipo MK Invest is established with a capital of 5.000 euros and its basic activity is construction of buildings respectively building constructions. The Austrians Oliver Zintl and Marcel Franc Sumper will manage the new Hipo’s business.

Saraevo Eurohaus enters the broker business in Macedonia
 
The broker-dealer house Eurohaus from Saraevo launches a brokerage house in Macedonia. Sasho Drakulovski will manage the new brokerage house. He was working as a brokerage in various Macedonian brokerage companies. President of the Management Board is Abdulmenaf Begiti, professor at the South East European University.   

Eurohaus is one of the first brokerage-dealer houses in the Federation of Bosnia and Herzegovina. It was established in 2002 and is among the three most successful brokerage houses in the Federation with over 47.000 clients. 

Eurohaus Saraevo is a holding company that is a shareholder and also participates in the management of various large companies from the sectors construction, metallurgy, information technology and investment funds in many Balkan states. Their aim is becoming leaders in the sector of financial services, not only in Bosnia and Herzegovina, but also in the whole region. 

Some of the more important business deals in which Eurohaus participated are the overtaking of the ABC Bank for the client Steiermaerkische Bank Austria, then overtaking of Tuzlanska Banka for the client NLB Slovenia and the tender for Wienerberger AG Austria for IGM Visoko. 

Rebranding of Macedonian Telecom
 
Macedonian Telecom this month finishes the process of rebranding which means that the world famous brand T- Home enters the Macedonian market. The rebranding of Macedonian Telecom is of vital importance for the consumers, the employees and generally for the Republic of Macedonia, stated the chief financial officer of Macedonian Telecom Slavko Projkoski. It is far more than a simple transition from one name to another, put on a background in a different color that introduces a new logo. Actually, it is an important step ahead that announces one extraordinary journey – the company is going through a process of essential transformation from previous monopole to a respected and credible corporate citizen. These changes in the company will influence significantly the quality standards that define the approach to the consumers. That way the company ensures greater benefits for the citizens that are guaranteed through a brand which is recognizable in the whole world because of its reliability, transparency and innovativeness. Macedonian Telecom and Deutsche Telekom are working jointly on the changes aiming at fostering the so-called metamorphosis of Macedonian Telecom in a company that is consumers oriented and that enables access to a greater potential of modern telecommunication services.   

Converging towards this goal means numerous initiatives and new products and services for the Republic of Macedonia as a modern state that is in the state of a continuous growth. That also means strong and unchallenged support from Deutsche Telekom for the Republic of Macedonia as well as for the economic growth and the development of communications on the Macedonian market. In this respect, on the basis of the efforts made by the two leading companies, Telekom wants to play a key role in the economic prosperity of Macedonia. 

The integration of Macedonian Telekom in the brand family of the Group Deutsche Telekom is a crucial step in its constant progress towards a better future. The rebranding is much more than a change of colors – it means upgrading the networks, new portfolio of products, as well as modern services in compliance with the world telecommunications standards. Soon, the consumers will be able to feel the real benefits from the entering of the brand in their homes. Otherwise, the rebranding process of Macedonian Telecom costs several million euros and is a complete investment of Deutsche Telekom.     

Through the rebranding, Macedonian Telecom will start to introduce novelties that will comprise upgrading of the telecommunications infrastructure in the Republic of Macedonia, introduction of attractive packages of integrated telecommunications products, Internet and Internet TV, more simple telephone services with more accessible fixed tarifs, offers of more attractive communications equipment, as well as complete and technologically innovative packages of solutions for communications and connection for the needs of the business consumers etc. 

The transformation from a previous monopoly towards a reliable and respected leadership company is one of the changes that the company is going through. The competitiveness is strengthening continuously and the company functions in such a conditions for a while. That is beneficial not only for Macedonian Telecom but also for the business rivals. But in the same time the competitiveness is advantageous for the citizens who that way get the most qualitative services as possible. By entering of the brand T- Home and all the qualities that it offers to the consumers and the company itself, Macedonian Telecom strengthens considerably the leadership position that it holds on the Macedonian telecommunications market. The experiences within Deutsche Telekom Group show that all the companies become stronger through their rebranding. Consequently, in the period that follows, one can expect further improvement of the market position of Macedonian Telecom on the Macedonian market in the long run.

“Johnson Meti” starts to build its facilities in a couple of weeks

Colin Geoffrey, Director of strategic planning in “Johnson Meti”, on May 15th stated that in 2 weeks he expects to sign the agreement with the Government about the parcel in “Bunargic” where soon the facilities of the largest factory for catalyzers should be built.   

“Johnson Meti” is not a political organization and what counts for us is the stability, the transparency and the vision, and eventually, what I expect to sign in two weeks would be valid 100 years”, stated Geoffrey after the presentation on the dynamics of the construction of the factory for catalyzers that took place on May 14th. He emphasized that he does not expect to negotiate again about the same project.

Geoffrey explained that the negotiations with the Government about the parcel in the high technology industrial zone “Bunargic” are in an end phase. As a consequence the construction of the facilities should start in 2 to 3 weeks. According to him, the facilities should be completed until October or November this year and the production of catalyzers should start in May 2009. 

”Although the conditions alter, according to our expectations the agreement that we should sign with the Government is a long-term commitment for the next years, at least on our part. “Johnson Meti” is unbiased towards the local and national politics and it appreciates the stability and the continuity in every country. We cooperate with the administration in terms of the documentation, and if the Government should be changed in June, we would continue cooperating with the new Government”, pointed out Geoffrey.  

The company announced that the initial investment in the country amounts 55 million euros and in the beginning 250 job vacancies will be opened, with an announcement that this number will increase in 500. The automotive parts produced in the factory in Skopje are going to be distributed exclusively to the European market. The director Geoffrey stated that the factory that is going to be constructed would be the biggest factory of “Johnson Meti” for production of catalyzers. 

The Prime Minister Nikola Gruevski who jointly with the Vice Prime Minister Zoran Stavreski attended the presentation stated that this is the biggest investment in the Skopje technology industry development zone that in spite of the employment is significant because it will contribute to the export increase, introduce new technologies, improve the competitiveness and introduce world standards and working principles where the human capital and the know-how are essential. In the forthcoming period the Government would undertake more than 50 concrete measures about further improvement of the business climate.  

The Head of the Agency for foreign investments, Viktor Mizo, announced that the Agency would continue to work on attracting foreign investments in the country. 

The British company “Johnson Meti” makes an annual profit of 12 billion dollars and has overall 10.000 employees in 50 countries. 

After the American company “Johnson Controls” that has already started operating in “Bunargic”, “Johnson Meti” is the second one in this economic zone that announces a greenfield investment. The Management Board of “Johnson Meti” at the end of November last year came to a decision to invest in Macedonia. An investment that amounts 100 million pounds or approximately 150 million euros was intended. According to that statement of Geoffrey, 55 million euros are intended for the initial phase. He announced that there has been an interest not only in greenfield investments but also in overtaking companies from the chemistry and pharmacy sector in the country.   

Ingra announces investments in the tourism and the construction
 
The Management Board of the Croatian company INGRA that has overtaken the construction company “Mavrovo” has promised that “Mavrovo” will become a modern company in a very short period of time. According to the president of the Management Board of INGRA, Igor Openhein, “Mavrovo” will be included in all the projects that INGRA has, in Croatia and in the region. They expect a huge success at the markets in Europe, in the region and in the Middle East.  

INGRA jointly with “Mavrovo” already works on the preparation of a project for participation in a tender for floodgate construction in Algeria. In terms of the debts that “Mavrovo” has to repay to the State Revenue Office, the Management Board of INGRA has stated that it will respect the decisions of the regulatory authorities and that they will continue to seek a solution for the problem.

The French “Montupet” – next foreign investment in “Bunargik”

Until the end of the year, in the free economic zone “Bunargic” will start the construction of the factory for automotive parts worth 60 million dollars. The factory will be a direct investment of the French company. “Montupet” has its factories in Mexico, North Ireland, Canada, Spain and France and since the beginning of this year also in Bulgaria.

In the factory in Macedonia it is intended to produce aluminum heads for engines “ford” and the products will be mainly exported to England and Romania. On may 28th, the Prime Minister Nikola Gruevski and the executive chief officer of the company, Mark Mayus, signed the Memorandum of Understanding for construction of the factory in the headquarters of “Montupet”, in Lineville.  

Before the signing of the Memorandum Gruevski had a meeting with the president of the company, Stefan Menyan, and afterwards he visited the production plants of the company. In terms of the investment he stated that it would create direct employment for circa 650 people, and in a period of 3 to 4 years it can create approximately 1000 job vacancies with an overall investment value of 100 million euros. “This is a beneficial investment, because it will absorb a considerable part of the unemployed work force in Macedonia”, stated Gruevski. According to him, the investment that should launch commercial sale from 2010 is anticipated to make a profit from 70 to 100 million euros, and in 5 years to achieve an added value of 200 million euros for Macedonia.     

The executive chief officer of “Montupet”, Mayus, stated that they had decided to invest in Macedonia because of the tax relief, the education of a high-qualified personnel at the University in Skopje, the immediate proximity of the airport “Aleksandar Veliki” to “Bunargik”, but also the proximity of Macedonia to Bulgaria where the company already has its factory in Ruse. The initial idea was to build a factory in Romania, but because of the drain of the work force from that country, the company has decided to redirect the investment in Macedonia where the investment conditions are similar and where a logistics support can be easily provided from the factory in Bulgaria.                         

Gruevski indicated that the company is operating in accordance with high technology standards and therefore it is very competitive in the world of the automotive industry. “Montupet” employs approximately 4000 people and achieves a sale from circa 460 million euros. It produces automotive parts for all larger world automotive companies. In spite of aluminum heads for engines, the company also produces automotive tires, security devices, main cylinders and other automotive parts.

The construction of Era City has begun

On May 28th, at the Skopje Fair started the construction of the communal infrastructure of the commercial-business building – priority edifice from the overall complex Era City of the Slovenian Group Era. The construction will take at least one-year time. In the same time the construction of the others intended buildings with different purposes would continue. The construction includes modern business, trade and fun areas.

A consortium from home companies led by “Granit” will carry out the overall construction of the building. Following an international tender, the construction company from Skopje was chosen among other Macedonian and EU- companies.

According to the information from Skopje Fair management there are ongoing negotiations with the potential partners of Era Group for the two shopping centers. “Our goal is to agree upon all the conditions of the joint construction of the two trade centers until autumn. That way we will achieve completion of the main buildings of the complex”, stated the representatives of Skopje Fair.  

The whole investment of the project Era City is worth approximately 155 million euros that Era Group will make available through partnerships. Era City will be the only multipurpose complex that will connect the entrepreneurship industries of Macedonia and Slovenia, in the wider region, as well as in the EU.