The two-day Slovenia Business Bridge investment and development conference started on Wednesday with a business breakfast discussing challenges of management of family companies, and continued with a panel discussing strategies by investors.
The AmCham Business Breakfast saw the panellists conclude that family businesses represent an important part of global economic growth, and that their growth is not incompatible with the commitment to fundamental values. Economy Minister Zdravko Počivalšek pointed to the "precious entrepreneurial know-how" which was passed from one generation to another in family companies, adding that the state would continue to support them. One of the greatest challenges they face is investments, as sooner or later it will be hard to maintain growth without external capital injections, while the entry into ownership by third persons frequently leads to changes in management, he added.
Weiler Corporation General manager Chris Weiler said that enabling appropriate growth while staying true to the fundamental values was indeed a challenge. This may be done with the correct selection of partners and by checking whether the values are reflected in acts, he added. Staying true to the fundamental values does not mean that someone who is not a family member will never be the general manager, he said, adding that he did not have the right to stay at the helm of the company for good.
Gregory Ingram of the investment management company KGAL said that sometimes decisions which were not to everybody's liking, but which brought results ten years, must be made. One always needs to think long-term and take care of employees this way, he added. Tomislav Perović of Rothschild Global Advisory agreed that a family company could also be well managed by external staff, but warned that the generation gap was one of the greatest challenges for successful transformation of such companies.
Also focusing on the issue of inheritance was Miha Žerko of the technology company SRC, who said, based on his personal example, that the initial alienation of the "family member" from the family company could be key for success. "Had I not taken a different business part for a few years, I would not be able to successfully take over the family company later. You have to prove yourself that you can succeed on your own," he concluded.
The second panel of the day, discussing investors, saw the participants conclude that Slovenia wants to be attractive to foreign investors, which in turn confirm that the country certainly offers numerous opportunities. A number of successful investment stories were presented. "I'm very happy with the investment, which has doubled," said Michal Kedzia of the Polish fund Enterprise Investors, the owner of the sports goods retailer Intersport. Also satisfied is Andrea Moneta of the US fund Apollo, which acquired the NKBM bank in 2015 and the Abanka bank this year. "It was a lot of work, but the result is very good," he said, adding that the fund was thinking about investing in other industries in Slovenia.
Ajda Cuderman, the director of the SPIRIT public agency for investment promotion, the partner of the conference, noted that the value of foreign direct investments had doubled in recent years, standing at EUR 15.1 billion last year. "The existing investors see a lot of opportunities for increasing the volume of business in our country," she said, adding that she believed that educated and trained staff was the biggest advantage for Slovenia.
But this is where foreign investors actually see the biggest weakness. "Availability of qualifies workforce and too high taxation of wages," said Kedzia when asked what were the biggest disadvantages of Slovenia. Moneta added that taxation of labour was the obstacle which prevented good staff from being attracted. Slovenian Finance Minister Andrej Bertoncelj agreed that taxation of labour in Slovenia is too high, and announced further tax policy changes in 2020. "A stable business environment is important for every investor, domestic or foreign," said Bertoncelj, which finds this particularly important given that Slovenia is a small and development-oriented economy.
The first day of the conference concluded with a lunch with Prime Minister Marjan Šarec. He congratulated AmCham Slovenia on its 20 years of operation and described it as one of the most active business communities, as an ecosystem of forward thinking people and as a trusted partner. “AmCham Slovenia is a visionary, optimistic and positive organization that has been doing good in Slovenia for 20 years. In all these years we have seen that success is not just about greatness, but about consistency. With consistency comes success,” said Šarec and congratulated AmCham and wished him success in all his future endeavours. “AmCham Slovenia also contributes significantly to improving cooperation between Slovenia and the USA, as it creates significant investment opportunities. All the numbers in recent years show that the two countries are increasingly connected and that they are cooperating more and more," he said.
Talking to the CEO of AmCham Slovenia Ajša Vodnik, he said that in his current term he is most proud of the political stability in Slovenia at rather volatile times, of the increasing number of foreign investments coming to Slovenia, and of the successful reduction of public debt that his government wants to continue in the coming years and in the cooling of the economy. With regard to investments in Slovenia, he said that we are interested in all investments, and that his government does not differentiate between domestic and foreign investments, since "money has no nationality". When asked what should be corrected in Slovenia, he said that tax policy, and that the government is just about to discuss amendments to tax legislation. "The problem in Slovenia is that all procedures are too long, which is repulsive to investors, so I want to reduce these bureaucratic obstacles," he said. With regard to privatization, Šarec said that we should use common sense. “Adria was privatized, but we know it was not the best solution. It's all about people - if you don't have the right people in the right places, there is no guarantee that things will get better. We are continuing with privatization, but we will not rush anywhere, as we have some bad cases," he said. When asked what Slovenia can contribute to sustainable development, he said that we must do our best to be sustainably oriented, but that we will indeed live it and the results will be shown. "We are facing the challenge of becoming a low-carbon society, and our goals are high," said the PM, adding that big countries, not just smaller ones, would have to make their own.
Video of the AmCham Business Breakfast is available HERE.
Video of the panel "Inside the Investor's Mind" is available HERE.
You can watch the photos of the event HERE.