Ljubljana, 04 January (STA) - Branko Zibret, a partner at management consultancy A.T. Kearney, believes excessive debt and poor productivity are the main problems in the Slovenian corporate world.
"Companies have excessive debt burdens that are blocking them in strategic decision-making...The problem is that debt has not been converted to growth," Zibert said in an interview for the STA.
An even bigger issue, according to him, is low productivity compared to foreign competitors. "It's a question of achieving added value on the international level. That's what counts, the Slovenian market is too small to be relevant."
Zibert sees three solutions for indebtedness: receivership or debt restructuring, quick sale to investors, in particular foreign investors, and disburdening with the help of the state and international financial institutions.
Slovenian companies are also struggling with low investment in development, which Zibert says affects productivity, value added, innovation and know-how. "Some Slovenian firms are very innovative, very good, but most are not."
Asked which markets Slovenian companies should focus on in order to secure growth, Zibert said that nearby markets were a good start, but the "southeastern axis" stretching from Brazil to China is where growth is.
"The winners of future growth will be firms that are successful on this axis," he said, adding that firms must either have a go alone or in partnership with companies from neighbouring countries.
Zibert also dispelled the notion that one cannot be small and have a global presence, quoting Trieste-based coffee maker Illy, which has a global presence but the sales of a medium-sized Slovenian company.
Slovenia has traditionally had a strong presence in SE Europe, but whereas this is a market that Slovenian companies know well, Zibert says it has its limits.
"These are markets we know, they are close but they have limited economic power...What should be used is the human potential of these markets: managers, scientists, experts."