Miodrag Kostic, president of MK Group - I will turn Igalo into Morocco

(Miodrag Kostic)

Apparently, the Vojvodina "sugar king" will have a place to rest at the seaside in addition to the one on Kopaonik mountain, given that he has lately been mentioned again as a possible future owner of the Physical Medicine Institute Dr. Simo Milosevic in Igalo.

The story about the acquisition of this multidisciplinary treatment center started back in 2008, when MK Group was declared the best bidder, but the agreement was terminated. The Institute is now offered for sale by tender for the third time, with the deadline to submit bids expiring tomorrow, and Miodrag Kostic speaks about his intentions in an exclusive interview with eKapija.

Besides, he also reveals to us that he is not going to buy the domestic company he has been connected with in the media over the last few weeks, but he says he is negotiating a merger with a foreign company, with which he plans to conquer the market of Turkey.

eKapija: Is MK Group going to buy the Institute in Igalo?

- The fact that MK Group has for the third time bought the tender documentation for the sale of a 56.48-percent stake in the Institute of Physical Medicine, Rehabilitation and Rheumatology Simo Milosevic in Igalo proves our interest.

However, this time we compete with the renowned French company Vichy.

(Institute in Igalo)

eKapija: You had a partner the first time. It was the Swiss company HASS. Are you going to look for a partner this time?

- This time we compete alone. First time, in 2008, MK Group formed a consortium with Filip Zepter's company. However, the agreement was later terminated because the agreed sum was not paid within the stipulated time.

eKapija: Do you believe that MK Group really has the references required to run a health center? It seems that certain media in Montenegro do not favor you when it comes to this deal.

- Although the hotel business is not our core activity, the acquisition of Dr. Simo Milosevic Institute would not push MK Group into something unknown. Did MK Group have required references for mountain tourism in 2009, when it saved two hotels on Kopaonik from closing?

By privatizing them and investing EUR 12 million, we've created the exclusive complex MK Mountain Resort.

eKapija: In case you become the owner of the Institute, what are your further plans for its development? What can we expect in Igalo?

- The core medical activity would rely on amenities offering relaxation, healthy food, recreation, weight loss, rest... It would be something similar to what one can see in Morocco or Egypt, partially in Dubai as well. I am not going to reinvent the wheel. Guests should enjoy top service.

eKapija: Let us get back to MK Group's core business. You recently participated in the SCC Management Forum, where you spoke about the importance of mergers of regional companies in the food industry. Do you believe that the formation of such alliances is really possible?

- Regional business alliances are a necessity. If we don't join our forces, large players will come, and we will watch the game from the stands. In order to be competitives in the global market, you must offer a satisfying quality, price and amount of goods. I've just come back from China, where I presented a catalogue of products of Croatia's PIK Vrbovec in addition to the portfolio of Carnex.

I believe that agriculture is one of the key industries for further economic development and the biggest chance for the entire region. My opinion is that regionalization and closer business cooperation are more than required by the economies of all countries of former Yugoslavia. A mutual connection between strong regional companies is a necessity, especially considering the future big market, by which I primarily mean EU countries and Russia.

eKapija: Which companies has MK Group negotiated mergers with? Where do you see an opportunity for cooperation?

- We've been operating in eastern Europe for four years now, and given that the situation now is much more favorable than in the last few years, I cannot see any reason why we should not start and improve the business in the close surroundings as well.

I am happy to hear that Podravka has a company in Turkey, and I am very interested in entering that big and demanding market through that company. We all talk with each other and common interests connect us. The idea is to do 50 percent of business outside Serbia in the future, that is, in Ukraine, Slovenia, Croatia and Sudan.

eKapija: You announced for eKapija that MK intended to use part of the proceeds from IFC's loan of EUR 45 million to buy Zrenjanin-based IPOK, but that did not happen. How do you plan to invest the remaining money?

- It is true that we announced that we would use part of the proceeds of that loan to take over Zrenjanin-based IPOK. We planned to find partners for that takeover because it was a logical consequence of what we do.

However, market circumstances were not favorable at that moment. It is for sure that the loan we got from the IFC will be used to strengthen and expand the core business of MK Group, that is, food production - through investments in both production sector and several phases of processing.

eKapija: Will the acquisition of Zrenjanin-based Banat-seme maybe be among these investments, considering that MK Commerce has already rented the company's finishing center?

- No, although vertically integrated companies like MK Group often make parallel investments in operations preceding the primary production and those following it.

Milica Stevuljevic