The name VSŽ Košice (East Slovak Iron Works), is what first comes to mind to many familiar with Slovakia's economy. The industrial giant has amassed an empire by buying almost everything in sight, from the daily newspaper Narodná Obroda, to the most successful Czech football club Sparta Prague, and reportedly acquiring a majority stake in the Investičná a Rozvojová Banka (IRB), to name a few.
In 1995, 125 companies were under VSŽ's wing. The total revenue generated by all of these holdings topped Slovakia with 49 billion Sk ($1.6 billion).
It is no secret that VSŽ is friendly with the ruling coalition. Former Minister of Transportation Alexander Rezeš was just appointed chairman of the company's supervisory board.
VSŽ spokesman Ladislav Jakubec said that's the only forum where the steelworks benefits from close ties. "The main reasons for VSŽ's success in expanding revenue has been our quality of products and our commercial politics," he said.
Customers such as Daewoo though, don't mind, as long as they are satisfied with the steel. "The quality of the steel is very good, very high, and the price was good," said Ko Ju Yung, president of operations for Daewoo in Prague, after signing a deal last year to acquire 300,000 tons of steel at $460 a ton.
Other main customers include: Siemens Mohelnice, Škoda Mladá Boleslav, Ferona, Strojobal Hradec Králové, Autovaz Togliatti, Slovenské Lodenice, Whirpool Tatramat Poprad, and Obal Voogel Noot.
As far as new markets are concerned, VSŽ is setting its sights on the Balkans. "Our stratgic markets are central Europe and the EU, but we are starting cooperation with companies located in the Balkans," Jakubec said.
VSŽ feels confident on the world stage partly because it has secured a good credit rating with the world's top banks. "Naturally our good cooperation with the best banks in the world has been a positive force for our success," Jakubec said.
But in the end VSŽ returns to a kind of politics in its strategy to continue its success. "VSŽ wants to increase revenue in the next five years by higher quality, lowering costs, and ecological politics," Jakubec said.
