Vladimir Milovanović, CEO Of Energoprojekt

The Local Market Always Has Priority

Energoprojekt is the leader in engineering and construction in Serbia and Southeast Europe, whilst simultaneously being a highly ranked company in global terms

Vladimir Milovanović, CEO Of Energoprojekt

Energoprojekt is for decades listed on all world lists of the best engineering contracting and consultancy companies. Whilst in late 80’s Energoprojekt was listed by American “Engineering News-Record” among top 10 rankings, during last five years it’s ranking is each year better and better so in 2015 it was ranked as 193rd on the list of the top 250 international contracting companies, and as 123rd place on the list of the 225 top international design-consulting companies.

With 65 years of experience, and with works carried out in more than 70 countries worldwide, Energoprojekt holds a leading position in Serbia for many decades, but also throughout Southeast Europe as a whole. Name of Energoprojekt stands for quality and reliability in many developing countries in Africa, Euro-Asia and Middle East where Energoprojekt used to work earlier or is currently operating.

Considering the fact that more than half (52%) of your revenue is generated on foreign markets, do you plan for domestic work to assume primacy in generating revenue in the period ahead?

– The local market always has priority over foreign ones, but it doesn’t mean that if we have more contracts at home that we will stagnate or work less abroad. On the contrary, more contracts at home have a direct consequence of generating growth of business on foreign markets increasing employment and generating higher revenue and profit. Energoprojekt was founded in 1951 to construct the country’s energy sector infrastructure and we owe the development of business abroad to works undertaken in the country.

In Serbia, after decades of stagnation, new large infrastructure projects are being launched and Energoprojekt is ready and working intensively on utilising its extensive experience and knowhow on those projects eager to provide more jobs for yang experts and gradually increase volume of foreign operations

More work in the country results in increased employment for various staff members who, after acquiring the necessary practical knowledge and experience on projects in the country, in cooperation with their older colleagues, go on to enable the growth of operational activities abroad, with greater intensity, and on new markets.

Based on our successes of gaining contracts for new and major projects in the country, there are multiple direct and indirect benefits. This primarily means benefits for Energoprojekt shareholders, employees, the companies with which we work and which will then grow faster, for faster GDP growth and the recovery of the entire construction sector in Serbia. Today Energoprojekt contributes directly to the national budget, only on the basis of different taxes on salaries and tax on profit, in excess of 25 million euros.

If you were to place on scales the pros and cons of doing business in Serbia, which way would they tip?

VLADIMIR MILOVANOVIĆ and Ghanaian President JOHN DRAMANI MAHAMA, pictured at the official opening of the cargo centre at Kotoka International Airport in Accra
VLADIMIR MILOVANOVIĆ and Ghanaian President JOHN DRAMANI MAHAMA, pictured at the official opening of the cargo centre at Kotoka International Airport in Accra

– There are no more easy and comfortable markets anywhere. Similar to Serbia we are also on all other markets, including EU, facing a lot of challenges, including unfair competition, the grey zone business operations, a lack of respect for laws and regulations.

Like everywhere, here in Serbia, it is necessary to create preconditions for tenders for complex projects with major investment values to include competition between companies with similar business capacities in all relevant elements. Improving the conditions of tenders would create benefits for everyone.

The state would generate more revenue for the budget, investors would have fewer headaches when implementing planned investments, and companies that implement projects with reasonable profits would have a basis for growth and development. Market survival is directly proportional to investments in people, new technologies and know-how, their introduction into everyday use and the planning of operations and development.

We paid a great price by going public on the Belgrade stock market, and it seems that we are still paying. Capital markets and securities in Serbia develop unacceptably slowly, and regulatory bodies and the judicial system are not staffed to take the desperately needed step forward with the aim of preventing (un)permitted abuses on the market and questionable capital inflow

You have been Energoprojekt chief executive officer since 2010, while you are an engineer by profession. In one interview you said that you need time, after leaving the office, to lower your “operating adrenaline”. During all these years, which Energoprojekt job “raised your adrenaline” the most?

– The job I do is demanding and responsible. It demands teamwork, careful decision-making, which takes into consideration all the risks that accompany them and is based on a range of facts and statistics that are essential for such decisions to be made. In order to be successful in the job that I do, you can’t rely on “luck” as a basis for good results, but rather only on dedicated and professional work.

Adrenaline rushes are often caused by the unforeseen decisions of our various investors, sometimes by fierce debates among those of us at Energoprojekt, the winning of tenders and agreeing of new contracts, by the need to make some tough decisions that can cause you to gain enemies and various other events.

However, the biggest adrenaline rush I have experienced since 2010 was at the beginning of this year, when we identified transactions on the Belgrade Stock Exchange with large blocks of shares between known traders, perennial shareholders and unknown buyers hidden behind a “custody” account. We soon realised that this was part of a larger plan that was aimed at making a so-called “hostile takeover”.

For those of us who have worked and created at Energoprojekt throughout our entire lives, a “hostile shareholder” is a shareholder who tries to conceal their existence and activities on the stock market, probably because they are buying shares using money of dubious origin or have intentions upon taking control of shares that are of a destructive rather than developing character.

We paid a great price by going public on the Belgrade stock exchange, and it seems that we are still paying. Capital markets and securities in Serbia develop unacceptably slowly, and regulatory bodies and the judicial system are not staffed to take the desperately needed step forward with the aim of preventing (un)permitted abuses on the market. We saw during the past decade many companies being victims of hostile takeover with the cheapest investment capital whereas new owners were then focused how to get rid of any other shareholders and employees, become a sole seller of fix assets and etc. We fight against such scenario using all legal means through different Serbian institutions and court, and I hope that we will win at this important moment for the future of Energoprojekt.