Mr. Otava, there is no doubt that your company is one of the biggest trade companies in the Czech republic. Could you give us a brief historical background ?
Metalimex is a company that celebrated its 50th anniversary last year. We have undergone many changes in relation to all the changes that this country has experienced. But we keep our focus and trade with the same things we started with. Those are fuel, non-ferrous metals, gas and electrical power. For the whole time, Metalimex has kept its good financial standing and the whole transformation process has not really affected us. Contrary to other companies where many people left to start their own business, our company has been stable, as for our employees, and has also kept economic stability.
What were the main reasons for that?
First of all it's because of the commodities we trade and know-how of our company. Over the years we have established a good cooperation with foreign and domestic companies. We cooperate with commercial partners in Germany, Austria, Italy, Switzerland, Finland, Sweden but also with the countries of the former Eastern bloc such as Poland, Hungary, Ukraine, Russia and Romania. We work with partners we know for a long time and we have good relationships with them, just as with new partners, but we verify them for reasons of the necessary caution and business risk .
You know that our readers are businessmen and they like figures so could you give us a brief overview of you financial results? To be more precise, what was your turnover last year and what are your expectations for this year?
In the past three years there have been fluctuations. It was very much dependent on currency rates and also on changes in this commodity market. In 1998 our exports and imports amounted to 9 billion CZK, roughly. And for 1999 we expect that there will be a significant increase to 15 billion CZK which is about 69% inter-year increase. We deal with EU countries in volume of 70 %.
How do you explain this? Is it may be because the Czech economy is recovering a little bit? Or more favorable exchange rates?
Metalimex is part of a group that's interconnected through its capital. The main holder of this group is Karbon Invest share holding company which is the largest production-commercial company in this country with consolidated turnover of 40 billion CZK. Metalimex is an exporter and importer for this group. As a result of this and other positions Metalimex holds we expect to reach such an increase. And we have taken up export actvities from Ostrava mines so now it's our responsibility and that is the cause of this significant increase too. We are a company with stable relations, our stability is based on the link between producer and trader. I believe that through this position Metalimex will become the second largest exporter after Skoda Auto.
There is no doubt that your financial result and the growth of Metalimex for 1999 is going to be a success. But as a chairman of Metalimex, could you give us the guidelines of your strategy? Where do you see the best opportunities in the future growth of Metalimex?
We have our medium-term agenda till the year 2003 and apart from classical relations that we keep with other companies we trade with, it's our intention to create a non-standard system of trading. We have already started with this and we are going to continue going this direction. I am talking about getting involved in international projects, e.g. Metalimex signed a contract with Polish Weglokoks to supply Ukraine with 3.5 million tons of coal. In Ukraine they use this coal from Poland to supply their power plant Burstyn that generates power for Ukraine and is further imported to Slovak market. We are also negotiating importing it to the Czech market too. With the recession we have, the price differences would give advantages to Czech exporters (CEZ) on exports to the West. Undirectly we are solving also problems with brown coal. Currently we have three or four projects of this kind that we want to launch next year. It's a way to get involved into European and worldwide projects. Of course, being in such a position, we are contacted by other world companies such as Enron, National Power, AES and French EDF. They see us as a means to get to Middle European and Eastern market.
As a crossroad to Eastern Europe?
Exactly.
So if I understand well, may be we can say that entering the new millennium, Metalimex is looking to the entire world for its activities.
Precisely. Just one example of how we are trying to get attention of other world companies. Dr. Jelinek, who is chairman of our supervisory board, used to own Transcoal company which was an significant exporter of coal from South Africa to Europe. And now he is our contact person who is able to get us in touch with companies you have probably heard of. We also assume that this year we will issue new shares, that should probably happen in April and we are going to address all our potential business partners to take part in this. And that's how we want to get everything interconnected. Metalimex is a company that has always tried to be open and transparent. We play with our cards on the table. | Mr. Otava, as we say in Europe and in the U.S. as well, contacts often mean contracts. What is your company doing to encourage contacts?
As for the fixed positions we hold, I myself deal with significant business partners twice or three times a year - RAG, Voest-Alpine and companies like that... and we usually assess how trade is going, we discuss potential improvements and so on. Other than that we take part in all international events where we can look for such contacts. I also have to say that there are Western companies that contact us themselves. So we are in a pretty good position where we can further develop things. About 40% of our business activities are covered by middle-term contracts with the clauses that the prices has to be negotiated within the scope of one year. In year. In view of the significiant changes in prices of commodities we deal with, we adopt gradually the quarterly prices, because the dramatic changes in prices of electric power, coal and metallurgical products make his procedure necessary.
Could you give us a brief background of your own professional experience. how did you arrive at a head of metalimex?
I used to work in OKD Ostrava for a long time but in 1993 I started working for Ceskomoravsky doly Kladno (Czech Moravian mines) which was a significant shareholder of Metalimex. Then in 1995 the general meeting elected me as a member of supervisory board of Metalimex. I stayed on the board for about 2 years, then we strengthened the capital of Metalimex, I moved to the board of directors.
Following all the changes such as privatization, we realized that Metalimex is a very significant company and takes care of 50% of activities of the group I mentioned at the beginning, regular cash-flow included so we work from this position. Originally we believed that we wouldn't have to have these executive positions but unfortunately the situation in the Czech republic is such that you still can't rely just and only on the management. You can't rely on supervisory boards and boards of the directors etc. If you are a significant shareholder, you have to manage the company yourself. Our government falsly believes that all companies with state ownership can be managed through supervisory boards and boards of directors but that's not true. Our advantage is that we know the practical problems, manufacuring, we are familiar with the commodities. We have never dealt with commodities we are not familiar with. Banks appreciate this because we make a technological whole. Metalimex has a further advantage that within that whole group we are quite independent and have other commodities too. We really fullfil the role of an independent commercial entity.
What has been, as a more personal issue, your main achievements since you have been chairman of Metalimex?
After all those years of stagnation when we didn't really move and when the turnover and trade haven't really changed much, in the past two years this has changed and our trade has developed. In 1999, 2000, 2001 we expect a great increase while employing the same number of people and keeping financial stability. It's quite difficult to keep this position and develop it. The fact that we are developing and that things are going to improve is caused by two things. First of all it's our know-how and secondly it's our financial stability. We are known as a company that is serious and reliable so when we say something, people know they can rely on this.
As a final issue, what would be your final message to our readers?
I believe that within the next few years, the Czech republic will become a stable and interesting country also thanks to its interesting and good geographical position. Some people believe that the environment here is risky from the point of view of banking or financial point of view, I don't think that they are right. It's all about individual companies which are linked either through investments or the trade they do and Metalimex is interested in presenting itself through your magazine so that more poeple know about it and we want to expand the scale we have worked on so far. We would like to participate in the non-standard international projects which, as I know, have already been launched and have been working well. We cannot trade with everything. It's about cooperation between the partners, each of them doing their own business with a financial, economic and profitable outcome. When the correct rules are set at the very beginning, then there are no problems. I am more of a pragamtic, I don't want to talk in clichés but I believe that you will get my message to the readers from this whole interview. We are enourmously interested in taking part in the projects. We are ready to cooperate in the framework of reexports in third world countries, in Europe, all over the world. |
