|
 |
|
|
|
Taking stock
Business File Special Survey No. 53 on Greek outward investment October 2004 -- When Greek companies first started to enter the Balkans at the beginning of the last decade, it was assumed that the upheaval associated with the disintegration of the Soviet empire and the fragmentation of the Yugoslav Federation was, if not over, then well on the way to winding down. Only the most far-sighted -- and few there were -- could foresee the violence that was still to follow in Albania, FYROM (Former Yugoslav Republic of Macedonia) and Serbia or the political turbulence that would at times come close to paralysing government in Bulgaria and Romania. Greek entrepreneurs investing in the region realised that they were entering an area of high economic instability. But this was something with which they were familiar from the recent history of the domestic economy in which they had faced high inflation, soaring interest rates, currency devaluation and on-again, off-again privatisation programmes. They thought that they could cope. And they did. But only with great difficulty, which involved a steep learning curve. Perhaps the most significant thing to say is that none of the large companies that have gone to the region have failed, although the state-controlled Hellenic Telecommunications Organisation (OTE) is facing severe difficulties with the profitability of several of its foreign ventures and may, in fairly short order, under incoming New Democracy administration, divest or liquidate some of its assets. In the private sector, the ice cream maker, Delta, is reconsidering its position, although its management is oracular about precisely how it sees the way forward. The publication Business File, has tracked the course of Greek outward investment in three Special Surveys in 1995, 1998, and 2000. In its latest, "Taking stock," published in October 2004, it analyses the foreign investments of eight of the largest Greek companies that have invested in the Balkans and beyond plus those of three large banks that have followed them. Using financial documents and interviews with senior executives, it attempts to evaluate the benefits and pitfalls of investing in developing economies. It also considers the role of venture capital in the foreign investment process. Basically the report concludes that if firms have iron nerves, deep pockets and strong legal back-up, they can be profitable -- but probably only over the longer term. It illustrates that, as the economies of South-East Europe converge with those of the EU, the business focus, is shifting from dodging bombs and bullets to more traditional concerns such as:
The regional political environment is for the moment relatively stable. A new wave of Greek investors has already begun, or is gearing up, to follow the pathfinders. But, the report concludes, they need to be mindful of the lessons learned by their predecessors.
Timing is all.
In short, the basic elements for success abroad are the same as those of investing at home: vision and timing. With sufficient critical mass, modern management skills, and good systems in place there is no reason that Greek firms cannot now invest in places as far away as China and the Americas in the same manner as their EU counterparts. These and other issues are discussed in Taking stock, No. 53 (October 2004) in the Business File Special Survey.
For further information on subscriptions and/or individual copies of Business File, which is published by Athens-based Kerkyra Publications Ltd., please contact INVgr. Subscribers to INVgr's electronic business information service are entitled to a discount of 20% on the cover price or 20% on the first year's subscription rate. Source: Kerkyra Publications Ltd. Useful links:
Advertising
| Guest Book | E-mail | Disclaimer |
