faces up to the challenges of the future

Interview with:

General Manager
Can you tell us about the history and the management structure of Llamkos?

Llamkos started production in 1981 and is an enterprise consisting of two factories. One of these factories produces the cold galvanized sheet, in a process called full hard. At that time this was one the most modern factories that existed in Europe. It has the capacity to produces 120.000 tons a year of galvanized sheets. The staff that works here has been trained in France and Switzerland, and in other Western countries, they have internationally recognized high qualifications in their field of expertise.

Could you tell us more about its recent history, after the NATO intervention?

After the war, like all the other factories here in Kosovo, the Serbian forces robbed this factory. They did not achieve to destroy the equipment totally. Our experts very fast put the machinery that was installed here, back in work, and they enabled the factory to work productively. We could almost work with 100% of our capacity. We produced around 4.000 tons of galvanized sheet in a period of 13 days! This means that we saved the capacity even though the machinery is 20 years old. After the war we have further increased our capacities and now this factory serves the whole of Kosovo and provides spare parts for air conditioners and ventilation systems.

Who really owns the enterprise, tell us about the form of ownership present in Llamkos?

This is a socially owned enterprise and we are still in the transitional phase. It means that the workers are the 100% sole owners of the factory. At this moment there are 398 workers. From this number, 63 of them have a university degree and 32 have a technical school degree. From the beginning of our operations we had a positive turnover mainly because our products are of high quality and are in high demand.

What do you think has been and is your contribution to the Kosovar economy?

Our contribution to the economy is considerable. From the fact alone that we have had very serious difficulties in our economy with regards to this I am talking about UNMIK, we also have problems with the system of customs too. If Kosovo had to import all this material that I mentioned before, it would have cost us a fortune. Now, we are the ones that provide Kosovo with these materials and at the same time save some money to the people. We are also producing galvanized sheet that is used for the construction of roofs of the factories and profiles for the sandwich elements that is used for the walls of the factories. Another contribution to the economy is the fact that 400 workers are employed here, which means that we are supporting 400 families. Before the war we used to have 615 workers, a decline was inevitable, but still we are in a considerably better position. I am particularly happy to say that we didn't have any donations from the humanitarian organizations. We achieved everything with our own work.

Earlier you mentioned that during normal operations the factory produced 120.000 tons of galvanized sheet metal. How much are you producing currently?

Because of the previously mentioned problems with the customs, we couldn't supply the material for more production so we managed to produce only 4.000 tons of galvanized sheet. Unfortunately we were unable to sell the entire sheet but our revenues were still around 600.000 USD. Half of the amount produced we had to refine in the other factory. I mentioned earlier that we have two factories, but I did not talk about the other one yet. The other factory started to work in 1988 and the value of galvanized sheet increased by 100%, we are trying to compete in the international markets too, with the galvanized sheet and with the final products.

What percentage of your total profits is derived from the exportation of your products?

The problem with exporting is that first we have to import the raw material and the taxes we have to pay are 26.5%. Nevertheless, we are ready for the export and we don't have any difficulties because we had the possibility to distribute our material in Italy, Austria, China and Greece. Coming back to your question, 15 or 20% of our total production was exported to the former Yugoslavia. The percentage of export of our total output was around 80%. The capacity of our production is very high, even though the market here is small, but don't forget we were producing for the whole of the Federal Yugoslavia and the European market, the former Soviet Union, Nigeria, China, Middle East and so on.

Before the war you were supplied with raw material from Trepca, when will this cooperation resume so that you may be relieved from having to import raw material?

We were supplied with zinc from Trepca before the war. If we would produce to our full capacity of 120.000 tons then we would need 7.000 tons of zinc, so now when we want to produce, we have to import the zinc. The issue of reopening the mines is still being discussed. Even though it is not in my competence to discuss about that issue, I think that Trepca needs a lot of investments.
Would you say that the future of Llamkos is to align yourself with a foreign investor or perhaps with another company that would provide you the raw material as well as perhaps financing for upgrading of machinery as well as opening new markets?

We are very interested in the different cooperation possibilities. That is included in our long-term strategy. We already have an American partner, US Steel. For the moment we are still a public factory and the laws of privatization haven't arrived yet. The best thing for us and even for our partners would be to bring the raw material themselves, they can provide the zinc too because we can only have small amounts. The ammonium is also needed, together with propane and butane too, because we have an oven but we need these elements to stabilize the temperature of heating. I think we could share the work here and then rely more on our partners in the distribution of our products. These are our plans for the moment, when the privatization laws will be established and we will see what else we can offer them. We are interested in finding a very strong partner because we have a complex of galvanized sheet here. That complex haven't been finished yet, we still need a line for coloring and for plastic as well as another line for sandwich elements. We have several projects, and the infrastructure is already ready as we prepared for it, we just need the investment. We have the equipment but we need the buildings for the products that I mentioned before and then we could form a corporation for galvanized sheet. This is our long term strategy and that's why we are interested in finding a serious partner because we take our job very seriously and we need a serious partner to be able to finalize things. The best way for these two factories to begin working is through privatization. I am really honored for your visit here, because I believe that your project will help us advertise our products and to attract more attention from the international community on the positive things that are happening here in Kosovo.

What makes you think that you could compete in the world markets and how can you guarantee reasonable returns for foreign investors?

We would guarantee with our specialized staff that we have here, we guarantee the quality, the infrastructure is settled very well, we have rail tracks on our territory that are connected to Thessaloniki and Northern Europe, then you can be connected with the port in Durres (Albania.)

What do you think about the current level of foreign investment in Kosovo?

The difficulties are that we have to wait for the laws of privatization to be applied here. Kosovo is becoming safer every day, in that way it offers a growing number of possibilities to the investors in forms of share holdings, whether the shareholder is from Kosovo or independent. So we think that the laws of privatization here would have value even for world trade. When we take out the existing barriers, the investors can be sure of themselves to invest here.

We want to know your opinion, which sectors have the most potential here?

We have a refinery industry, which is very developed. There are factories that have old technology but they have the possibility to be revitalized and once revitalized they represent a serious potential. We have an advanced industry here and there are a lot of projects for the development of Kosovo. We also have mineral resources like gold, zinc, and coal. Trepca's mines have lots of potential and the doors for the geologists are still open, there is still some research to be done and wealth to be found. We also have the factory Ferronikeli that needs financial injection because they have the resources, the raw material, but as most of the companies here lack finances.

Behind a very dynamic company there is always a man of equal size. Can you tell us something about yourself and what you consider to be your contribution to the success of Llamkos?

I have been in this factory since 1978. I started working as a young engineer my job was to supervise the machines when they were preparing to work. I was the chairman of production and also the director investments for this factory and now I am the director of this organization. I have a master's degree machinery so I am a lecturer of machinery in the faculty of electronics and techniques. We have worked in some projects that are more scientific, that could be applied to Kosovo. In 1986 I was on a specialization course in Switzerland, but I also worked in a firm at the same time. I had some offers to stay there and work for them but I refused. Financially I would have been able to achieve more there, but I wanted to stay here and give my contribution to this country.

Note: World Investment News Ltd cannot be held responsible for the content of unedited transcriptions.

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World INvestment NEws, 2002.
This is the electronic edition of the special country report on Kosovo published in Far Eastern Economic REVIEW. September, 2002 Issue. Developed by AgenciaE.Tv