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Read our exclusive interview. |
 MULTIGROUP
Manager:
Mr. Ilia PAVLOV, President & CEO
Contact:
BULGARIA:
59A Cherni Vrah Blvd, 1407 Sofia
BULGARIA
Phone: + 359 2 9879482, 62454 fax: 359 2965080
RUSSIA:
66 Mosfilmovskaya str, corpus 3
104107 Moscow, RUSSIA
phone: 007 095 9566222, 9566223
fax: 007.095.2326439
SWITZERLAND:
43, BaarerStrasse, 6300 Zug, SWITZERLAND
Phone: 41 41 7298170
Fax: 41 41 7298179
USA:
1901 Pensylvania Ave., NW, Swite 701
Washington, DC 20006, USA
Phone: 202 2934207
Fax: 202 2372471
e-mail: mgfinance@aol.com
Great Britain:
14, Austin Friars, London EC2N 2HE, UK
Phone: 44 171 62 84373
Fax: 44 171 6284595
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| COMPANY PROFILE |
 WESTERN EUROPE
MULTIGROUP SWITZERLAND AG is the West European head office of the corporation, overlooking all aspects of the commercial and investment activities in Europe.
EASTERN EUROPE
MULTIGROUP BULGARIA HOLDING AG is the corporation's head office for eastern Europe. It is mainly active in the field of commodity trading and production - natural gas, electricity, coal, steel, wheat, sugar. The company invests in telecommunications and infrastructure projects on large regional and european scale.
RUSSIA
On the Russian and CIS commodity and investment markets MULTIGROUP is a highly regarded and welcomed partner.
USA
MG Finance USA Inc., Washington, DC, established in 1991, is the Investment
Adviser for Multigrooup Finance Establishment, which is the investment banking arm of Multigroup. MG Finance USA invests actively in emerging markets instruments. It provides a wide range of investment management services to Eastern European and Western institutional and private investors: debt trading; investments in emerging markets fixed income securities; portfolio management; structured finances.
| activities |
MULTIGROUP ACTIVITIES
NATURAL GAS
Overgas Inc. was established in 1991. It is the leading player in building and exploitation of gas transport and gas distribution systems. In 1994, fifty percent of the company was sold to the Russian gas giant Gasprom.
BMH - a company mainly working with the countries of the Black Sea region. It specialises in oil-product supply usually on a barter-deal basis.
PETROLEUM & PETROLEUM PRODUCTS
The company Eurola Ltd. concentrates in petroleum and petroleum products and specialises on the supply of petroleum, as well as ferro-petroleum processing in Bulgarian refinaries and chemical enterprises, and the export of petroleum diesel fuel, oils and petro-chemials. Trading with petroleum and petroleum products is mainly with the countries of the ex-Soviet Union, ex-Yugoslavia, Macedonia and others.
Topenergy - an investment establishment, set up by Gasprom, MULTIGROUP , and Bulgargas for joint investment projects in the field of natural gas distribution.
STEAM COAL
Multigroup's General Department for Steam Coal is the main supplier of coal in Bulgaria. The department takes part in importing and exporting of coal and coal products; organising the electric power production from domestic and imported coal in the energy balance of the country to replace more expensive energy resources; investing in projects in other countries for long term guaranteed import of high quality coal for energy and industrial purposes.
ENERGY PRODUCTION AND MAINTENANCE
This is a comparatively new activity in the structure of MULTIGROUP , but it is already recognised in the country and abroad in the production and trading of secondary energy resources - electrical energy and thermo energy. Energy 94 undertakes maintenance, restoration, reconstruction, and modernisation of energy and other industrial projects, participates in the construction of new energy installations - hydro-electric, thermo-electric, and nuclear power stations; participates in privatisation projects on the energy and electrical engineering sectors. The company also provides consulting and engineering services. Through ENERGY 94 MULTIGROUP is the official representative of the Russian "Unified Energy Systems" in the sale of electrical energy on the Balkan peninsula, as well as for construction of energy installations.
Minstroy Mining Company was established on 1991 for underground and linear construction, research, development, and exploitation of mines. The company is active in Europe and Africa.
METALS AND METALLURGY
Intersteel Ltd. specialises first, in trading with metals, such as: products of ferrous and non-ferrous metallurgy; raw materials, and materials for the metallurgical industry; and second, in importing steam coal, domestic coal, and smelting coke. The Inter-steel division is developing its own production on the field of precision casting and mechanical engineering.
MECHANICAL ENGINEERING
Balkanmachinery Holding Ltd. is a recognised and established project engineer for other companies' projects and transactions. It is also a leading partner in the mechanical engineering and the electromechanical industry. This includes metal-working and wood-working machines, conveyor systems, transport and storage equipment, agricultural machines (electro-motors, generators, transformers, appliances for high and low voltage), processing instruments for metals and non-metal materials, instruments for pressing and squirting. The business is specialised in the acquisition of intellectual property and its use as a market product. "Balkanmachinery" operates mainly on Russia, Belarus, Ukraine and the Baltic States and participates in several German mechanical engineering concerns.
Balkanmachonery has invested in the construction of the thermo-insulation plant Gomaplast in the city of Yambol, as well as in the contact lenses plant Multilecon, Sofia.
DISTRIBUTION OF PETROLEUM PRODUCTS
Ares Ltd. has created a network of gas stations. It owns also a network of supply and transport stations.
CHEMISTRY AND CHEMICAL INDUSTRY
CPMT Ltd. specialises in import, export and processing operations with petrochemicals, industrial chemicals, polymers and other chemical products. The company works in collaboration with the biggest refinery in Bulgaria - NEFTOCHIM Bourgas, as well as with other big chemical producers.
FINANCE
Credit Bank Ltd. was registered on 1991, and has a registered capital of
1,022,703,000 levs. In recent years the bank has established a sound and broadly-based clients portfolio. The bank's correspondent network includes 105 foreign banks from 37 countries and 27 Bulgarian banks. As a member of S.W.I.F.T., Credit Bank Ltd. makes payments in real time, which guarantees a quality service for its clients. The bank has modern computer systems and uses the latest software applications and information technology. Credit Bank Ltd. also uses Reider Dealing System in order to facilitate a full service foreign exchange and money dealing treasuries operations. The audit of the bank is performed by the international accounting firm DELOITTE AND TOUCHE. Today, the bank consists of head office, 20 branches and 16 representative offices. The policy of the bank on carrying-out credit transactions is constantly improving and providing new products and services.
Loans are granted to companies from the food, wine, and tobacco industries, chemical industry, light industry, power engineering, transport and trade. Lending to big state companies is combined with granting loans for small and middle-size companies from the private sector, which contributes to the diversification of credit exposure. Credit Bank has been chosen to service one of the World Bank loans.
DISCOUNT HOUSE
Discount House is specialised and works closely with the financial offices of the Group in Bulgaria and abroad. Its basic activity is financial consulting services. During the last three years the company was most active on the Bulgarian market for debt deals and trade financing operations.
BALKANSKA BANKA - SCOPIE, MACEDONIA
TOURISM
Multigroup's Tourist Holding acquired two of the most interesting tourist entities in the country: Grand Hotel Varna and the tour-operator Balkantourist Ltd.
Grand Hotel Varna is a five star hotel on the Black Seaside, with 457 rooms; 41 suites; 2 restaurants; medical and recreational centre, offering more than 100 medical treatments, mineral and sea water, sauna, massage; conference centre, sports centre, consisting of four tennis courts and an indoor and outdoor pool, bowling and squash courts; business centre with complete office equipment, communications and banking services. In 1995 the hotel was granted The Annual Quality Award of the National Trade Academy of the USA and the 21st International Award for Tourist and Hotel Industry.
Balkantourist Ltd. is the largest Bulgarian tour operator. The company organises individual and group trips all over the world, as well as in Bulgaria. It also co-ordinates trips for visiting sports events abroad.
Balkantourist has an office in New York USA, providing mainly services covering Eastern and Central Europe. The company is a member of UFTAA, ASTA, JATA, ETOA.
Climate M is the company that manages the
Rila hotel in the beautiful winter resort Borovetz. |
| STRATEGY |
INTERVIEW WITH MR. ILIYA PAVLOV
PRESIDENT OF « MULTIGROUP HOLDING »
Mr. President, there is no doubt that your company is the leader in Bulgaria. Could you tell us how you began your business?
That is a good question since it covers two things. First of all, we are about to celebrate our tenth birthday. Secondly, this is a matter of the situation in Eastern Europe and in particular in Bulgaria. « Multigroup » was founded in and continues to operate in extremely complex circumstances of an emerging economy. Under the Eastern European sun, nothing is the fruit of miracle. This home truth has been constantly proved in our achievements. 10 years ago we began as the first private company in Bulgaria. When one day the history of post-communist Bulgarian business is written, it will have to begin with the name « Multigroup ».It was a co-operative founded by seven persons, which was at the time the only legal way to exist as private businessmen.We were motivated by the possibility of working for ourselves which in its turn led to the intensive development of our business. Then came the moment when we began to specialise in our activity. Naturally, with the wide open market at the time and as a result of our efforts, we very quickly developed speed and this was decisive for the future development of the Corporation. Naturally, there was also a negative reaction against all this, especially since we provided a practical example of how to do business outside the control of the state bureaucracy. Certain people saw this as an act of aggression and continue to do so even today. I suppose that it was aggression, but this concerns only the development of the company.
Q. It is well known that your company has interests in almost all sectors of the economy. Is this your real strategy or are you trying to concentrate your capital and efforts in specific sectors?
A. We have long since identified our strategy. For the past five years we have known what
to aim for in the medium and the long-term. Each of the company’s businesses has its own 3-year plan and a plan for the period in excess of five years. All our activities take into account the reality that we are living and working in the conditions of a permanent economic crisis. One American president described his crisis in terms of two hieroglyphs. One showing the difficulties, the other – the opportunities. The main thing is to achieve the result. This means that when a profit can be made it has to be made. At the same time this also leads to preventing additional competition. Of course , it is very important in every case to adhere to the rules of the game and as far as this is concerned I believe that « Multigroup » can be an example to other companies in the private sector on Bulgaria.
What does your company represent now and how do you see its future?
Today Multigroup is a modern company with a structure which fulfils the most modern criteria of effective business. The head office of the holding company is in Switzerland and has a staff of 20 persons. It manages two main economic groups. This first is the industrial group which consists of 34 industrial companies and our trading company « MG Trading ». The industrial group includes companies which produce cables, sugar and sugar products, sunflower oil refineries and others. There are a number of companies in the area of light industrial goods such as textiles and leather goods. As an independent one in this group is our tourist business. It also includes the engineering company « Minstroi », whose main business is the construction of mines, the extraction of raw materials and repairs to mining facilities. Together with this here is also the company « Globo », which develops systems for communication. Our commercial activity covers everything from trade in cables and ferrous metals, ores, scrap mental to grain, wine and other types of mass goods. The second group is financial. We have stable investments in two commercial banks, one of which is in Bulgaria , the other is in Macedonia. We own an investment bank, « MG Finance », which operates mainly in the USA and the UK. We manage the « MG Elite » privatisation fund. We have two insurance companies, « Sofia Ins » and « Sofia Life »,which also belong to the financial group. As you can see the Corporation has very wide interests but it cannot be said that we are interested in everything. Put more simply, we are interested in developing profitable business.
What you have told us about the modern face of Multigroup sounds very impressive, what are your financial results?
Turnover for 1997 was 1.5 billion US dollars and manufactured goods for the same period were at a value of 700 – 800 million USD.
It is said that one of the strongest points of the Corporation is the experience of its employees, is this true?
One of the few valuable items in Bulgaria is human resources. We use the capacity of our people in the most rational way. However, this question is rather complex since the Corporaton employs people from four different generations and it requires a great skill to establish a good team. At the same time we do something which has been done in developed market economies for a long time and which is strategically justified. We sponsor young people to study in the most prestigious universities in the world. Some of them already work in the Corporation at a management level. Of course we are also aware of the international labour market, which means that we can acquire not only the experience of an international company but we also become one. We are mainly represented in Eastern and Central Europe – the Black Sea region, the Ukraine and Russia. I have already mentioned that we have offices in Switzerland, the UK and the USA.
Tell us something about your office in the USA .
We have two offices there. One is in Washington, the other is in New York. The office in Washington belongs to the financial group and is concerned mainly with project financing. We manage the funds of a number of clients and operate with securities. The office in New York covers two main areas - tourism and a number of financial consultant services.
Mr. Pavlov, in what areas do you hope to attract partners in your future activities?
As you know the majority of investors are hesitant when it comes to developing markets, such as Bulgaria. A further problem is that the credit rating of the country is still not high enough. In the future, however, high capital profits are possible, since there is still the possibility for acquiring cheap shares. In this area, Multigroup has managed to acquire such shares not only in Bulgaria but also in Eastern Europe. Their actual value is hundreds of millions of dollars. So there are good opportunities for investors. On our part we are interested in finding foreign partners in the processing industry, which needs new technology and improvements to machinery. Of course, the path to this aim is through globalisation and the integration of European and world markets. We hope that the trade agreements signed by the Bulgarian government relating to trade with world economic institutions and the standardisation of customs and export regimes is an important factor for the good involvement of Bulgarian business in world trade. All this makes us want to look for active contacts with foreign partners since this will make us even more competitive in the new globallised economic environment.
Mr. President , despite what you have achieved, until a few months ago your corporation could not boast of a good image. How can you explain this and what have you done to improve it?
First of all, I would like to say that to a great extent the bad image of the corporation, if it could be called « bad », was due to factors in the past, based mainly on the malicious exploitation of public opinion on the part of those who did not like the fact that Multigroup was doing well. We also made mistakes in the beginning, which we have corrected. We are trying to achieve transparency in our activities. We began with an international audit carried out by Arthur Andersen and we have a programme until the end of the century to make our company public. My consultants, including the foreign ones, recommend us to initiate proceedings against everyone, who dare to slander the company, as a second step. We have begun such proceedings in London. You are probably aware that « Bloombert » made a public apology in the London courts for libelling Multigroup. Then there is the attitude of the media. In every case it has to be adequate and we have already taken the necessary steps. We are trying not to allow insinuations and misunderstandings. An example of this is the rumour that I wanted to leave the country. You must understand that I am an international businessman, even though my company was founded only ten years ago in Bulgaria. Business specifies the places where I live ; I spend four months every year in Bulgaria, about six months in the USA and for the rest of the time I am in Switzerland and London.
Mr. Pavlov, my final question, what is your message to the readers of our journal, which, as you know, will reach 2.5 million people?
I would like to say that which is dictated by my experience of life and that of businessman. First of all I am happy that with my colleagues we are able to work in the conditions of the transition from a planned to a market economy. This has been a challenge and has made us exceptionally competitive. For this reason I believe that the main thing is for everyone to adhere strictly to that which he has marked out for himself as a goal. Satisfaction, without doubt, comes in the end. It comes from the respect of people you work with and who value your work, it comes from the environment in which you live. If one does not take on challenge, one can achieve nothing. That is what I want to say to your readers – take on the challenges of the time.
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© World INvestment NEws, 1998.
This is the electronic edition of the special country report on Bulgaria
published in FORBES Magazine's
November 30th issue.
Developed by AgenciaE.Tv
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BULGARIA, 
