Authorship text of MK Group’s Corporate Communications Director for Serbian Association of Managers
These days, all media and social networks are flooded with one theme: coronavirus – the current spread of this infectious disease and its effects on the economy not only of Serbia and the region, but the entire world. Furthermore, it is evident that no country is prepared for this scenario, but all of us are doomed to search for ad hoc solutions. As Serbia was fortunate enough to have the first patient with coronary virus disease in early March, we had the opportunity to learn about the reactions of other countries. Everyone knows by now the so-called Italian scenario we want to avoid, or an image circulating around the world of how the Chinese have managed to set up a hospital in ten days and make it work. A conclusion we can draw from both of these cases is the same: it clearly shows the impact of solidarity on overcoming the crisis, and the effects of lack of it to a society.
In one week, 3.3 million Americans have lost their jobs which represents a precedent in the American history. We are talking about one of the largest global powers. On the other hand, Sweden, the largest Nordic economy and one of the richest countries in the world, estimates that it will fall into the biggest recession even bigger than the one it suffered during the economic crisis in 2008. While Swedish analysts estimate that GDP could move from 4% which represents a “positive” scenario to 8% if a large number of companies go bankrupt, the question remains where are the “small economies” and their companies?
It is clear that there are no magic solutions, but what could help us is a comparative analysis of how economically strong states deal with this problem. By applying good and positive examples from practice, as well as with a strong sense of solidarity, not only at the contemplation level, but by applying it at work, can we be more successfully in combating this “invisible monster”.
There are many bright examples, and what we need to do is to look at this problem from another angle. A large number of medium-sized companies have reoriented their businesses in the short term to help the healthcare system in these difficult times for our country. So, recently, a post on Linkedin made me smile. Namely, one domestic company primarily dealing in the production of memory and standard foam, have used its machines for the production of hygiene masks. Also, some enthusiasts have found a new application for 3D printers and now print protective visors for healthcare professionals.
Speaking from MK Group’s point of view, as one of the largest regional groups having 75 companies and thousands of employees, I can proudly say that we resist extraordinary challenges. It is our greatness that is at the same time our greatest strength. MK Group’s business is divided into 3 main segments: agriculture, banking and tourism. While in many situations this seems incoherent and challenging to manage, in these situations we see that our leadership team at the head of each division has a sufficient level of autonomy and agility to adapt to the new circumstances. In that case, the holding company becomes a firm support and it is able to support each of the divisions firmly enough. Of course, this unforeseen circumstance has hit each of our branches. Some of them less, like the agrarian segment and some of them more, like the tourism segment.
I mentioned the agrarian segment as perhaps the most strategically important branch in Serbia at the moment. Our agricultural companies operate smoothly and continue their planned activities. The sowing period of sugar beets and peas is in progress. Flora Factory, dealing in the production and packaging of frozen products, currently operates in 3 shifts in order to comply with all recommendations of the Government of the Republic of Serbia.
We manage to deliver the required quantities of products and meet the needs of the domestic market every day. Additionally, I would like to point out that in these moments, both the cattle breeding and fish farming function regularly and deliver milk and fish to all our customers. Carnex is perhaps the most affected when it comes to market demands. The work is also organized in three shifts, producing about 2 million pieces of sterilized canned food each week to ensure that end-consumers are sure that there will be enough products on the shelves at supermarkets. We have prioritized all of our items to fully focus on top sellers’ production in sufficient quantities.
When it comes to the banking segment, this was a good opportunity for electronic banking and the process of digitization to show all their strengths as we have worked a lot on these segments in the previous period. I believe that the banking market, and all the industries that have now had to switch to a virtual business model, will be significantly changed when this crisis passes. This, unfortunately or fortunately, was an “in vivo” experiment on how electronic technology can maintain a system and its smooth functioning. Of course, in the end, in this process, as like in any other, there will always be those who will adapt and grasp the situation more quickly as leaders, and unfortunately, there will be those who will remain aloof. When it comes to AIK Bank, which was pronounced the best commercial bank last year, as it is popularly said “no mountain is too high” unless this state of inactivity of people and business lasts for a long period of time.
On the other hand, the segment that has had the most economic consequences in the whole of Serbia and globally, which will only appear in the next months in the right number and size, is tourism and hospitality. Undoubtedly, our hotels are affected too: Grand Hotel in Kopaonik and Sheraton Hotel in Novi Sad have suffered a severe hit due to the cancellation of a large number of overnight stays. However, it is worth mentioning that both hotels manage to move their events and group visits for the coming period, when the situation in the country and in the region is expected to stabilize. Grand Hotel is actively working on expanding its summer offer in order to prepare exclusive packages intended primarily for domestic guests in a timely manner. The same goes for our hotels in Slovenia and Croatia. All employees employed at the hospitality segment of the hotel are on the redistribution of working hours and using the old vacation until the situation calms down. Our ultimate goal is to keep all our true and loyal staff.
It is this industry that probably was the first to open the door and launch a wave of socially responsible projects. MK Group’s President, Miodrag Kostić, is among the first businessmen to offer accommodation capacities in Novi Sad to the Institute of Public Health “Dr Milan Jovanović Batut”, as well as to cover all the costs of patients and doctors. In doing so, our company has once again stepped forward and shown that it is truly a reliable partner to our entire community. In addition, we’ve donated 6 million dinars to the Institute of Virology, Vaccines and Sera “Torlak”. Immediately afterwards, AIK Bank has made a 28 million donation to the Republic Health Insurance Fund for the purchase of 10 respirators. Our food production sector has also become involved in the fight against coronavirus. For the socially disadvantaged members of our society, we’ve allocated the products of our companies Žito Backa, Sunoko, Carnex … All in all, over 42 million dinars have been allocated so far, and we are not stopping here, but we will continue helping our society to overcome this crisis faster and with less consequences. In addition, I can say that this is not a public praise of our company, but an appeal to others to contribute because we are only strong enough together.
Let me remind you that MK Group has been successfully resisting various storms for more than 35 years in the Balkans. So far, it has survived the war period, numerous economic crises, the transition from socialism to liberal capitalism, and our greatest strength lies precisely in the fact that we do not take up any challenge easily. In these times, we are working at full speed. Our annual revenues are at the level of 600 million eur, and our debt does not impose a burden over our business operations. All this gives us a sound and stable basis for amortization of all the potential losses that may occur during this period. It is left to us to come together and continue moving in this direction until the end of the crisis. In the end, the strength of a company is not only reflected in achieving great results during a peaceful period, but also in making smart decisions during period such as this now. That’s why we in MK Group say – “One vision, smart decisions”.
