Business Dialogue - CorD Magazine No. 155

SEPTEMBER BUSINESS LEADERS’ MEETING POINT

ČEDOMIR JANJIĆ, Mayor Of Zrenjanin

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ADAM TAN, HNA Group CEO

City Of The 21st Century

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Have You Ever Heard Of HNA Group?

Here’s Why You Will!

SANDRA RAPO, Marketing Expert For The Development And Promotion Of Brands

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Spending On Marketing – Investment Or Expense?

LOCAL NEWS

ECONOMY “I expect the country’s economic growth to slow to 2.5% in 2017, from 2.7% last year, due to the negative impact of drought. All other economic indicators are very good, with exports rising between 10 and 12%, and the manufacturing industry expanding by 6%.” – Serbian Prime Minister ANA BRNABIĆ

GAZPROM NELT

Status Of Authorised Economic Operator Awarded To Nelt The Customs Administration – Customs Offices of Belgrade issued a decision where the company Nelt is awarded the globally recognised certificate AEO for customs simplification/security and safety (AEO F).

That way Nelt is recognised as a reliable partner, since, following a studious checking, it was determined that Nelt fulfils all the specific criteria of the World Customs Organisation standards and equivalent local standards in the area of supply chain safety.

“We are glad that the Customs Administration recognised and certified Nelt’s business excellence we are focusing on daily. At Nelt we invest energy every day in raising standards in order to ensure Nelt’s position of a reliable partner both in local and global markets”, says Ivan Milicevic, LSP operations and development manager.

Some of the main benefits, which this system brings, are, above all, reflected in partner cooperation with the Customs Administration. Those benefits lead to simpler approval process and simplified customs proceedings, reduced number of controls and data entry, priority informing, etc. By obtaining this certificate, Nelt will provide its clients with quicker and cheaper transport of goods, thereby raising the level of its services and additionally improving the existing range of integrated logistics services.

OTP BANK

LEONI

OTP Banka Buys Vojvođanska Banka

Third Plant In Serbia Opened

Representatives of the National Bank of Greece (NBG) and OTP Banka Srbija (OBSr) signed an agreement on the sale of Vojvođanska Banka and NBG Leasing, as well as other NBG Group assets in Serbia. The agreed amount for the share capital of Vojvođanska Banka and NBG Leasing is €125 million. As a result of this takeover, OTP Banka Srbija’s market share will increase to 5.7%, making it the seventh largest bank on the Serbian market.

“In recent years, OTP Banka Srbija has achieved continuous growth, and our expectations are that this positive trend will continue, supported by this takeover,” said Deputy CEO of OTP Bank Hungary and Chairman of the Management Board of OTP Banka Srbija, László Wolf.

“This takeover further reinforces OTP Bank’s presence in Serbia and enables the long-term profitability of the bank’s operations,” added OTP Banka Srbija CEO Predrag Mihajlović. Vojvođanska Banka’s total assets in 2016 amounted to €1.17 billion, with a total loan balance of €810 million. Over the past two years, the bank achieved returns on equity (ROE) of 1.9% and 2.3%.

Vojvođanska Banka currently operates through a network of 105 branches, employing a staff of 1,405 workers and with 138 ATM cash machines.

TURKISH AIRLINES

PHUKET: 300th Flight Destination Of Turkish Airlines Flying to more countries and international destinations than any other airline in the world, Turkish Airlines has started to operate flights to Phuket, one of the most prominent tourist destinations in the world. Flights from Belgrade to Phuket with very short connection time in Istanbul operates four times per week on Mondays, Thursdays, Saturdays and Sundays.

Deputy Chairman and CEO of Turkish Airlines Mr. Bilal Eksi, commented at the launch ceremony; “Turkish Airlines is excited to be bringing more value and connectivity to its passengers through its ever expanding network. As an award-winning airline that invites people to explore the beauties of our world, it was a natural choice for us to decide on Phuket as our next destination.”

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Company Leoni, Europe’s leading manufacturer of wires, cables and cable systems, has opened its third plant in Serbia, in Niš, launching the first phase of production, with those in attendance at the opening including Serbian President Aleksandar Vučić and Leoni Executive Vice President Ralf Maus. This investment is worth 22 million euros and will employ 2,200 people. The factory, which covers an area of 22,000 square metres, will produce cable sets for BMW vehicles.

Leoni has operated in Serbia since 2009, when it first established its plant in Prokuplje for the production of wiring systems for BMW. Later, in 2014, it established its second facility in Serbia, in Malosiste,

Doljevac Municipality, for the production of automotive cables for Land Rover and Jaguar vehicles.

Leoni’s total investments in Serbia to date are worth €75 million. With the inclusion of the new Niš plant, Leoni will soon employ almost 8,000 people, becoming the biggest employer in Serbia’s production sector. The opening event was also attended by Leoni Wiring Systems Southeast d.o.o. Director Clemens Sachs, Serbian Economy Minister Goran Knežević, Deputy German Ambassador Alexander Jung, Niš Mayor Darko Bulatović and other senior officials.

10 TIPS

For Returning To Work After A Summer Break Everyone looks forward to the summer holidays and to doing nothing. Unfortunately, going back to work afterwards can make you feel like you need another break a.s.a.p.

Here are 10 tips for the first week after returning to work.

1. Make a running list of your projects before you leave.

2. Delegate the things that can’t wait until you return.

3. Set up an out-of-office email

and voicemail message.

4. Ask your manager to email you with an update the day before you return.

5. Clean up before you leave.

6. Give yourself a buffer day.

7. Check your work calendar.

8. Clean up your desk upon return.

9. Stay in stealth mode.

10. Consider postponing that boot camp or liquids-only cleanse.

SOLUTIONS “All ministries in charge of local governments will do everything they can to find optimal solutions and prevent abuse, in order to avoid undermining the basic functioning of the state and society.” – Serbian State Administration and Local

Self-Government Minister BRANKO RUŽIĆ MEDIGROUP

Extending Operations At The National Level

MediGroup, the largest private healthcare system in Serbia and the region, has signed a contract to take over the Dr Cvjetković Health Centre, the oldest and most respected private health centre in Novi Sad and Vojvodina. MediGroup has thus received its first member beyond Belgrade, with which it has taken its first significant step towards expansion at the national level.

“With a desire to make our services accessible to the highest possible number of citizens, we are working on opening new MediGroup medical institutions in

numerous cities throughout our country.

We want, with the quality of our human resources, to improve the level of healthcare available to the people of Novi Sad,” said MediGroup system CEO Dejan Pešić.

The Dr Cvjetković MediGroup He­ alth Centre is the biggest health centre in Novi Sad, with a staff of over 100 doctors. It has been providing services in various branches of medicine for two decades.

“We are proud that the quality of our institution is recognised by the largest private healthcare system in the country and the region,” noted Dr Milan Cvjetković.

In addition to the new location in Novi Sad, MediGroup services are available at another 11 locations in Belgrade.

It has a staff of nearly 700 permanent employees and covers more than 40 medical areas within the framework of its health facilities.

AGRICULTURE

Turkey And Serbia Sign Trade Agreement Ahmet Eşref Fakıbaba, Turkey’s minister of food, agriculture and livestock, and Branislav Nedimović, Serbia’s minister of agriculture, signed a trade agreement on agriculture on 22nd August, represent-

Ahmet Eşref Fakıbaba (left) and Branislav Nedimovic

ing the first such agreement since 2011. The agreement aims to boost exports of sunflower oil, fruits and vegetables between the two countries, increasing bilateral trade to $1 billion.

“We give great importance to improving our relations in every

area, especially in the economy,” said Minister Fakıbaba, asking Turkish businessmen to increase their investment in Serbia. “Serbia is very important for us; Serbia is our great friend. We need to exert a little more effort to reach $1 billion in trade volume—our common goal,” he said.

The Turkish minister said that if Belgrade allowed Ankara to have a free trade zone it could enter the Russian and European Union markets, with which it has free trade agreements. In return, he added, Turkey could open its market up to Serbia.

Nedimović said they had focused on three main issues: updating the Free Trade Agreement, creating new quotas for various agricultural products and investment in the livestock and fruit sectors. There are 75 Turkish private investments in Serbia’s textiles, food and construction sectors, with a total value of around $110 million.

Placements & postings appointments@aim.rs

▪ H.E. SYED ADIL GILANI, NEW AMBASSADOR OF ISLAMIC REPUBLIC OF PAKISTAN TO SERBIA

Ambassador Syed Adil Gilani (73) graduated from Karachi’s Engineering College. A civil engineer by profession, he has amassed 51 years of experience in Pakistan and Nigeria in the Public/Private Sector Government of Sindh, 1966-1970, the North Estate of Nigeria, 1970-1975, Gammon Pakistan Ltd., 19791989, Karachi Port Trust Government of Pakistan, 1989-2000, and, as of 2000, Project Management and Advisory Services. A member as a Port Consultant of the Sub-Working Group on Ports & Shipping of the Government of Pakistan for the 2005-2010 Five-Year Plan, Mr Gilani is a founding member of Transparency International Pakistan and served as the Prime Minister’s Inspection Commission Consultant from 2015 – 2017.

▪ H.E. VALERY BRILEV,

NEW AMBASSADOR OF THE REPUBLIC OF BELARUS TO SERBIA

H.E. Valery Brilev , 58, holds diplomas from the Belarusian Polytechnic Institute, Faculty of Architecture, and of the Minsk State Pedagogical Institute of Foreign Languages.

From 1981 to 1990 he worked as an architect at the design institute in Minsk, and from 1990 to 1992 as a lecturer at the Soviet Culture Centre in Belgrade. From 1992-1994 he was employed at the General Secretariat of the Ministry of Foreign Affairs of the Republic of Belarus, then as second secretary of the department for bilateral cooperation of the MFA RB. From 1995 to 1996 he acted as the second and then first secretary of the Embassy of Belarus in Bulgaria, and from 1996 to 1998 as the first secretary, advisor of the Belarusian Embassy in the Federal Republic of Yugoslavia (FRY) then Chargé d’Affaires of the Republic of Belarus in the FRY. From 1998 to 2001 Mr. Brilev was ambassador to the FRY, followed by a year as head of the Department for bilateral cooperation with CIS member states.

From 2002 to 2006 he was the first head of the department for the CIS states at the MFA RB then head of the department for bilateral relations with CIS countries.

From 2006 to 2010 he was Ambassador of Belarus to Kyrgyzstan, and then from 2010 to 2013 ambassador to Kazakhstan.

From 2013 to 2017, Brilev served as foreign policy adviser to the President of the Republic of Belarus, and since April 2017 has been Ambassador of Belarus and on a non-resident basis ambassador to Macedonia and Montenegro.

Mr. Brilev speaks Serbian and English. He is married and has a daughter.

▪ VLADIMIR ILIĆ, NEW MANAGING DIRECTOR OF TIGAR A.D.

At the latest session of the supervisory board of Tigar a.d. in Pirot, lawyer Vladimir Ilić was named as the new managing director of the company.

His career until now has encompassed the position of State Secretary at the Ministry of Labour, Employment, Veterans and Social Affairs, three years as director of the Belgrade City Centre for Social Affairs and ten years experience as a lawyer at the same centre’s Lazarevac department.

He has taken an active role in working groups at the Ministry on the subject of social protection and improving legislation in this field, according to a statement released by Tigar.

His predecessor Branislav Čurić will remain part of the company management team.

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CORPORATE ČEDOMIR JANJIĆ, MAYOR OF ZRENJANIN

City Of The 21st Century “Information that Tönnies is coming to Zrenjanin is good news, particularly given that this is an investment in agriculture,” says Zrenjanin Mayor Čedomir Janjić, speaking for CorD

success and standard of its residents.

According to your estimates, where is Zrenjanin today compared to those years, which many people have a tendency to glorify?

- Zrenjanin was known as a great “food factory”, but its production capacities ■ According to information that can were designed to cater for the market be treated as official, German comof the former state, with over 20 million pany Tönnies is set to open a pig farm inhabitants. The collapse of Yugoslavia inevitably imposed major economic in the vicinity of Zrenjanin and is investing more than 20 million euros transformations and, unfortunately, in that job. Do you have more precise many unsuccessful privatisations at the information of when implementation beginning of this century, which led to can be expected, and what does this the closures of numerous production investment mean for your city? facilities in our city. It was necessary to - I don’t have precise information resort to a new way of thinking, so Zrenjanin was among the first cities in Serbia about when that job will start, but I know to launch projects for opening new, fully equipped industrial zones and One of the priorities of the attracting investors, along with varlocal administration I head is to ious benefits and the efficient work of the administration. reduce the number of We are glad that the investors unemployed citizens already operating in our zones are satisfied and that some of them are expanding their capacities, as is the that Tönnies will invest 25 million euros case with Germany’s Draexlmaier and and up to 70 workers will be employed on Italian company Fulgar, but also domesthat farm, and that the farm will work in tic company Gomeks and UM-ING. It is cooperation with private individuals from difficult to compare the position of the the surrounding area. That’s good news economy of Zrenjanin today to the way for Zrenjanin, because it’s an investment it once was, but the fact remains that in agriculture and I’m sure there will be the city is currently one of the most ateven more such investments, and I know tractive centres for investing in Serbia, there is existing interest among domestic farmers and companies to invest in which is also recognised internationally, that branch of the economy. and that our activities are directed towards it being a good place to live, with ■ In the former Yugoslavia, Zrenjanin all of the amenities demanded by life in was ranked at the very top in terms of the 21st century.“ ■ struction of the sewage system in several occupied areas, and launched it in others. Among other things, we have opened four sports hall/gymnasiums in four populated areas, and with all this in mind I can say that I am satisfied.

W

hen Čedomir Janjić, a graduate economist, became the mayor of Zrenjanin, a city that represents the centre of the economy, culture and sport of the Banat region, he said that he intends to turn this place into a construction site. In this interview for CorD, he says that he thinks this promise has been fulfilled and that this city, which in terms of administrative territory is the largest city in Vojvodina and the second largest in Serbia, is now in a far better economic position than it was three years ago.

- When it comes to attracting investments and employment, I think we’ve made great progress. We’ve sold thirteen plots in the industrial zones, several production halls have been created in the industrial zones and we are in negotiations with several other companies, primarily foreign. All of this, of course, results in a reduction in the number of unemployed citizens. Moreover, it should be noted that in the previous period we resurfaced 80 kilometres of roadways and 13 kilometres of cycle lanes, while we continued con32 |

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REGIONAL NEWS

POWDER KEG “It seems that the West still closes its eyes to the fact that that the Western Balkans is still a powder keg. By insisting on the interest of capital, Europe, unfortunately, often neglects the ethical values in the core of the European idea.” – MILAN KUČAN, former Slovenian president

MONTENEGRO

ALBANIA

Jugopetrol Net Profit Rises 15.2% Montenegrin oil products distributor Jugopetrol has said its net profit rose 15.2% on the year to €2.6 million in the first half of 2017.

The revenue of the company went down to €58.1 million from €46.3 million, while operating costs were up 26.3% to €55.3 million, Jugopetrol said in a financial statement filed with the Montenegro Stock Exchange.

Operating profit rose 12% to €2.8 million euro in the first half of 2017, Jugopetrol said.

Kotor-based Jugopetrol has been part of Greece’s Hellenic Petroleum Group since 2002. The company is active in the retail and distribution of petroleum products and the wholesale of petroleum products through the operation of a storage facility at the Adriatic port of Bar and filling terminals at the airports of Tivat and Podgorica.

SOUTH-EASTERN EUROPE

Further Upgrade Of Economy The outlook for South-Eastern Europe’s economy was upgraded for a fourth consecutive month; the 2017 GDP growth forecast for the region was revised from 3.3% last month to 3.5%. The upgrade was largely the result of panelists’ more positive assessment of the Turkish economy following its strong Q1 performance and Greece’s brightening economic panorama. FocusEconomics panelists kept their projections for next year unchanged at 3.1%.

Elsewhere in the region, the outlook for 2017 was also upgraded in the Bulgarian and Macedonian economies. Conversely, only Serbia saw a slight downgrade to its economic forecasts, while the forecasts for the remaining seven economies in the region were left unchanged. Romania and Turkey are expected to be the fastest-growing economies in 2017 with expansions of 4.6% and 3.9%, respectively. On the other end of the spectrum, major-player Greece is expected to be the region’s laggard, growing 1.0%.

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TAP To Start Adriatic Offshore Section The Trans Adriatic Pipeline (TAP) consortium has already completed half of its Albania onshore route works and is on track to start its offshore section across the Adriatic.

The consortium of energy majors building the pipeline plans to invest €400 million in Albania this year and a similar amount in 2018, local media cited TAP’s country manager. In all the project is projected

to pump €1.5 billion into the local economy.

The pipeline is one of three that together will bring gas from Azerbaijan’s Caspian Sea fields across Georgia, Turkey, Greece, and Albania to Italy in a major component of the EU-backed Southern Gas Corridor project. Ratings firms predict TAP will help stabilize the economy of Albania, one of Europe’s poorest countries. Investments into the pipeline and other large energy projects should contribute to keeping economic growth at around 3.8 percent from 2017 to 2020, Standard & Poor’s said recently, according to Azernews.

BULGARIA

Tender To Sell Belene Nuclear Project Bulgaria plans to launch a tender to sell its abandoned 2,000 megawatt nuclear power project Belene in early 2018..

The previous government cancelled the Belene project in 2012 after failing to find foreign investors and under pressure from Brussels and Washington to limit its energy dependence on Russia.

The current government renewed the search for private investors to build the plant on the Danube River after an arbitration court ruled last June Bulgaria had to pay more than € 600 million in compensation to Russian state nuclear company Rosatom when it cancelled the project. Bulgaria has already

spent over €1.53 billion on the project. Last year the government said that Industrial and Commercial Bank of China (ICBC) was ready to finance the project. China National Nuclear Corporation (CNNC) had also expressed an interest in investing in it.

Some economic analysts say Bulgaria does not need Belene, that its cost greatly exceeds the benefits and that such large-scale projects open the potential for corruption. Prosecutors have already charged three former energy ministers over mismanagement linked to the project.

CROATIA

EBRD Urge To Support Growth Of Small Firms

The Top 10 companies in Croatia based on revenue generated have been revealed with oil giants INA again topping the list.

INA, who has been the number one firm based on revenue in Croatia for the last 10 years in a row, generated 15.1 billion kunas (€2bln) in revenue last year Second on the list, which was compiled from data from financial institute FINA, was national electricity company Hrvatska Elektroprivreda (HEP) with €1.2 8.bln in revenue. Next on the list were distribution services operator HEP, telecom firm Hrvatski Telecom, pharmaceutical company Pliva and oil company Petrol. Supermarket chains Lidl, with revenues of €540.4mln last year were in 7th spot, up

from 12th position the year prior. Fellow supermarket chains Plodine and Kaufland were next on the list with revenues just under €540mln. City enterprise Zagrebački holding, which operates a number of different businesses in the capital including trams, parking, markets and waste collection, rounded out the Top 10 with around €460 generated last year.

Top 10 Companies in Croatia based on revenue: 1. INA 2. Hrvatska Elektroprivreda (HEP) 3. HEP 4. Hrvatski Telecom 5. Pliva 6. Petrol 7. Lidl 8. Plodine 9. Kaufland 10. Zagrebački holding Source: croatiaweek

STABILITY “I am not in favor of the Western Balkan countries joining the EU soon. In this respect, the stability of the composition of the European Union is a prerequisite for the Balkans not being at war again.” - JEAN-CLAUDE JUNCKER, European Commission President ROMANIA

FYR MACEDONIA

IKEA invests €100,000 In New Showroom

Wineries Face Financial Problems

Swedish retailer IKEA has invested €100,000 in a new showroom at its store in Baneasa, Northern Bucharest.

The space covers 1,500 sqm and includes seven new models of furnished rooms, reports local Wall-street.ro.

The Swedish retailer also launched a new catalogue yesterday, whose central piece is the living room. According to IKEA representatives, 85% of the Romanians use the living room as a socializing space. Moreover, eight out of ten Romanians use the living room as a sleeping room.

Macedoni’s wineries have complained about problems with financial inflows and finding markets for their goods, but Minister Ljupco Nikolovski hopes that grape prices will reach 2016 levels.

“It is possible to see higher prices in better quality grapes, but unlikely above the 2016 levels. Wineries decide on what the prices will be, and we expect to see prices similar to last year”, said Nikola Derebanov from the Stobi winery Heavy frosts during the winter have reduced the expected harvest, and Nikolovski said that this will mean that all produced grapes will be bought by the wineries. “In the past 11 years the previous Government led a populist and non-systematic policy in vine growing which led to the piling on of problems. We will try to resolve all situations that develop and are brought before us by the vineyards and the wineries” said Minister Nikolovski.

HUNGARY

10 Things No One Will Tell You About Starting A Business

10 THINGS

No One Will Tell You About Starting a Business These days it seems everyone is calling themselves an “entrepreneur.” There’s a lot of talk about leaving your job, following your dreams, making money while you sleep, and living with passion.

Each of those things is fantastic. But, there are a lot of things aspiring-entrepreneurs aren’t hearing. There are things no one will tell you about starting a business, so it’s time somebody tells you.

Potpis: Tesla CEO Elon Musk

The government is stepping up its efforts to make the country more attractive in the regional competition for a new Tesla electric car factory.

Owner Elon Musk is expected to announce by the end of this year the location of its first European factory, according to online news portal index.hu.

Hungarian company Autóipari Próbapálya Zala Kft. is developing a test track suitable for testing self-driving cars at Zalaegerszeg (230 km southwest of Budapest). All Tesla vehicles, including the new Model 3, have the hardware needed for full

self-driving capability. CEO Elon Musk announced last year a new “gigafactory” battery production plant and automated manufacturing research center.

According to index.hu, the government is preparing the ground for winning the new Tesla investment by making a HUF 15 billion (€ 49,4 million) capital increase, to complete the construction of in the first half of 2018. The government is prepared to invest as much as total of HUF 42bln (€161,4mln) in the new facility Index.hu added that Tesla intends to create a gigafactory on the European continent similar to its facility in Nevada, the total value of which may reportedly reach approximately €5 bln.

BOSNIA AND HERZEGOVINA

1. You’re good enough to start, but not good enough to win.

2. You have to make yourself a priority.

3. You have to be your own first customer.

4. You have to be your own biggest fan.

5. It will take more work than you realize.

6. There will be things that you have to give up if you want to win.

7. Your first idea probably won’t be your best idea.

8. Your product isn’t for everybody, and not everyone is your customer.

9. You have to guard your calendar with aggressive intensity.

10. You will have to leave people behind

Digital Business Center Opened In Sarajevo Sarajevo joined the list of world metropolises with a concept called Digital Business Space (DBS), which offers businesspeople exclusive business space located in the very city center. The space is fully equipped with all technologies necessary for connecting with other digital businesspeople, offering a flexible and dynamic space. DBS offers a relaxing business lounge, a virtual office, meeting rooms, renting of work space and more.

The other prats of DBS are a digital showcase and a center for the advancement of knowledge. The

digital showcase will present the newest technologies, offering knowledge and inspiration as to use today’s digital tools. The center for the advancement of knowledge will offer business training to small and medium enterprises according to the Swedish model.

The Swedish-Bosnian firm SEEBA is behind the Digital Business Space.

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FINANCE

ASSET MANAGEMENT

Digitalization, But Quickly!

While asset managers invest ever greater amounts of their client monies in the financial markets, the threats to their business models are steadily increasing. The answer to these mounting threats can only be digitalization

T

he changes in asset management are not only fundamental, they are life threatening: the latest wave of mergers and takeovers should set the alarm bells ringing for an industry which already sees itself under threat. The apparent relentless flow of assets into passive investment strategies –in the first half of the year it reached a further $500 billion—is the epicenter of this phenomena.

ing their own initiative, cooperation or outsourcing.

3. Transforming Data Into Information Production processes and their accompanying communication alone generate huge amounts of data for managers. The problem though is many asset managers don’t know how to transform this data into information that can be used to simplify decisions and improve results.

Data analysis and interpretation can provide active managers with decisive advantages for DEARTH OF CLIENT CONFIDENCE their investment processes, as long as they are For the majority of asset managers this means supported by digital technologies. lower growth in managed assets, shrinking margins 4. Innovation Means Experimentation due to pressure from administrative costs, and also Transforming the business model requires the implies waning client confidence in their ability to creation of a systematic innovation management. deliver satisfactory performance.

Knowledge of the innovation method Design Asset managers also face a bearish investment Thinking becomes indispensable since clients environment, with low and negative interand their needs become the middle point. est rates, and a phase of the technological Innovation also requires client input, and The advisor to concerns like revolution which given the problems they so testing the effect of digital changes makes Google, General Electric and confront, threatens to pass them by. If there market experiment essential. This shouldn’t Toyota has identified five trading is one common thread running through the be too difficult for asset managers since the entire asset management sector, then it is areas for which a successful digital content of services is always focused on fully that the digital competence of asset mandigitalized goods: namely exchange-listed strategy needs to be developed: agers is becoming increasingly important. securities. customers, competition and This requires a transformation in existing 5. Standing Still Means Ignoring User cooperation, data, innovation business models. Or, to quote digital guru David Promises The digital transformation isn’t the final step, Rogers: «You need to rethink your business.» and usage The advisor to concerns like Google, Genbut rather leads to ongoing and rapid change. eral Electric and Toyota has identified five trading For an asset manager this means they cannot rest manager switch since they know another administrator offers better performance and service at areas for which a successful digital strategy needs on a single solution. They have to constantly test a comparable or even lower cost. to be developed: customers, competition and and if necessary undertake further developments.

Asset managers are thus forced to offer market A key condition is not only the early recognition cooperation, data, innovation and usage. leading digital services. If they are unable to do so of digital trends. The asset manager must mainJan Spelsiek, head of digitalization at Allianz tain close client contact and anticipate changes themselves, then they will have to buy in the services Global Investors, has defined these trading areas in their business needs, monitor the competitor or develop them with the help of partners. Asset for Asset Managers. and cooperation environment, as well as regulamanagers will thus have to identify which services 1. Individualisation and Personalization tory changes. ■ they’ll need to maintain their competitiveness: usThe public funds business is an anonymous

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mass market: «One size fits all» function with standardised investment products has long worked well. It no longer however fits the digital age: customers want individually tailored investment solutions, personal service and open communication channels to their advisors.

What Asset Managers have long been delivering to institutional clients, they will now need to offer to private investors. Still, there is also plenty of digital development potential in the institutional sector, for example in the communication and service areas.

2. Only the Best is Good Enough Digitalization has hugely increased the transparency of asset manager offers and services and led on the other hand to more competition in the quality of services. Clients are no longer scared off by the transaction costs involved in an asset

WORLD NEWS

DISCRIMINATION “I don’t like the idea that there would be some kind of second category in Europe. We’ll pursue our common intention to put an end to this discriminatory way of providing people with food products and other goods of lesser quality.” - JEAN-CLAUDE JUNCKER, European Commission President

NETHERLANDS

TURKEY

Abellio Have Won A Major Franchises In Britain

The Anadolu Group Openes Two New Production Facilities

Dutch state-owned railway firm NS and its subsidiary Abellio have won a major contract to operate rail franchises between London and Birmingham and Liverpool from 17 December. Dutch Rail expects its annual revenue to expand by €525m, pushing up annual group turnover up by 7. The franchise, which runs through 2026, has gone to West Midlands Trains, a consortium which also includes Japanese companies Mitsui and the East Japan Railway Company. Abellio has a 70% share-

One of the factories will make production for Coca-Cola İçecek, a majority stake of which is owned by the Anadolu Group. The second facility is owned by Anadolu Etap, the group’s fruit company, with its Brazilian partner Cutrale and Turkey’s Özgörkey Holding.

“The Anadolu Group will make an important contribution to the local and national economy by boosting production and exports through these investments,” President Recep Tayyip Erdoğan said in a speech at the opening ceremony.

holding in the concession. The companies are committed to investing nearly £1bn in the venture which includes new rolling stock capable of handling 85,000 more passengers between London and Birmingham during rush hour. NS is expected to earn more from its non-Dutch rail operations than it does from those in the Netherlands by 2021. Abellio already runs rail services in Scotland plus Merseyrail and Northern Rail.

FINLAND

Basware Partners With Nordea Finnish e-invoicing and purchaseto-pay solutions provider Basware has entered into a strategic partnership with Nordea Bank, the largest corporate bank in the Nordics, to deliver a dynamic discounting solution in the Nordic countries.

The agreement sees Basware and Nordea jointly offering a dynamic discounting solution to Nordea’s corporate customers. Meanwhile, Basware will deliver the solution integrated into the customers’ Purchase-to-Pay (P2P) or customer’s Enterprise Resource Planning (ERP) solutions.

According to Basware CEO Vesa Tykkyläinen, the partnership enables the Finnish company to further establish its financing services offering to businesses in the Nordic region.

GERMANY

Revised Joint Growth Outlook A group of leading German economic research institutes presented last month their latest joint growth outlook for Europe’s largest economy, raising their previous forecasts for the next two years.

The institutes’ spring outlook expects Germany’s gross domestic product (GDP) to rise by 1.5 percent in 2017, up from their previous prediction of 1.4 percent, while the economy is forecast to expand by 1.8 percent in 2018, compared with 1.6-percent growth penciled into last autumn’s outlook.

This is not to say that the economists involved in the forecast turn a blind eye to current uncertainties, mentioning that the conditions for steady growth could be impacted by UKEU negotiations on Britain’s exit from the European Union.

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Anadolu Group had invested $1.4 billion in the country over the last decade, along with its global partners.

“We are here opening our 10th Coca-Cola İçecek factory, constituting the last chain of the $1 billion investment plan of this unit in the last 10 years. Coca-Cola İçecek has become the largest bottlers within the Coca-Cola universe over the past 20 years,” Anadolu Group Chair Tuncay Özilhan said.

GREECE

Attica Group Acquires Majority Stake in Hellenic Seaways Attica Holdings S.A. (Attica Group) announced an agreement in principle, with Piraeus Bank and other minority shareholders for the acquisition of 39,039,833 shares in total of Hellenic Seaways Maritime (HSW) representing 50.30% of the share capital of HSW. The total consideration for the transaction consists of €30.61 million payable in cash and 24,145,523 new common registered shares of Attica Group, to be issued pursuant to a share capital increase.

Of the above mentioned majority equity stake in HSW, 1,250,000 shares have already been acquired by Attica Group in cash while the remaining 37,789,833 shares will be acquired upon closing of the transaction, which is subject to the approval of the relevant regulatory and other authorities.

UBS Limited acted as financial advisor and Bernitsas Law Firm as legal advisor for Attica Group.

GARBAGE “People in central and eastern countries were tired of being “Europe’s garbage can” - MARIAN JURECKA, Czech Agriculture Minister

SLOVAKIA

CHINA

Vision Of A New Bratislava Centre

Fintech Sector Invests $6.4 Billion

One of the most valued localities of Bratislava – the embankments of the Danube River – has found itself in the spotlight of developers. Following HB Reavis, J&T Real Estate has as well applied for a statute of an important investment for its package of development projects on both sides of the Danube. In this way it is seeking to simplify the approval process and speed up the construction of a €1.2 billion package of development projects. Within it the developer is promising to build among others another phase of Eurovea, New Lido, a pedestrian bridge via the Danube, and new tram tracks.

However during this phase the city council expects more complex information about financing, the preparation process and the construction time.

J&T Real Estate delivered its application for the statute at the Cabinet Office on August 3. It believes that it meets all the criteria for the statute.

To get the statute of an important investment the investor needs to invest at least €100 million or create a minimum of 300 new working positions. Another condition is that the project is in the public interest.

The investor in turn can get a tax holiday, better access to the acquisition of land and faster and simplified approval processes. The state has granted about 25 statutes so far.

Chinese financial technology companies could expand the lendable population from around 200 million creditcard-carrying prime borrowers to around 800 million, according to the latest report of global consulting firm Oliver Wyman.

The report said big-data analysis, the internet of things, and blockchain are the three technologies with the greatest potential, owing to their ground-breaking capabilities to acquire, assemble, analyze, and apply information. Data treatment and information processing are at the heart of decision-making for financial services, especially in China. According to the report, China’s fintech sector has attracted $6.4 billion in investments in 2016, making it the global leader in fintech venture capital activities representing 47 percent of global fintech investments, up from only 7 percent in 2013.

With this major potential for a new wave of technology-driven growth, there is no one-size-fits-all approach that will suit all market players.

The report summarized key success factors: data abundance and application, a large customer base, availability of proprietary and comprehensive products, and strong knowledge of financial services and risk management.

US

Uber Is Thinking About Selling Stock

Uber is considering of selling a large amount of shares for the same or less than its current $68.5bln value for the first time. Their board has voted to move forward with two of the three proposals so far.

Uber is also planning to take the next step on an investment from Japanese internet giant SoftBank, which has long been rumoured to be interested in the firm. There is also a third offer, from a group led by existing investor Shervin Pishevar. He’s offered to buy

shares at current valuation, and specifically wants to buy out 75% of the shares held by another investor, Benchmark Capital, who is suing Uber’s former CEO Travis Kalanick for alleged fraud.

The offers have emerged at a delicate time for Uber, which currently has no chief executive and is dealing with board and investor infighting. Travis Kalanick, Uber’s co-founder and CEO, stepped down in June under pressure from investors. Since then, various factions of investor and board members have all battled to advance their own interests at the company.

According to the New York Times, Uber has around $5 billion in the bank. But the deals could provide some financial security for Uber while its future is unclear.

RUSSIA

Wages, Economy And Social Policy - Main Problems Russians believe that the most serious problems that the country faces now are connected with low salaries and living standards (24%), the state of economy (21%) and the current social policy (18%), a survey conducted by the Russian Public Opinion Research Center (VCIOM) shows.

Low salaries and living standards as a whole have been leading the list of problematic issues for three months in a row, with 24% of Russians naming them. Each fifth respondent (21%) is concerned with the state of economy. Social policy is in top three: 18% in July (it was twice as little, 9%, a year ago),” the report says.

Russians also named the state of health care (17%), unemployment (14%), educational problems (12%) and low pensions (12%), inflation and corruption (each tenth respondent), as well as housing utilities issues (8%) among the current domestic problems.

The nation’s leading polling agency has conducted the poll in 130 communities of 46 Russian regions, having questioned 1,600 people.

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FINANCE

B y V I V I E N N E WA LT, F O R T U N E

Have You Ever Heard Of HNA Group?

Here’s Why You Will!

On a warm summer night in Paris, hundreds of executives, bankers, diplomats, and French officials walk the red carpet snaking up the steps of the Petit Palais museum—a sumptuous Beaux Arts building in the heart of the French capital, with sculptures and paintings set around a manicured garden. Under 200-year-old frescoes, the guests dine on lobster, duck, and white-chocolate mousse, prepared by a top French chef, washed down with grand cru Bordeaux, and topped off with entertainment from the Peking Opera. Three large red letters affixed to the ornate gates offer a clue about who’s throwing the invitation-only affair: HNA

HNA Group, headquartered in Hainan in southern China, still lacks the brand-name status it eagerly seeks. That’s despite the fact that it has plowed tens of billions of dollars into buying up foreign assets since 2015, on every continent—including $5.66 billion in just the past six months, according to the tracking firm Dealogic. By the company’s estimation, its investments in the U.S. alone have reached $35 billion.

Over the past two years, about $1 trillion has flowed out of China, HNA Group CEO Adam Tan as Chinese individuals and como the hundreds of people passpanies, having made fortunes at home and with state-owned banks willing to ing by, the name HNA probably lend, invested elsewhere. Among those means nothing. But to the busicompanies, one of the most aggressive ness world at large, the presence has been HNA. Its dealmaking in some of those three letters is another sign—if ways highlights how a mere handful of any is needed—that a little-known ChiChinese groups have snapped up dozens nese conglomerate with provincial roots of Western assets, especially since the has, in just a few years, transformed into 2008 economic crisis, while at the same a powerful global player with tentacles time leaving unanswered questions over stretching across the planet.

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ownership and transparency.

In the case of HNA, its executives have crisscrossed the globe in a frenetic buying spree, making deals through a labyrinth of subsidiaries in China and abroad. The purchases have included household names for Americans and Europeans. Among them are Minnesota-based Carlson Hotels—owner of the Radisson and Park Plaza hotels—which HNA bought outright last December for an undisclosed sum. In March of this year, it bought 25% of Hilton Worldwide Holdings, the hotel group, from Blackstone for $6.5 billion. And in May it increased its stake in Deutsche Bank to become its biggest shareholder, with its stake worth about $3.7 billion.

The list goes on: HNA owns the airline catering giant Gategroup and the aviation servicing giant Swissport. In April of this year, HNA’s Dublin-based aircraft leasing subsidiary, Avolon Holdings—which HNA bought in 2016—acquired the aircraft leasing arm of the New York financial firm CIT Group for $10 billion, turning HNA into

the world’s third-largest lessor of planes.

And its U.S. real estate holdings include 245 Park Avenue in Midtown Manhattan, which it bought in March this year for $2.2 billion.

In December, HNA went to California and bought Ingram Micro, the Irvine-based company that is the world’s biggest distributor of technology products, with operations in about 160 countries. The price: $6 billion—in cash.

There are plenty of other purchases that, by HNA’s outsize standard, seem almost forgettable: eight golf courses purchased in Washington State for $137.5 million last October, for instance. In January, HNA Capital, one of the group’s subsidiaries, spent about $200 million for a majority stake in the New York hedge fund SkyBridge Capital, according to HNA. That deal might have gone unnoticed had the seller not been Anthony Scaramucci, a key financial backer of President Donald Trump. In the blaze of coverage over Scaramucci’s windfall from China—after Trump’s acerbic anti-China talk—the President shelved plans to appoint Scaramucci to a White House post.

As it swallows new businesses and properties, HNA is making a rapid ascent up Fortune’s Global 500 rankings. The company first appeared on the list in 2015, at No. 464. Last year it jumped to No. 353. And this year it’s No. 170, with some $53 billion in revenue—a nearly 80% gain over the previous 12 months.

Add in a full year of Ingram Micro, which last year had some $42 billion in sales, and HNA Group should easily crack the top 100 of the Global 500 in 2018.

But HNA’s thirst for growth seems far from sated. That was clear when the company’s top executives met Fortune over several days in late June. It was a rare window into the privately held (and private) company. The execs described goals that seemed wildly ambitious, until one considers that HNA started from scratch just 24 years ago—making it younger than Apple, for example, by a full 17 years.

Indeed, the man who runs HNA today is set on its becoming one of the world’s biggest companies, period. “We have a target to be in the top 10,” says HNA’s

CEO Adam Tan (his Chinese name is Tan Xiangdong), sitting in his hotel suite in Paris the morning after the company’s spectacular dinner, a charity event that takes place in a different city every year, on the birthday of the company’s billionaire founder and chairman, Chen Feng.

The Paris dinner kicked off HNA’s “International Week” in Paris, in which major clients, bankers (including from Goldman Sachs and J.P. Morgan), and

HNA founder Chen Feng

Chen says HNA’s driving philosophy is to be a Buddhist-style “practitioner of compassion, wisdom, and altruism business partners converged on the city over several days for meetings. At the National Golf course near Versailles, outside Paris, HNA launched the first HNA Open de France, a European PGA tour it now sponsors. All of that is valuable branding for a company grasping for the top. Tan, known universally in

the company simply as Adam, says he doesn’t know how long it will take for HNA to become one of the world’s biggest companies. But he’s confident that it will get there. It helps, he admits, that business is booming at the moment.

“Earning money is so easy,” he says, laughing. “We are now the geniuses.”

But the East is dominant in HNA’s 64-year-old co-founder and co-chairman, Chen Feng. He arose at 5.30 a.m. to meditate for 90 minutes. Chen, a devout Buddhist, says he packs his own meditation cushion when he travels so that not a day passes without an intense session. The practice has been crucial to his management of HNA, which he founded in 1993.

“According to Buddhism, you become very calm and your wisdom will come out from you,” Chen says. Besides, he jokes, it keeps him young.

Among employees, Chen is revered as the company’s visionary, whose faith infuses its culture. “I bring a lot of stuff with me,” Chen says. “This hotel doesn’t know that kind of teapot.”

Thanks to HNA’s success, Chen is now a billionaire. The company would not answer questions about his exact worth or how big a stake he holds in the company. But his wealth made news in New York this year, over reports that he and his brother had each paid $47 million for apartments in Manhattan’s One57 tower.

Chen says HNA’s driving philosophy is to be a Buddhist-style “practitioner of compassion, wisdom, and altruism.”

Chen, Tan, and four other HNA founders have pledged their shares upon death to HNA’s charity, the Hainan Province Cihang Foundation, which owns 22.75% of the group’s shares. HNA says the remaining 77.25% of shares are held by Hainan Airlines Holding and 18 individuals, whom it would not identify. The Foundation now owns 52.25% of HNA. It remains unclear whether the ownership structure has materially changed in recent days, or whether the closely-held company has just opted to reveal more accurate details of its top shareholders.

While CEO Tan says HNA just “happens” to have Chinese roots, it is those ties that may be key to determining HNA’s next moves. ■ SEPTEMBER

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PROFILE

Spending On Marketing – Investment Or Expense?

During the two decades of my career, I’ve had the unique privilege of acquiring knowhow from the best authorities in seven Serbian and multinational companies about the management of successful working processes, teams of people and ways of making business decisions. I’ve familiarised myself with the advantages, but also the constraints, that management faces generally, and especially in the marketing domain

SANDRA RAPO dipl.ecc Marketing expert for the development and promotion of brands

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he array of market niches in which I have researched markets and competition, and set up and implemented sales, marketing and advertising strategies, has been extremely wide. Over the course of time, the necessity to advertise the products and services of these companies became ever greater, while the understanding of individual management structures of the need to invest in marketing activities, unfortunately, reduced. In most cases, for subjective or objective reasons, marketing was viewed as an expense on the balance sheet, not as an investment that would increase the balance. The constraints I confronted were a challenge for me. Over time, my pragmatism, dedication and desire for personal and career advancement increased. I developed business presentation and negotiation skills, and achieved a high level of effective communication. The success of this was reflected in the trust I received from management and the fact that spending on marketing is indeed a long-term investment.

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Marketing “Tsunami”: The market became turbulent and tight for all stakeholders a long time ago. Key changes increasingly occur “overnight”. Top management increasingly resorts to exclusively economic and creative solutions that can be realized quickly. I am pleased to discover

cation channels that have enabled them to “survive” the new trends of the marketing “tsunami” and secure increased profits.

Filigree approach to marketing: If we take into consideration that competition is “more awake and active” than ever before, that new technologies “enchant” us with their communication “at a click” capabilities, and that consumers and investors’ project are increasingly demanding, the question arises as to how to respond to the increasingly demanding challenges and arrive at a WIN-WIN strategy. The answer is simple. By being continuously up-to-date with newly emerging trends. Smaller or larger brands, local or global giants, do not close their eyes before the marketing “tsunami” and the need for a unique approach to devising marketing strategies and advertising campaigns. Marketing experts predict that only those companies that plan, lead and finance their marketing activities over the long term with a filigree approach will secure multiple increases in sales and profits for themselves. 

I am pleased to discover that in recent years many Serbian companies have made a major shift in their focus from the traditional way of considering spending on marketing as an expense and invested in new technologies and communication channels that have enabled them to “survive” the new trends of the marketing “tsunami” and secure increased profits that in recent years many Serbian companies have made a major shift in their focus from the traditional way of considering spending on marketing as an expense and invested in new technologies and communi-