Special steels, electronic gaming tables, skis, and pâtés are just a few of the products with which the Slovenian export companies have entered and now successfully perform in the American market. Among them is the world-renowned ski manufacturer Elan, which last year generated almost a third of its ski sales in the North American market; Studio Moderna, which has its own bed factory in the US, and the company Interblock, which supplies the entire North American region with electronic slot machines, to name just a few.
Another Slovenian company, TPV, a developer and producer of bodywork and chassis systems, car seat elements, and engine sealants, is also planning to expand operations to the US. TPV supplies eminent world corporate groups and manufacturers of the most prestigious brands of cars, such as BMW, Daimler, Volvo, Jaguar, Volkswagen, Brose, Benteler and Magna, mainly in Europe, Asia, and in South and North America.
We export more to the US than we import from there
The United States of America is the twelfth most significant foreign trading partner and the second most important export market outside of the European Union. It is interesting that since 2014 tiny Slovenia has held a positive balance in trading with the US, the world’s strongest economy. The fact that we export more to the US than we import from there can also be explained by the fact that recession forced Slovenian companies to stand on their own two feet and begin increasing their exports. Our balance in the US was also positive last year, when we exported 570 million euros of goods to the US and imported 380 million, which brought the foreign trade exchange between the countries close to a billion euros.
Slovenia mainly imports mineral fertilizers and processed petroleum derivatives from the US, whereas we export electrical machinery, mechanical and electrical machines and pharmaceuticals. The automotive industry by way of European companies is also important.
Although the trade in goods between the countries is not at a substantial level, a country like Slovenia with its small and open economy is extremely interesting from a strategic perspective, as emphasized by Branko Žibret, partner and Director of the consultancy company A. T. Kearney for East Europe.
“Slovenia is a country with an educated and expensive labor force which can succeed long-term by manufacturing products with an increasingly high added value. If we consider this to be the driving force behind Slovenian exports, it is crucial for us to cooperate with the world’s largest economy in exchange of goods, services and capital flows,” pointed out Žibret. This kind of opportunity was fully embraced by the high-tech company Dewesoft, a manufacturer of cutting-edge measuring technology solutions. Among those excited by this company’s technology is NASA, and their customers also include Space X, the Kennedy Space Center, Lufthansa, Bosch, BMW, and Audi, to name just a few.
Slovenian privatization and American capital
Despite the fact that Slovenia, with its population of 2 million, is a small consumer market and as such does not present an inflow market for foreign investments, it manages to attract investments since investors today seek safe countries. “When global companies make decisions about where to invest, they seek environments where political and economic instability is highly unlikely, and Slovenia certainly is one of these environments,” emphasized Branko Žibret.
In the past Slovenia predominantly attracted branches of large American ITK companies and pharmaceutical giants, but in recent years, American capital interests have been put into effect as part of the privatization of state-owned enterprises led by the Slovenian government.
By far the biggest American investment in Slovenia is the second largest bank, Nova Kreditna banka Maribor, bought by the American multinational investment fund Apollo Global Management. In 2015, the Slovenian ski manufacturing company Elan was bought by Merryl Lynch International and Wiltan Enterprises Limited and has now been put up for sale. The investment firm The Gores Group acquired the laser production company Fotono. Another American company worth mentioning is the family owned Weiler Corporation, which in 2015 took over a Slovenian abrasives manufacturer.
The first contact American investors have with Slovenia is often the Bank Assets Management Company, which manages a quite diverse investment portfolio worth a little over a billion euros and which is comprised of non-performing assets taken over from the Slovenian systemic banks. Among them are, for instance, financial claims (€721 million), residential and commercial real estate (€192 million) and ownership interests (€99 million).
“The Bank Assets Management Company enjoys an enormous amount of trust among international investors, which is something of which they are fully aware. With its performance, the Bank Assets Management Company has built a reputation of being the reference company for effective management of non-performing assets, which was confirmed with the company’s excellent business results. Additionally, the Bank Assets Management Company is considered an adaptable, agile and transparent institution, which follows the strictest international codes effective in all aspects of the management and sale of assets, “was emphasized by a Bank Assets Management Company representative.
Slovenian companies are known for their innovativeness
Sandi Češko, the Director of Studio Moderna, is also convinced that Slovenian companies could better exploit the opportunities in the American market. Today, the distance between markets is no longer an obstacle and Slovenian companies are known for their innovativeness and a well-educated workforce and the best markets for innovative companies are those that are the most competitive,” emphasized Češko. The American market is also the most organized in the world and it is the proper functioning of the rule of law that is of key importance for a small company wishing to expand:
“In Europe, Slovenia is perceived as a great subcontractor country and it’s hard to get rid of this label. Americans are unaware of this and so are interested exclusively in the quality and benefits of your product or innovation. Capital is available to anyone and investors are willing to take more risks. To sum up, I believe the perception of the American market is completely false and this explains why young Slovenian businessmen who are not restricted by stereotypes are more successful in the US than in any other markets,” added Češko.