Mikko Jalovaara, director at Tikkurila Zorka - We are considering purchase of some other companies in the region

(Mikko Jalovaara)

Last year, when the Finnish group Tikkurila took over Sabac-based Zorka color, instead of in Serbia,this acquisition caught a lot more media attention in Finland. Thus, their press reported the acquisition of our company, Tikkurila normally operating 150 years, paved the way for other Finnish companies to come and invest in Serbia.

In an interview for eKapija Mikko Jalovaara,Director in Tikkurila Zorke is speaking about why the European giant in the manufacture of opted for Serbia,where it then was, and where Zorka is nowadays, as well as whether another acquisition is underway.

eKapija: Why did you opt for Zorka boje? How did you decide to come and invest in Serbia?

- We were observing Serbia and ex Yugoslav and the whole region countries for a very long period of time. Serbia is the biggest market. Therefore, it is a logical to come and invest in the biggest country and set up business here.With respect to that, we were expecting color consumption on these markets would grow in line with moving in developed countries. Usually two parameters are linked: When standard of people grows, color sales increases as well.Therefore, we expect market development in this region.

On the one hand there are our expectations and on the other hand we had another important reason. Namely, big companies, competitors to Tikkurila group at the European level, are not present here. Maybe they are, but through distributors but they do not have their own companies (production) in ex Yugoslav countries.When I say big competitors, I am referring to AkzoNobel for instance, etc.

eKapija: How do you see Zorka boje business at the moment you tookit over and what is the current situation?

- Zorka was in good conditions when we took it over a year ago. Zorka and its brands were better known than it was five years ago and had good distribution system. That is, direct system to stores, not through distributors and therefore Zorka products were available to everyone. Now, if we are speaking about first couple of month of business, I can say we are very satisfied with Tikkurila Zorka, and we believe the colors construction market share increased.

eKapija: Industry of colors is tied to construction and yet, you bought Zorka boje when construction was suffering crisis effects?

- You are absolutely right. But, a fall in construction field has not to a large extent influenced our results. One of the reasons is that we are not participating in any big or difficult construction jobs. I cannot speak about exact figures in business since Tikkurila is listed at the stock market but we are very satisfied with business results in the first six months.

eKapija: Where do you see company further development chance and what are your advantages compared to competitors?

- We are bringing new tint-tint technology. It is the way you paste colors and create different nuances. It is something that already exists in our group.Also, we will bring new knowledge on system development as well as training and further development model present in Tikkurila group. We train our users,professionals, store owners and consumers and we are trying to transfer basic knowledge on colors, how to paint and how to decorate.

The thing that makes us different in comparison to competitors is that we have strong local player, Zorka, on the one hand and on the other hand, there is Tikkurila, a strong European brand. When you merge them to one company, you get the thing our competitors do not have. I cannot speak for competition but I think our company employs good, reliable people ready to educate and are very motivated. There is no one who would leave Tikkurila – this is the thing I consider as an advantage.

eKapija: What are the plans for the upcoming period like?

- We target at becoming number one in Serbia. The market share is difficult to measure since there is no official statistics (which is not the case only in Serbia but in other countries as well). And then, to become the biggest player in the Balkan region.

eKapija: On your way to becoming No.1, is Tikkurila group perhaps planning another acquisition in Serbia?

- At the moment, we are satisfied with the situation, but of course, one never knows, we are always open for good offer. All options should be checked.

We monitor a couple of companies in the region and, if an acquisition occurs, it would most likely be another company in Serbia. Region is also quite attractive. We have not come on short-term basis, to invest and leave; we have long-term plans in Serbia.

eKapija: Finish investors are not so much present I Serbia. What are your experiences of entering our market?

- We are the first Finish company that came to Serbia. Of course, there are exporters but this is the first acquisition and we are proud of that fact. The Finish press reported our coming as "paving the way for other companies to come and invest in Serbia". W did not have any problems with coming to your country and I, personally speaking, adapted to Sabac and Belgrade where I live,very quickly.

Jelena Djelic