politics/entrepreneurship
Frank Brozovich
January 07, 2002
HEADLINES, Monday January 07, 2002
Source: Slobodna Dalmacija, January 04, 2002
INTERVIEW: MIJO BRAJKOVIC, GENERAL DIRECTOR OF THE ALUMINIJ MOSTAR COLOSSUS,
THE MOST SUCESSFUL EXPORTER FROM BiH
Aluminij d.d. Mostar ended one more fiscal year with exceptional results in
spite of the political spasm it was working in. We asked Mijo Brajkovic how
the company and he himself handled all of this, and will it finally pull out
of this political squeeze this year.
“Despite political pressure, we made production progress in the
year 2001. we reached record metal production of 95.6 thousand tons, which
is our all-time record. That is an increase of 1,000 tons and it put us at
the top among aluminum producers in the world.
The average pay in Aluminij is 1,300 marks, and we all received
Christmas bonuses in the amount of 70% of our pays. I would like to see
someone in Croatia boast with these results. If we add that in the past year
we set aside 17 million KM for customs, duties, benefits, and taxes, then we
can ask ourselves what these petty politicians want from us and how long will
they keep accusing us.”
And what kind of financial results resulted from that? How much did Aluminij
exports, in 2001, amount to?
“Increased productivity and production didn’t follow even
expected financial indicators. Our products are on the world’s aluminum
market in London, and their price fell last year. Aside from that, our
exports for the year 2001 amount to 300 million DEM, and we export to
Germany, Switzerland, France, USA, Canada, and other countries.
It can be said that Aluminij has become a pet in the world; it is
the only BiH representative in the business world of the West and receives
credit without any problems.
The Federal Premier Alija Behmen stated recently that BiH did not
receive anything from the international community in 2001, but we are just
realizing a credit of 140 million DEM for electrolysis modernization, and
these days we are finalizing credit for rolling mill modernization.
Two months ago, in Geneva, we received a plaque for the quality
of our products. And while others in the world are praising us, in BiH we
are being labeled and accused.”
In the year 2001, political pressure on Aluminij, and on yourself personally,
was fierce, how did your foreign partners react to that?
“That nasty politics didn’t vacillate our partners and investors in the world.
The BiH delegation lead by Dr. Zlatko Lagumdzija visited Europe and informed
on the pressures to Aluminij. I think that Dr. Lagumdzija was told that our
company is a strategic partner of German companies and that it would be wise
to treat Aluminij d.d differently.
A substantial amount of German capital is invested into Aluminij, and it
isn’t good that its leadership be exhausted in defense from political
accusations.”
And what impact did this have on Aluminij itself?
“We say that politics didn’t cause any damage in the world, but
within our country it did because we had to expend 30% of our force on
skirmishing, and not on production.”
The Republic of Croatia, actually TLM Sibenik, owns about 20% of Aluminij
shares. It is the first Aluminij investor?
“We learned that they reacted somewhat secretively in order to
protect the interests of TLM. We would have liked it if they did this loudly
and publicly, so that our people know what’s going on.
The Republic of Croatia invested 18 million DEM in the first
steps of renewing Aluminij, and it is the first investor. That is capital
that the Republic of Croatia itself must protect, and it was brought into
question with some sort of petty-political games.
And the blow to TLM’s capital is a clear message to all foreign
investors that investing into BiH is not safe, and thus is not smart.”
Lagumdzija announced that priority number one for the New Year is the
continuation of economic reforms in BiH; which were begun with the arrival of
the Alliance to rule. What are those economic reforms?
“I am not aware of those reforms. They haven’t reached us yet,
but I’m happy when I read about it. We in Aluminij will be the first to
welcome economic reforms.”
According to Lagumdzija the second priority of those reforms is strengthening
state authorities and its institutions. What do you think about that?
“Without real economic reforms at the whole of BiH level, there
can’t be those on the plan of state government and its institutions. The
state is not its own purpose and must be regulated with good laws. It must
open itself to those who work successfully and export, and that doesn’t exist.
There are no reforms if those who work successfully and export
are not stimulated, because then we will create a black and gray economy
ourselves, which will cause the priorities to be endangered, and that means
the economy.”
What does that mean from your experience in Aluminij?
“Our company is the largest exporter in BiH, but we never
received even 1KM in the name of stimulation, rather certain people, who we
know of, blacken our name to our exporters. That was done without success.
We pay the most expensive electric energy. We paid for war
damages by ourselves, we resolved the issue of laid off employees on our own,
and we are proud to say that Aluminij did not receive a penny of the many
billions of dollars that the international community invested into BiH.”
HERCEGOVACKA BANKA STILL OWES US MONEY
As long as we are talking about these problems, tell us how you personally
came to be on the Hercegovacka Banka provisional administrator’s unfit list?
“That at any rate is a question to ask Toby Robinson. I
personally don’t have an account, a savings-bank book, or credit with
Hercegovacka Banka. Nor am I a shareholder of the bank. The same goes for
Aluminij. We operated through this bank and all of this was done very
correctly.
However, Hercegovacka Banka owes us 300 thousand dollars, so we
should put it on our list. The facts are not important in this whole matter,
but rather that I am Mijo Brajkovic and I don’t expect that someone will
apologize to me for this false accusation.”
The decisions on laid-off Aluminij employees and severance pays made their
way to the FBiH Council for executing Article 143 of the Labor Law. How did
they pass over with this institution?
“Erneveza Grustanovic, the president of that Council, announced
on the Federal Television before Christmas that only Aluminij’s decisions
were brought out in accordance with the law. She added that Aluminij’s
decisions were prioritized to have their legality evaluated. We ask
ourselves why we were a federal priority, as if we are the biggest criminals
in this country.
And now that the council has announced that everything is in perfect order, I
personally protest against those labor unionists, politicians, and
journalists, who accused and labeled us as nationalistic hardliners for six
whole years. If there were rule of law in BiH, we would sue them, but we are
aware of the fact that nothing would come of it.”
What is up with the privatization of Aluminij? Why hasn’t privatization come
to order yet?
“First I would like to say that according to existing valid
documentation, Aluminij is a company of cantonal relevance, and is under the
authorization of the Cantonal Agency for Privatization, not the Federal
Agency. Two years ago we submitted all the necessary documentation for
privatization to the Cantonal Agency, but nothing has been set in motion yet.”
What is the hold up?
“We were told that they were waiting for the OHR’s report on
Aluminij’s operations, which was completed three months ago, and still
nothing. Somebody is obstructing this and we are afraid that our
privatization will fall into the pre-election scissors, and that many people
will begin to lay claim on us and manipulate with us.
And this would be damaging to all the peoples as well as to our region. We
wonder how other companies that submitted their documentation to the Cantonal
Agency after we did, have gone into privatization, and we are still waiting.
Somebody has to explain to us what the hold-up is when the law
clearly states that two months after submitting documentation, if no faults
are found, privatization must be implemented.”
You are moving towards modernization of the whole company, all of its
components, which will be completed by June of this year. What is the word
on human resources for the new technologies?
“We hold the principle of new people for new technologies, and we
do so by sending our people abroad on specialization. To date we have sent
eighteen of our people to the USA, eighteen to Germany, and at the current
time we have two groups in Sweden who are doing a course on expenses for
Aluminij. We know that new technology and new equipment are not enough, but
that the people are what is important, and that is how we act. We must be
concerned about the future of Aluminij, and that means young employees.”
We are currently in the beginning of the year 2002, and what does this year
hold for Aluminij?
“In June of this year we will complete the modernization that is
currently in process, and an increase in production will follow immediately.
By the end of the year we will have produced 101 thousand tons of metal, and
in the year 2003, production will reach 118 thousand tons. Imagine what
constant increases in production, and not hiring new people, means for BiH.
Increasing capacity utilization and lowering the cost of
production? Have you ever heard anyone in BiH talk of increasing production
and productivity?
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