Jelena Petkovic, Executive Director for Corporate Management at Tigar - Survival in real sector impossible without flexibility and predictability

(Jelena Petkovic)

The company Tigar AD in Pirot is one of the few large systems that survived the transition and successfully completed the privatization process, during which none of its plants was closed and no workers were dismissed. Tigar's core business for decades - tire production, had been successfully developed until the moment when global trends imposed large companies as the drivers of development on an international level. This is definitely one of the successful domestic examples of so-called "exit strategy" in the period of transition in Serbia, both in terms of the price paid for a minority stake in the company and the fact that all jobs were preserved both at the factory taken over by France's Michelin and the parent company Tigar AD, which then focused on non-core businesses and started to actively develop them as the core ones.

In an interview with eKapija, Jelena Petkovic, executive director at Tigar, points out that the rubber business and a set of other businesses are globalized to such an extent that players need to be predictable and flexible if they want to stay in the business.

- Our long-term commitment was to survive in that business, and we got organized accordingly. We did a research on the condition of rubber footwear manufacturing capacities in Europe to find out whether there was room to start making all-season products, in other words - products intended for industrial consumers. Upon launching a new industrial location and improving our product portfolio, we were quickly profiled as the leading European manufacturer of protective rubber footwear, that is, boots used by construction workers, miners, firemen, foresters...

eKapija: On the other hand, Tigar has also changed part of its business. How has that happened?

(Photo: Tigar.com)

- When it comes to the change of business, it is interesting to mention that one of our biggest buyers over the last few years is Finland's Nokian. This brand is famous in Serbia for its high-technology equipment. On the other hand, Tigar took over a part of the portfolio of the British renowned rubber footwear manufacturer Hunter few years ago. In order to keep looking for a niche in the rubber business where we can become a leader after certain period of time, we have taken over a Danish company that used to make products of recycled rubber. It is not a novelty any more, even in the domestic market, to use recycled rubber to build sports courts or playgrounds for children. We are sure that this will soon become a standard in the construction industry because there are numerous arguments in favor of that, ranging from the environmental to safety ones.

Owing to such business model, it took Tigar three years to change its core business. All of us know very well how business conditions were in that period and, unfortunately, they are not going to be any different in the foreseeable future. That is why I deeply believe that the predictability and flexibility of business systems will remain a precondition of survival for many companies in the real sector. Of course, it goes without saying that such businesses also need to have a high-quality product that is in demand.

eKapija: You will soon organize the Annual General Meeting of Shareholders. What is the position of the company's biggest shareholders, including the state, on Tigar's further development?

- The state will not directly participate in the work of the AGM, but it should be stressed that Tigar's capital has been substantially consolidated, so that the group of major shareholders can now significantly affect all AGM's decisions. In the meantime, law has been changed as well. The Supervisory Board, which was supposed to be elected by the company, is now exclusively made of people who are not Tigar's employees, which is a big novelty. We've invited all shareholders in the same way, but large shareholders hold a stake that is big enough to enable them to dominantly affect the decisions made at the AGM, and they also have a right by law to nominate members of the Supervisory Board. We have nominated Dragan Nikolic for the chairman of the Supervisory Board, who has retired after running Tigar for 20 years, during which he always managed to preserve and ensure the continuity of operations. Our proposal is also that the Supervisory Board be made of experts in their respective fields, with an extensive work experience, whose expertise would help them manage the company. We have also prepared reports and elements of the business plan for the AGM.

(Photo: Tigar.com)

In this way, the owners of Tigar will perceive everything that the current Managing Board, that is, as we suggested - the future Supervisory Board, has done, as well as a vision for the company's further development until 2015. The aim is to finish the chemical factory project, that is, to connect the chemical factory with the technical tire factory, in order to get two strong production units - Footwear and Technical Tire. At the same time, we plan to continue to develop our distribution network and to keep on going intensively, despite all difficulties.

eKapija: The end of H1 2012 is close. We know what marked the first five months in the macroeconomics, but how did all that reflect to Tigar's operations?

- Companies in the real sector live on a daily basis. We must produce, deliver, charge... Every obstacle can additionally complicate already difficult business environment. And many things have been affecting our operations since the beginning of this year - one government, the other government, great expectations... Having in mind the importance of new jobs and investments, we primarily want to point out that it is necessary to preserve existing jobs and focus on what produces the desired effect and the money that is fed into the system. Of course, it is also necessary to attract new investments. That is why our company is also trying to find other favorable long-term means of financing.

We are now in a situation that, instead of being encouraging and optimistic, represents more than just a challenge to us - a huge uncertainty regarding whether we can respond to a big number of orders placed by large buyers. That is also a big responsibility for the company's management, given that we are to deliver about EUR 3.5 million worth of products until July 10th. And when we add regular orders to that, the value grows to about EUR 4 million. On one side, that confirms that the company has a quality market, while on the other side, it is a big task to finance all that in the conditions of general insolvency. We put a great effort into saving the chain of finance, but it is crucial that we meet all demands of our buyers. Today, if you have a market, you have everything. And if you lose a market, the damage is almost irreparable.