Two years ago, more than 9 million KM was invested in the construction of a factory to make alkali activated bentonite for Bentoproduct Ltd.in Sipovo. Today more than 90% of the factory’s production is exported. The manager of this company Sasa Grbic, explained that one of their most important goals of business operations is being accomplished by having a positive impact on the overall economy of Republika Srpska. Income from exports could exceed 5 million KM in 2013. Grbic adds that creating new business possibilities, making new products and conditions for new jobs and conquering new markets are professionally rewarding.
By: Senka Trivić
In the last year you were given the FIPA B&H award in the category of the most important greenfield investments. What is the rate of increase in capacity and what do you make of the development that has taken place so far?
Bentoproduct Ltd is a completely new name in the bentonite processing market, with bentonite as a mineral material with very specific characteristics. Our volume of sales in 2012, which was the first year of commercial production, was almost 10.000 tons of finished bentonite products; we expect almost 20.000 t of total sales in 2013. As the total annual capacity of our processing plant is 47.000 tons, we are only operating at 42% of total capacity, which is enough for us to enabled us to get out of the red and earning profits. The policy of dynamic development and the introduction of new more profitable products in our product range, immediately after successfully starting to sell our main products, enabled us to have a sufficient income vs. expenses ratio. Another thing that helped us become prominent in the market is the quality of our technical support to our customers and the fact that we consistently satisfy our customers by complying with product quality standards and making punctual and quick deliveries of product. Something that the management of our company is especially enthusiastic about is the exceptional development potential of this whole project.
How challenging is it and is there any difference in managing foreign capital (Russian, in this case) in Republika Srpska?
I have been in various managerial positions for more than ten years now and I feel competent enough to assess my present role and position in relation to the capital owner who is from the Russian Federation. This role is certainly different from any previous one, primarily in the sense of authorizations and responsibilities. In this specific case, the owner of capital decided to delegate full responsibility and authority for running the investment project, and later the management of the newly created company, to me, as a manager. This was a big challenge for me at the time, but I realize now that this is probably one of the best ways to successfully manage a business. Once that the mid-term plans are approved at the highest level, I am also involved in that decision making process, all short-term plans and their implementation, including the selection of all staff, are solely my responsibility. Prompt and full reporting on the implementation of the agreed plans is required both with regards to current operations and extraordinary events. On the other hand, a manager is also expected to be sensitive about the signals coming from the business environment and to make recommendations for any changes in the previously agreed strategies, which is absolutely crucial because of the dynamic market that we have today.
What is your opinion of the capability of domestic managers, do we have qualitfied, expert staff?
I will be quite straightforward. Our people very easily adapt to the benefits brought by the power of having such extensive authority, as implemented in the modern approach to management. On the other hand, they find it equally difficult to get used to taking the responsibility that comes with it, without which no company can be successfully managed in competitive markets. Managing any business, especially a complex production system including the management of all business operating structures, requires knowledge, skill, experience, creativity and an ability to have a vision of future development, and last, but not least, being highly capable of taking responsibility for making and carrying out decisions. Furthermore, there are not a lot of managers that can do that without building a successful team of associates. Experts that have all these qualities are quite rare here. This does not mean that we lack well educated staff, but it is much easier to find an expert in a specific area of operations than to find an accomplished manager who is expected to successfully run the whole system. This is certainly one of the reasons why, in my opinion, the level of management of available resources in the RS is still not efficient enough. However, things are progressing slowly in that field too.
The expected future profit of the company. Where do you see the main contribution of the factory in the RS economic development?
To meet the expectations of all stakeholders we should achieve the profitability rate of about 25%, and then make an additional effort to raise it to as much as 35%. This is possible if we act wisely and adjust the sales structure to more profitable products – and this will be one of my priority strategic planning tasks in the third year of operations. Nevertheless, the main task in the first three years has been to have necessary production and sales levels so that the profitability threshold can be reached within a short time and such profitability and liquidity achieved to enable us to service the current operations, repayment of loans and create conditions for further investments. When I think about our whole contribution to the RS economic development, I have a clear vision that we should make five factories out of one. Like I already said, this project has an exceptional development potential and I don’t think that this vision of mine is only a dream. At this moment, the creation of new, stable jobs is by far the biggest contribution to the development. Creating new jobs, engaging domestic suppliers, and maintaining our significant share of exports as total sales are our ultimate goals, regarding the overall economic situation and the development of the RS.
What is your assessment of the RS from the point of view of entry and/or attraction of foreign investments and the possibility of establishing successful companies?
Successful foreign investments as a rule attract new investments. Therefore, it is extremely important that the current foreign investments be supported at all institutional levels, so that their successful implementation is easy to facilitate and a conducive environment for new investments is created. For any specific right that they get, the investors should make appropriate commitments. At the same time, the responsible bodies and institutions are expected to give significant support to the implementation of the related contracts, to continuously monitor the fulfillment of commitments, and to promptly react and take sanctions against defaulting or any irresponsible party. The RS is becoming a safer and safer zone for business investment and is thus becoming more attractive for foreign investors. My perception of the institutional development of the RS is that the republic bodies, although still not at an appropriate level, are more and more ready for new challenges. Both foreign business delegations and individual foreign investors will find an open and constructive approach at the republic level. On the other hand, the local communities often lag behind in that regard and have unclear visions, frequently hampered by problematic private interests of influential people. The role of the local communities in business development is essential as well as their impact on creating a more favourable environment for foreign investments. In that sense I would emphasize a need for more vigorous progress and development of local institutions in the sense of better professional development of staff and a more creative approach to the development plans of local communities. The resources and the potential are certainly there, but they need to be more effectively managed for the benefit of us all and for the generations that will come.