Next 6-12 months will be difficult, but better times are ahead

A DIFFERENT corporate culture is one of the features which Irish businesspeople face when arriving in Slovakia to do business. But once the differences are understood and accepted, mainly through better communication and trust, the result is a richer and stronger company, they say. Irish businesspeople add that they have found in Slovakia qualified and ambitious workers, and a promising market which they can use as a springboard into new emerging markets.

A DIFFERENT corporate culture is one of the features which Irish businesspeople face when arriving in Slovakia to do business. But once the differences are understood and accepted, mainly through better communication and trust, the result is a richer and stronger company, they say. Irish businesspeople add that they have found in Slovakia qualified and ambitious workers, and a promising market which they can use as a springboard into new emerging markets.

The Slovak Spectator spoke to three representatives of Irish businesses in Slovakia about their experiences doing business in the country so far, as well as their outlooks for the future in the segments in which they operate. For this survey, Jennifer Boyer, the central European director of Murray O'Laoire Architects, represented the field of services; Martin Hypký, the country head for Slovakia at Odenberg Engineering, which produces machinery for the food industry, represented the manufacturing sector; and Radoslav Marko, the central European head of sales at PPI Adhesive Products, represented trade.

The Slovak Spectator (TSS): What is your experience of doing business in Slovakia so far – whether positive or negative? Are there any barriers to entrepreneurship in Slovakia?

Jennifer Boyer (JB): Slovakia has a very positive business environment. In my experience, it is open to new opportunities and recognises that foreign companies can provide competitive expert services and offer an international point of view on their business. Barriers I have come across tend to be ones that can be overcome through better communication and trust. Often new, and in particular foreign, companies are not well received at first simply because little is known about them. At Murray O’Laoire Architects, we try to overcome this by having personal and relaxed meetings with key people that then lead to relationship building, and later trust.

Martin Hypký (MH): The list of positive features includes a highly motivated workforce, world-class manufacturing facilities, high quality, reasonable flexibility, low cost on average, and a low level of necessary corporate management involvement.

Regarding barriers we have to take into consideration the fact that Slovakia has not been open to other cultures and businesses for the last 50 years. As a consequence Slovakia has a long way to go to achieve acceptance of different national and corporate cultures, and people in low level management and other staff tend to have a lower level of confidence in comparison with the Irish standard. There are cultural differences in understanding hierarchy, activity, and in their relationship to other people Slovaks are more collaborative than the Irish, who are more individualistic. However, all these things make our company richer and stronger, after differences have been understood and accepted at the corporate level.

We have not really experienced any negatives as most of them arose from difficulties connected with the transitional period of production transfer, and different corporate and common culture.

Radoslav Marko (RM): So far we have had a positive experience doing business in Slovakia. The only barrier we see is the quite high level of payments like social and health insurance for employees and the worse business environment caused by the current government. We hope this might change after the next general election.

TSS: What is your expectation in terms of trends and developments in the Slovak and international markets where you operate?

JB: Over the last 10 years Slovakia has learned a great deal about its role in central Europe, Europe, and in international markets. The adoption of the euro has brought benefits to some and the country is now feeling the pressures as the global financial crisis hits. In many respects Slovakia is ahead of many other new EU members, not just in the adoption of the euro. Bratislava as the capital has close proximity to other international hubs such as Vienna, Budapest, Bucharest, Prague and Warsaw as well as being only a two-hour plane ride to Moscow. The workforce here is educated and motivated, and there is a bright future in the making, full of possibilities, which has been helped by population growth between 2004 and 2006. The next 6-12 months will be difficult for many companies, especially those connected to the Irish and British markets, but those companies which intend to ride out the storm and commit to this country and the CEE region will be well positioned when business growth resumes.

MH: While we have medium expectations for growth worldwide, the Slovak market related to our business is too small to take into account. Slovakia has to invest in education and specialisation, with a strong emphasis on global orientation by economic and political leaders to sustain competitiveness in terms of quality, international business and price levels.

RM: Our main business orientation is the automotive and electronic industry. However, we still have to look for new applications even in new industries to hold up in this kind of business.

TSS: How do you see your operation in the region in the near future with regards to the economic downturn?

JB: We have been here for more than three years and we have been lucky enough to take part in many exciting projects and opportunities such as the Eurovea International Trade Centre and the Bratislava Airport 4th Quadrant Urban Study. Since we are a local company which relates back to our headquarters in Ireland, we are feeling the squeeze, as many design firms are. But our intentions are to stay here, to get to know our market and potential clients even better, and grow stronger and smarter as the market rebounds in early 2010.

MH: The economic downturn gives our company an opportunity to build a stronger position in terms of savings in operational results. We do have better chances to create a new supplier base, and we as a company intend to be more creative and have a stronger “can do” style of thinking. There are certain problems with an unstable workforce and supplier base locally. We are also missing government support to help us be more flexible in terms of labour legislation, or to be more competitive with the US style of business. Since we, as a Slovak subsidiary have strong competition in our US branch, we have many opportunities to see how inflexible, even expensive, Slovakia can be.

RM: We are expecting a better business climate and business improvements based on customer forecasts next year at the earliest. As PPI CE operates in central European countries (Slovakia, the Czech Republic, Hungary, Slovenia, Bulgaria, and Poland) we see the biggest progress as coming in Poland, our new market. We would like to reach turnover growth from 2008 [figures].

TSS: When did your company begin to operate in Slovakia and why did it decide to come to Slovakia? How many employees does your company have?

JB: We first began working in Slovakia in 2003 with Ballymore Properties on Eurovea, and as this project and others in Bratislava progressed we required a permanent presence in order to deliver our high quality service. Since that time we have met a number of other ambitious local and international developers that we now work with. We had previously operated our CEE headquarters from Warsaw, and when the opportunity arose in Slovakia we relocated to deliver a better service. Overall Murray O'Laoire Architects has 208 employees spread across offices in Moscow, Dublin, Limerick, Cork, Aachen, and Bratislava. We also opened two new offices, in Abu Dhabi and Libya, this month.

MH: The company began to operate in Slovakia in 2004 and we currently have 55 employees. Back in 2004 Odenberg reviewed many options in western, central & eastern Europe – Poland, Hungary, Czech Republic, Slovenia and Slovakia. Slovakia offered, among others, a low corporate and personal tax rate, young and well-educated ambitious professional, along with experienced labour and English-speaking management personnel. Its proximity to Odenberg’s markets means that it makes a good springboard into new emerging markets such as Poland, Russia, and Ukraine, with good air and road freight links. There is also less bureaucracy.

RM: PPI C.E. began to operate on January 1, 2001, with its seat in Bratislava. We currently have six employees. In terms of new markets we are still opening new sales offices, this year in Poland; in the near future we plan to open sales offices in Romania and Bulgaria.

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