Could you brief us about the historical presence of Siemens in Yugoslavia?
Siemens has been acting here as a company for more than 100 years. There were some breaks - during The First World War, or The Second World War - but almost uninterrupted. After recalling the sanctions the Siemens founded the Siemens incorporated (Siemens inc.). I was in that time their representative in Moscow. I came back to Belgrade and we started the business. In fact, we have started the business six, or nine months before the beginning of the sanctions and the wars. It was difficult. But we really started to do business after the democratic revolution of October the 5th.
What are the main goals of Siemens here and its strategic trends?
Traditionally, we have four or five priority activities of Siemens here: the first one is always communications, then energy fields, radios (tracking in general) and medical equipment. Of course, we deal with personal computers and everything in this field. We are specialized in industry: automatic equipment in industry, electronic components… everything that goes with electricity.
Is Siemens operating here by its own or through joint ventures with local firms?
Our strategy is to develop very strongly our own company and achieve it with partners. That is how we are having Siemens in all Serbia. Wherever Siemens is holding its companies, there are joint ventures. For now, the only formal joint venture that has been presented to us was the factory of telecommunications equipment factory in Zemun, with 200 workers. We have cooperation with MINEL, from Belgrade, Signal rays, from Belgrade too, MIN (machinery industry), from Nis and the other companies. We have around 80 partner companies in Serbia. Those are our distributors, dealers, service companies, etc…
Speaking of numbers, could you tell us the financial results of the company in 2001, in terms of revenues and profits?
This company is generating about 50 million euros. Most of the business is conducted through the European Community tenders. The companies like ours have the best chances to make a business through big tenders for very small products. Like a tender for buying spare parts. It is so because of the very strong competition from the countries like Germany, Austria, Switzerland…We are making business with our mother company, Siemens in Germany. Then, with Siemens Austria and all the other Siemens companies in the world.
Our business philosophy is to have partners not just for delivering spare parts to companies in Germany or Austria, but to do local business as well. Siemens is a global company. But we understand that globalization includes also a parallel process of localization. As a company, we came here and created works for the Serbian people.
How would you define Siemens's contribution to the local economy?
Investing in a country means that there is a political stability in that country. Serbia is still not stable because the Kosovo and Montenegro issues are still unsolved. But, we have our branches also in Montenegro and in Kosovo, which means that we are going a little bit in advance, trying to make business in that regions too. The investment means the stability and legislation of the new adopted laws. It is a process that has started already. Maybe after this it will be possible to work in these surroundings.
So, according to Siemens's representatives it is not the time to make big investments. But maybe the time to take positions?
We invested in our venture more than 25 million DM. It is an investment in a not so big business. We have invested and now all depends from what will happen in next 10 months. Or I don't know, maybe 10 years. As a matter of fact, we intend to invest more than 50 millions DM this year. If you visit us in the August or the September we can tell you exactly what has to be done in this year. But Siemens is a special company. It is a very long-term orientated company. If you look in the past, for more than a hundred years ago, you'll see that we have a base to establish our presence for another hundred years in the future. This is a very long-term orientation. Our partners are the biggest infrastructure companies in the country - The Post, telephone and telegraph communications company (PTT), Serbian Government, Serbian Rails Company and the Clinic medical center of Serbia. Our intention is to organize the business on local bases with this people and to initialize it here. The question of investments is very sensitive. A lot of money in the form of investment campaigns will come to Serbia. The majority of the companies that will invest in business in Serbia will make a deal or two and will disappear. That is not our intention. Our grandparents could find this company here and our children will find Siemens here, too.
What about the position that Siemens now has in the local market, in comparison to its competitors?
From the very beginning we were on the first position. The second place is not satisfactory choice. If we are, anyhow, compared with other electrical companies that are now present in Serbia, it will become obvious that we are the best.
From all the business Siemens is occupied in now, which one is the most promising?
The electrical market services. In Serbia the market is holding 5 billion dollars. In Serbia the small and specialized companies can be found in all branches of the business. They are very strong because they are dealing according to the standards imposed by the European Community. They can break through. Telecom and Rails have very big quotations. We have organized a surveillance of the rails in the fifty kilometers area from the big cities, for tree weeks. On the bases of that surveillance we purchased the spare parts from the Germany.
| The standards used in the field of electrical equipment maybe very promising in ten years from now. Compared to the other Europeans market, now or in the near future, from three to five years, the Serbian market is small. There is a lack of the investment and there is no free money in the market or in the banks.
You are dealing mainly with other companies. But in which way do you meet the demands of the private consumers?
This is a special field in the Siemens business. That part of the business we leave it to our partners, small companies who run businesses on their own. This is a specific area because our population is not so rich to buy, for example, a Siemens washing machine or some other product. We are very expensive concerning that kind of products, comparing to the Italian house appliances and machines, or products from the countries where the small salaries are included in the costs. It is very hard to be competitive to them. But you can find some Siemens washing machines 50, or maybe 40 years old, still working. That is a proof that we are good. The bad side of our products quality is that the there is no need to by spare parts for those machines.
It has become a tradition for big multinationals to have special budgets for social issues in the communities where they are based, they try to be comitted to the countries they are in. Does Siemens have a similar budget?
Among our activities is supporting of cultural and hymanitarian organizations like the National theathre I have already mentioned, Kolarac's University or the Children's Clinic. For that we have a budget of nearly one million DM per a year. We try to incorporate the people in our company. It is very important. We are trying to make our people not feeling only as workers, but as the people who are acting in the behalf of the Siemens and, also, as the citizens of this country or the city they are in. We want them to live here and to support all the surrounding. The name of the Siemens is not developed only in the field of business and that's why people have the different feelings when our company is mentioned. Our company is involved in the culture and workers' supporting. We are trying to incorporate us into this country and it is costing a lot of money and taking a lot of time. With such a business philosophy it is very difficult to always be competitive. Opposed to the companies I have mentioned, a lot of companies that will have no problem to come to Serbia with 10 million DM, do business once or twice and than leave.
You have worked for Siemens in different countries. With your experience, do you think there is a different business culture here, compared to Russia or Germany, for example?
I was working in Germanu, Russia and Ughanda. Business is the same all around the world. But Serbia nowdays is an exception from that rule. It is the concequence of the sanctions and the wars. If you intend to do business you have to get used to many things that usually have no place there. And you must have a lot of patience. Negotiation may be done once, twice, tree times and then, after ten days once again, before you got a deal. Lots of businessmen here are very good for the jobs they are doing, but it was a 10 years break. A lot of people who stayed here now find this business surrounding quite different and must get used to it. It is very hard, but like all people from here, they can make it in any kind of the surrounding.
Do you think that Serbia has a tendency to become the center of the region, in two, or tree years?
Serbia is in the centre of the Balkans. Not only considering it's geographical position but it's infrastructure, too. Rails, roads… everything is going through Serbia. Serbia was once the most developed country in this region. It will be again, although it is difficult to say when it will happen. Serbia is very different from the other countries that went through the transition process. In the time before the transition of the Eastern Europe countries, Serbia was an open country. The relationships and travelling frequency to the Western countries were on a very high level. Now we must move in order to get there once again and for this investing is needed. There is a big difference between the statements of the western politicians, especially some Ministers, about supporting young democrats in Serbia and the reality. The real life here needs more time and more money to survive. And the business people I have mentioned need other things: security, stability and so on. If you read the news or watch the television you'll get an impression that the things are moving very fast, but it is not our reality. For making a business worth 10 million DM you need a guarantee and everything else. Who will give you such a guarantee? Will you rely on the negotiations with the International Monetary Fund or you will find that money on your own and solve the problem? Your impressions doesn't match the real life. As the first, we need a political stability. Then everything else.
What recommendations do you have for our readers who are potential investors and might be interested in Serbia?
Serbia has a good future. Especially regarding it's economic environment, the countries that surround it in the Balkans. Serbia will play a key role for the further development of this market. There are a lot of interesting and very prospecting fields to invest in, specially for the companies from Germany, the France or the United Kingdom. If they come back here it may be necessary to invest money. But problems are not always solved with money. It is far more important to find a good program, like, for example, to explore exporting healthy food from here or something like that. Those programs must be long-term oriented.
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