Interviews

“Tirana has been developing quickly into a digital hub in the Balkans”

FIAA: Lufthansa Industry Solutions is a leading IT company in the Albanian market. Could you tell us about this company’s business worldwide and the decision to enter the Albanian market?

Mrs. Shkurta: Lufthansa Industry Solutions is a service provider for IT consulting and system integration. As a subsidiary of Deutsche Lufthansa Group, Lufthansa Industry Solutions supports its clients’ digital transformation. Its customer base includes companies both within and outside the Lufthansa Group, more than 200 companies in various lines of business. The company is based in Norderstedt, Germany and employs more than 2,100 members of staff at several branches in Germany, Switzerland, the USA and since April 2019 in Tirana, Albania.

The decision to enter the Albanian market was made after carefully examining various models of cooperation with AMD, a specifically established German Albanian start up. AMD was founded on March 2017 and from the very beginning was providing IT services for Lufthansa Industry Solutions as a nearshore partner. The quality of work performed by AMD convinced Lufthansa Industry Solutions to officially take over this service provider in 15 April 2019. This was key to company’s strategic growth in response to the rising demand for IT services in the German, Austrian, and Swiss market.

2020 was an unusual year, did you experience any difficulties during your operations? How did you cope with “The Smart Working Mode”?

As an IT consulting company, fully integrated with our mother company, we have always been ready to sustain remote work while keeping in mind safety measures for topics such as data protection, information security, which for a company like ours are paramount. Our agile working methodology allows our employees a lot of independence and flexibility in the way they organize their working time or space without affecting quality and standard of service delivery.

Certainly, the sustained long-term lockdown did not find us unprepared. Our new offices at Arena Center have been designed keeping in mind all the regulations for health and safety.

How is the company performing? Are there any plans for further extensions?

The IT industry is the fastest growing industry in the market nowadays. As an IT consulting company, part of one of the leading IT consulting companies in Germany, we are always up to date with the technological trends. After a difficult year 2020, we are back on track to a growing path. Currently we employee more than 200 IT consultants and the plan is to grow by at least 30% during 2022.

We value the cooperation with universities and academies specialized in software training as well as intense in-house training and mentorship offered not only by the team in Albania but also through our colleagues in Germany.

What are your impressions of the current business-operating environment in Albania? What challenges are you facing?

The overall business-operating environment in Albania is relatively stable. Setting up and operating an IT consulting business is relatively easy from a perspective of capital investment as well as fiscal and regulatory aspects. Albania, particularly Tirana has been developing quickly into a digital hub in the Balkans. Five years ago, there was only one IT company with more than 100 employees, right now there are at least five in this range. The right synergy between private sector, institutions of higher education, particularly private ones, and the government, as well as logistical aspects of the business such as office locations or IT Network infrastructure all contribute towards growth in this sector.

The more attractive the sector, the higher the interest of young people to study on this field.

Our focus is to offer IT services to our home market; therefore, we do not compete for customers in Albania, rather for resources. Companies similar to ours might consider investing in personnel development and training, which is the source towards sustainable business growth and avoid artificially distorting the job market.

Another big challenge is the choice that some of our employees make to leave the country in response to the increasing demand in the global market for IT services.

What improvements in your business-operating environment do you think are important for attracting more foreign investors in Albania?

In our business environment there is no direct improvement that is needed, other than at a more strategic level, to increase young professionals’ confidence that there will be a better future in Albania for them and for their children.

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“We will bring to Albania the most advanced technologies available in the solar industry”.

FIAA: Voltalia chose to enter the Albanian Energy Renewable market in 2020. Could you tell us why in the Photovoltaic Energy? 

Mr. Mulliez: Photovoltaic is the cheapest way to produce electricity in the world and it happens that Voltalia is doing business in the renewable energy, which includes solar photovoltaic (and also wind, storage, biomass and hydro).

As Voltalia has entered the Albanian market during a very unusual year (2020), what were/are the difficulties you faced during this first year? What are the most significant project challenges that you have to overcome?

It was indeed dramatic for many people around the world, and we are confident that the vaccine will be deployed efficiently in order for people to recover their lifestyle, hopefully in a more transitioned. Getting back to Voltalia, for us, it was actually a year of great achievements where we managed to secure a triple 1 000. We reached a 1000 MW of installed capacity worldwide, 1000 MW of long term power sales contracts in 2020 alone and the total staff also surpassed 1000 co-workers. Particularly in Albania, we were awarded the Karavasta Solar project, a power plant of 140 MW that will harness the sun and convert it into the cheapest electricity available for the Albanians at 24.89 EUR per MWh. This is the result of a strong commitment from all and a good team-spirit despite the home-office. We were able to meet all requirements while administrations and offices were under lockdown and we are very proud to be in Albania today.

You are new in Albania, which are your impressions of the current business environment in our country? What challenges are you facing? 

With the Karavasta tender, Albania has shown once more that it was ready to welcome foreign investors. I have no doubt that the solar photovoltaic industry as well as the upcoming wind projects will continue to attract European and American companies in the country while the new power market unfolds. It’s an evidence to me. As far as other sectors are concerned, I see a lot of potential everywhere: ecotourism, agroforestry, education, health care and IT, just to name a few.

What improvements in your business operating environment do you feel are critical to attract more foreign investment in Albania?

Well, we have a policy to work with local companies each time it is possible and that’s exactly what we have been doing. On the other hand we will bring to Albania the most advanced technologies available in the solar industry. In the end, the Karavasta solar plant will be handed over to the Albanian government at the end of the concession and we must select the most long lasting equipment. Having said that and to answer your question more clearly, it is important for the successful unbundling of the Albanian power sector and the successful implementation of the new regulatory framework that the government observes the European Standards. The European standards in the electrical sector have proven to attract large investments in the EU where large player are now thriving. So why shouldn’t it be the case in Albania?

What are your investment plans for the next 2-3 years? 

My program for the 2-3 coming years is to effectively commission the Karavasta solar photovoltaic plant in time, budget and performance. In Albania, we are also working on additional opportunities, on which we adopted the exact same strategy as for Karavasta. Personally, I will also invest my time in recruiting and consolidating the local team at Voltalia Albanie, settled our corporate culture in accordance with Voltalia way of doing business and etc. That being said, we are recruiting! Our Concession agreement goes until 2053, so the 2-3 first years are key to the long term establishment.

“Part of our Mission is to act as a Start-Up for all other companies and investors to build a solid automotive environment in Albania.”

FIAA: SEWS-CABIND Group has recently entered the Albanian market. Could you tell us about the mission and operations of this company as well as the interest on the Albanian market?

Mr. Scarfalloto: SEI and SEWS-CABIND Group evaluated the possibility of expansion of the company in Albania from many years, many investigations have been done from our Group CFO Mr. Blanco and our Group CEO Mr. Ishii before to take final decision to move here. In fact, it is necessary to consider that before us, very few automotive companies entered in Albania territory and not in the same Group level like SEI, in terms of dimension and business.

At today, SCA is representing for SEI a big challenge from one side and powerful success from other side.

The main mission is to have a Plant with Sumitomo standard in a country where automotive business never was before and have a group of Albanian people (managers and all other levels) that can grow inside the company and be able in the future, not only continue the managing of company but also teach to future generation the Sumitomo spirit and production technologies.

The interest for Albania came not only from the economic aspect, but also from logistic perspective because of geographical position; position that represents for SEWS CA a real advantage considering that our customer is situated in Italy and reachable in 1 day of transport by ship.

Important to mention is also the common culture with Italy and knowledge of language.

FIAA: You have recently rebranded your business from Telekom to One Telecommunications. How is ONE performing in Albania?

Mr. Georgakiev: Yes, we have just introduced our new brand to the public. It took us more than a year of preparations and now I can confidently say that ONE Telecommunications represents a whole new identity, with new values and corporate culture that guide us in all our operations. At the end, those that benefit will be the customers and the society.

Our objective is to become the preferred operator of Albanians, that is why we are changing our approach to the market. We listen to our customers, then give them the communication solution they are asking for. For example ONE Telecommunications offers unlimited tariff plans and handsets on installments – both are products that address the needs of people and we did not hesitate to make them available, even be the first in the market in this regard. At our remodeled shops, everyone can find the tariff plan, the handset, or accessories that best meet their expectations.

Our commercial plans are backed by agreements with world leaders like Ericsson and Cognity Starlite Technologies for a complete renovation of our network and IT infrastructure. Today we already offer download speeds of up to 200 mbps in most of the country, 7 times better indoor coverage and a safe network.

From a financial point of view, we managed to change the declining trend of the company’s performance from previous years. 2019 saw an increase in our retail revenues and EBITDA and we expect 2020 to be a better year, even if only slightly than the last one. The main challenge of the coming months is to cope with the unpredictability COVID is causing in all sectors of business.

Reflections for the consequences and opportunities post COVID-19 Pandemic

In my opinion, it should be noted that Covid’s drama is a two-time world crisis:

Firstly, a sanitary crisis with major health consequences

Secondly, an economic crisis with severe consequences for the economy and poverty in a large part of the population. The second part of the crisis can kill even more people than the pandemic virus.

We are living in a period where big changes will take place, perhaps the greatest changes of modern times. The crisis has catastrophic consequences, but it will also bring radical changes to the economic model, providing opportunities for industry players in Europe and indirectly in Albania.

I would like to bring up the reindustrialization movement in Europe, which is often emphasized at the moment. The Covid-19 brought to light a major weakness in France and Europe:

Lack of local production for basic products such as masks or gloves, and even the basic molecule for paracetamol that is no longer produced and must be imported from China. This deindustrialization originated in the 1980s, with the onset of globalization that intensified in the 1990s and the creation of the post-industrial economic model in Europe.

“We have ambitious plans for our investment and we see the Albanian government as one of the closest partners to develop our strategy and business”

FIAA: Mr. Sun, this is your first year in Albania and also the first for the Geo-Jade Corporation. Who is GEO-JADE in China and where is your role consisting in the Acquisition of Bankers Petroleum in Albania?

Mr. Xingyun Sun: “Geo-jade Petroleum Corporation” is a company from China which has been expanding its investments remarkably in the last years. It was founded in August 1984 and is one of the first pilot enterprises in Hainan Province to launch public offering of stocks.  Geo-jade Petroleum Corporation is foraying into Oil & Gas industry, throughout overseas acquisitions of oil and gas assets. The Company has conducted a strategic transition, which has strengthened the company’s capacity for sustainable development.

Currently in Kazakhstan the company holds 100% equity in both Maten oil company and Kozhan company, which are oil producing operators. Since the establishment, the company has always operated fully in compliance with business laws, as well as honestly and trustworthy. Geo-Jade Petroleum has won the best practice in the Belt & Road award on “2014 China cross-border investment Golden Whistle Award” , the economic cooperation achievement award issued by “Silk Road Fund for Peace” , and has also been awarded  the “2016 top 100 enterprises in Hainan Province award” issued by “Federation of Hainan enterprises”.

As regarding to the investment in Balkan region, Bankers Petroleum is one of the most important Chinese investment and its now under the property of Geo-Jade Petroleum. We are very proud of our presence here with Bankers which is the largest taxpayer that represents 5% of Albanian’s GDP. Bankers has invested US$ 2 Billion in Albania, while more will be done by using modern technology and develop further the major asset of the country.

Basic RGB

“Important changes in the current business environment would be necessary to make Albania achieve in the near future double digits growth! “

FIAA: What are the core services that Deloitte Albania offers?

Mr. Caslli: Deloitte Albania offers a suite of exceptional quality services in Assurance & Audit, Tax, Legal, Financial Advisory and Consulting. Numerous private companies, non for profit organizations and public institutions rely on the opinions and judgements of Deloitte Albania auditors. Businesses from any industry can count on us to provide them with the most basic operational services such as bookkeeping and payroll; as well as less routine services such as advisory on M&A, valuation, debt and equity financing, restructuring, liquidation. Our tax and legal experts are leaders in ensuring compliance to and optimization of all applicable legislative and fiscal requirements, be they local or international. Another core service that Deloitte Albania offers is consulting in various areas – human capital, technology, strategy and operations.In a few words any business in Albania needs business advice to be able to offer top services.

“Shell wants to assist building a thriving energy industry in partnership with the Albanian Government”

FIAA: What is your role and background?

Mr. D’Souza: Earlier this year, I was delighted to be appointed as the Country Chairman and Commercial Manager for Shell’s activities in Albania. I have previously lived and worked in numerous countries around the world including in Africa, Asia and Australia across nearly all of Shell’s business’s: Upstream, Integrated Gas, and Downstream.

What are your impressions of Albania?

I was thrilled at what a beautiful and pleasant country Albania is to live in. The country has incredible natural beauty that will undoubtedly make Albania a tourist haven. But perhaps the most notable thing is the positive transformation we see in Tirana itself – improving infrastructure and a thriving atmosphere. From a Shell perspective, we are also committed to the development of this beautiful country.

What is Shell’s upstream project in Albania?

Shell is currently appraising an oil and gas prospect called Shpirag near the city of Berat. We operate under a contract with the Albanian government. As a part of that Shell puts significant amounts of dollars upfront to fund the exploration and development – with significant risk to Shell as it is exploration after all. In the chance that we are successful, the benefit is then significantly shared with the Albanian Government.

“As a small economy, although quite strategically located, stability remains crucial at all aspects, but more specifically as relates to laws and institutions”

FIAA: What is your impression of the current business investment climate in Albania?

“An independent, functioning and reliable justice system is a basic element required for all!”

FIAA: During the first four years of the operation phase of the Ashta Hydro Power Plant, what have been the most significant challenges that you have had to overcome?

 Mr. Dietmar Reiner:  We have invested more than 200 Million EURO until end of 2012 to build a state of the art Hydro Power Plant. VERBUND and its partner EVN were the first large–scale private investors entering the Albanian Energy Sector. Due to the difficult situation in 2008, the time when the concession agreement has been signed, it was agreed with the government to enter into a long-term power offtake agreement. This agreement entered into force in April 2013, until June 2016 KESH was the off-taker, but then it was transferred to OSHEE. In the last four years there were a lot of challenges in the Albanian energy sector, especially in the downstream business, with the difficult situation in the distribution system and the supply to endcustomers. These difficulties also influenced our business; we were mainly suffering from payment delays which created for some periods huge arrears mainly to our lenders. Due to the background of our shareholders as large public utilities in the energy sector in Austria, the understanding of the situation and our belief in the success of the necessary reform in the energy sector, we and also our shareholders and lenders kept calm and focused during this time.