Pavel Bouška & Leon Jakimič – Diskuse | Horizonty růstu: Mezinárodní expanze rodinných firem

Just quickly, because you both extended your presentations a bit, which doesn't matter since you covered a lot of what we were supposed to discuss in the presentation or panel discussion, as you said. But now, let's summarize briefly. When we talk about global expansion, what do you think we lag behind in compared to the Dutch, the Danes? What we want to achieve is not just the prestige of family businesses, but of business in general here. So what is still missing? What is the step? Courage.

For me, if I may say, it's definitely courage, ambition, and then the financial background of the country or its institutions. For example, you know Sypral — a huge, beautiful facade company. Recently, I heard they were trying to sell the company to a smaller firm that just secured financing, but it didn't work out in the end. That's an example. I think we lack courage, combined perhaps with some means to finance acquisitions around the world.

Pavel, so...

How is that possible? We're talking about 35 years after the regime change, almost two generations, and we still need to gain experience?

Well, I don't know if we've made enough progress in education, for example. The progress could have been better. And maybe it's connected to the culture — it's a beautiful country here. By the way, I returned from Hong Kong after 20 years, and when people asked if I regretted anything, I said I don't regret anything, but maybe I should have come back five years earlier. That's the only thing. It's really nice here. Every region is a microcosm — Ostrava is completely different from Budějovice, Liberec, even the small towns. It's really beautiful. So maybe we don't want to leave as much.

I have, I have, well, maybe that's it. That's the problem — it's too good here.

No, but not like that. Because I also have a company in Sweden, I have several companies. When you look at that country, it's not much bigger than us. It has a stronger economic history, but in terms of population, we're comparable. The growth rate in Czechia is even better than there. But when you have a brand that says 'Made in Sweden', it has a completely different power. That's up to us; someone has to lead by example, and we all have to push it. I also think we lack a certain cohesion. When I see how the Dutch create clubs and cooperate around the world, maybe we Czech companies could cooperate more in international expansion.

Well, that's true, chandeliers filled with granules, that works perfectly.

A little polishing. One more thing that might help is to talk about what didn't work, some fuck-ups during expansion. What experiences can you share?

With expansion, definitely setting up a branch somewhere that had no potential, and then our employees were kidnapped by some kidnappers at an intersection, so in São Paulo. I wondered if it was Cape Town or São Paulo. So we didn't fully check how the business market works there. That's the kind of thing that happens during expansion. There were actually more screw-ups.

By the way, do you recommend, if you've done it yourself, to bring in someone from the local environment? Not just send a student to a hotel room, but to actually have it well-prepared.

Well, as I get older, I realize there isn't just one right way; it depends on the stage of the company. Generally, if it's a Czech product, you need an emotional connection. That passion is best complemented by someone who experienced it here in Czechia, who knows the production and the people who have that passion. And the local environment is best known by local people. We always tried to combine it so that expats brought the passion, knowledge, and communication skills. Unfortunately, not all glassmakers or project managers used to speak English, so we needed to communicate in Czech. But local people are irreplaceable. So for me, the ideal combination is to have both locals and own people.

Great. If anyone has a question, this is the right time to raise your hand and we'll give you a microphone. But it looks like... Yes. Excellent. I'm glad. It looked like everyone would want to talk to you during the coffee break, so just raise your hand so my colleague can hand the mic.

Hello. I thought someone has to start. Pavel Smažík, Heradent. Leon mentioned Hong Kong. I remembered sitting with our Hong Kong partner at Malostranská Beseda, and he relaxed and said, 'When I told colleagues I was going to the Czech Republic, they said, 'Aren't you afraid?' And then at home I told my wife I was going to Prague, and she said, 'Lucky you.' So at that moment, the perception of Prague and the Czech Republic in the world is probably not on the same level. We're lucky to say Herbadent made in Prague, but support for the Czech Republic is definitely missing, because the phrase 'Aren't you afraid?' should not be what a foreign partner hears.

That's interesting, and it somewhat goes back to what Pavel said. Maybe sometimes it would be worth writing 'Made in Prague' instead of 'Made in Czech Republic'.

What do you have written on your boxes, Leon?

Made in Czechia. We're proud it's from Czechia, but we'd prefer 'Made in Bohemia'. Historically, it was always Bohemia Glass, Bohemia Crystal during the glass export era. That would probably be the best brand, but since that option isn't available, we need discipline and unity. 'Czechia' is a one-word name, and marketing-wise it always works better than a two-word name.

So 'Switzerland' is better than 'Swiss Republic' or 'Swiss Federation'. A one-word name. So we've agreed on 'Czechia', let's push it, and it will eventually connect with Prague, which has a great reputation. Definitely. Well, maybe we'll still come to an agreement with Moravia, and Bohemia will still come. Then Silesia will come. No, that's too complicated. So, there is another question.

Yes, wait, one by one. I see you in the back.

I see you're not really using the platform, but prefer the old way. Okay.

Hello. Tomáš Morava, my name says it, so we can definitely agree with Moravia. I'd like to ask about language. Leon, you talked about a lack of capital or lack of capital for expansion. Is it more about the inability or legacy of our private investors, or a non-functioning capital market? What did you mean?

The question was about capital, sorry, the microphone was cutting out a bit.

Yes, well, it's a combination. I have the feeling that people here, whether banks or investors, private equity, are very conservative. And for them, the brand might be good, but ultimately it's about what you've earned. Sometimes there's a bit less heart here. But then with financiers, especially banks, when you're in risk, they don't even know what it's about. I don't know if it's different in other countries, but it seems a bit easier there. Then it's the overall size of the capital market. And also the ability of people in the firms to negotiate it, or maybe there's a lack of know-how internally. In family businesses, I don't think we have the absolute best people in all positions, and maybe that's partly our fault.

Pavel, what about the private sector? If banks don't function here, then private equity...

And a question from the gentleman in the back. Hold on a moment. You'll get the microphone.

Hello. I'd like to ask Pavel, because yesterday I read an interesting article with Pavel in Hospodářky, so the second generation sent an interesting article that you are a member of some economic transformation or something, I don't remember the exact name. I personally think, because I have experience from the world, from German-speaking countries, from English-speaking countries, that the Czech Republic is like a little Switzerland. We really have it damn good here. When you go anywhere, sometimes it's just gloss, sometimes you go to pee in shared toilets with women and so on. Now that transformation, that initiative — wouldn't it be good to push family businesses more into politics, into the brand, into 'Czechia' and so on? Because on a bag, 'Made in Sweden' or 'Finland' has a completely different weight than 'Made in Czech Republic'. Forget about the EU. So aren't there ways to push the republic like that?

Well, that's it.

That was about participation, employee involvement. It helps so that people can be directly connected to the company's economic benefit without unnecessary legal hurdles. That's definitely one good way forward. We've given many other solutions.

What holds us back the most here? I'll admit, I'm a Czech patriot, a family business, but now I'm a bit ashamed in front of you. Our next largest factory will be built in Poland because I simply can't build it here. Unfortunately, these are things we have to fight. That would take too long to explain. It's the building permit, taxes, it's a combination of everything. Above all, it's the time — the uncertainty of the outcome and the long process here will take several years more. In Finland, we managed to approve and build a factory. Today, Finns tell me: 'You were lucky, but the greenfield investment in Nokia we managed to realize in two years from the first plan to a finished factory that's producing.' That is absolutely, absolutely unreal in Czechia. In two years, we might just have the documentation ready.

No, you completely froze after Pavel said this. I now have the topic of where to produce.

We still want to produce glass in Czechia, because one of my personal missions outside the company is to save Czech glassmaking. In my opinion, these are real masters — they start at 4:30 in the morning, really everything, and they've been doing it for generations. If this disappeared, the country would be greatly impoverished. We receive absolutely no support from the state, from anyone. For example, in France, companies like Baccarat or Saint-Louis get grants. I'm not complaining, I'm against subsidies; they distort the market. But at least the Czech ones support three secondary glass schools in Kamenický Šenov, Železný Brod, Nový Bor, so we have young people, which is energy, which are innovations. We've overtaken Italy in innovation now. So in that respect, the state has a positive influence. But of course, energy was brutal here for a while, and glass needs a lot of energy. But whether it's flat glass or hollow glass, we keep it here. It costs us margin, but we believe it pays off for me personally in a good feeling of mission and it differentiates us in the world.

Excellent, gentlemen, thank you both very much. Thank you for your questions. Some of you will surely meet them during the break, which I don't know when it will be because we're running late, but it will be sometime. Thank you very much, Pavel, Leon. Thanks. Bye.