Andjelko Trpkovic, CEO of the Belgrade Fair

Balkans.com: How long have you been at the helm of the Belgrade Fair and what changes have you made to the way this key city asset is run?

Belgrade Fair: It’s always a problem, and especially in Serbia, when you want to explain what you’ve changed. I think the change is visible, both for the exhibitors and the visitors. Of course, at the end I always want to say thanks to the Arabs for inventing the figures that we are using and the Venetians for inventing money, because it’s easy to count change in figures and cash without any emotional involvement.

All told, we have almost doubled our turnover since we started five years ago with turnover of almost nine million euros per year; now we have turnover of almost 17 million euros annually for the company. This is very important for the company, because – as people should know – we are still a socially-owned enterprise and such enterprises do not exist anymore even in Serbian law, so we are operating under very strange conditions and in a very strange environment, but we are trying to do our best to increase our business as and when it is possible.

In terms of figures, back in 2005 the total rented space for all exhibitions at the Belgrade Fair was somewhere around 130,000m2, while we finished 2008 with 230,000 m2 for all exhibitions. As such, we can see that we’ve done a lot in our core business.

One thing that’s crucial for us is to present the Belgrade Fair as the absolute best hub for international business – not only in Serbia, but the whole of the Western Balkans. As such, we’ve done a lot on the international scene in the last five years, working with companies that are organising fairs and companies that are exhibiting at international fairs to help them recognise the Belgrade Fair as a possible place to present their company – not just to the Serbian market, but to the markets of Southeast Europe. 

 

Balkans.com: The Belgrade Fair should be a dream, shouldn’t it? Strategic location; acres of downtown riverside space; landmark buildings and a virtual sector monopoly. Yet it seems to be struggling to turn a profit. How come?

Belgrade Fair: We are making a profit and in the last five years we have increased profit from somewhere less than one million euros to now over two million. Another specific development of the Belgrade Fair is a fall in the number of workers. Five years ago we had precisely 260 employees and now we have 217. It’s very rare here to see a state-controlled company decrease its number of employees without any problems, but we’ve managed that because it’s just been a case of not replacing those heading for retirement. We believe that we need somewhere around 180 or 190 full time employees. However, we are in a service industry where it’s more a case of not enough work as opposed to too many workers. If we can organise 40 events a year, as we do now, then we will need all of our staff and won’t be thinking about how to decrease the number of employees.

One part of the question that I don’t agree with is the suggestion that we have any kind of a monopoly in our sector. We are just one possible solution for companies seeking to present their products to the market and the media; we are just one segment of the marketing mix. They could use a TV commercial, organise a PR activity, use billboards, the print media or any other means of promoting their products and services before considering the fair. One thing we are fighting for is our influence on the market and at this moment I can say proudly that the Belgrade Fair controls 62 to 65 per cent of the fairs and expos market in Serbia. However, here in Serbia that’s kind of a strange sector because even the local honey fair is included. When it comes strictly to real trade fairs, I think we control close to 80 per cent of the market. So, we are fighting for our position, which would not be the case if we enjoyed a monopoly. This is especially the case now, with the crisis prompting exhibitors to take less space to exhibit or to limit the number of fairs they appear at. That said, in financial terms we are at exactly the same level as we were in 2008, which was the best year of the Belgrade Fair ever.

 

Balkans.com: The Belgrade Fair hosts many international trade fairs, sector-specific exhibitions and major concerts, as well as being home to numerous traders in the bazaar. What is your main focus and which events would you single out as the annual highlights?

Belgrade Fair: We are organising almost 40 events per year, but the number is not so important. What’s important is how many of our fairs we can count as being regionally recognised as one of the top opportunities for representation. I believe that we have six exhibitions that are without a doubt regionally recognised. These are: the construction fair, the technical fair, the car show, the book fair, the furniture show and the tourism fair. 

In these segments we are in the best possible position in the Balkan region. For instance, when you compare the figures of the Belgrade Construction Fair to any other construction fair in the region, or indeed in the whole of Europe, you will easily see that ours is one of the best. It covers 39,000m2, 1,100 exhibitors, more than 55,000 tickets sold per show. This is a fantastic opportunity.

Second is the car show. People forget how important international automotive expos are, but we are a member and licence holder of the International Organisation of Motor Vehicle Manufacturers, OICA, and they are supporting some shows worldwide. Of all the countries in the world, only 20 have the right to organise international motor shows and Belgrade is one of them. This year, because of the crisis, just 16 are being held and two shows that were having big problems – Amsterdam and Barcelona – organised their car shows in different ways, so of the 14 full car shows for the whole world this year, one will be in Belgrade. I believe this is something fantastic that we should be proud of, especially because the general manager of the Association was at the opening ceremony: he came to Belgrade to support us and was absolutely amazed by the quality of the show. Now people are wondering how it’s possible to organise such a big show in one small market like Serbia and one relatively small fair – compared to the world’s biggest – in a city where you can only find 3,500 hotel beds! That’s why we are proud of the Belgrade Car Show.

The Technical Fair is also very important, because this fair is the mother of others. At the very beginning of this fair’s life at this location 54 years ago, we started with the technical fair and now many other fairs that we have are derived from the Technical Fair: construction, furniture, car show – these were all parts of the Technical Fair. In the meantime, we switched our technical fair to industrial production and robotics; what we call Intega – integrated factory of the 21st century. This means that we shifted focus from everything that you plug into a wall to innovations in industrial production.

Our fourth highlight is the Book Fair; the miracle of Belgrade and miracle of Serbia. If we came up with the idea now, at this time, nobody in Serbia could guarantee that we would stage an event that would attract 150,000 visitors every year. The Belgrade Book Fair has been running for 54 years and, in figures, it is the second largest book fair in Europe. The Frankfurt Book Fair is the leading book show in the world. Everybody who’s anybody in the book world goes to the Frankfurt Book Fair and they have around 300,000 visitors. The next after Frankfurt is Belgrade with 150,000. Leipzig has around 120,000, Paris attracts less than 60,000, the London Book Fair has less than 50,000. My colleagues from Vienna will probably cancel their book fair next year because they don’t have enough economic interest. Our influence may not be as high as that of other fairs, because we’re dealing mainly with books published in Serbian, but in terms of figures we are the second most attended book fair in Europe.

The main difference between the Frankfurt and Belgrade book fairs is emotion. The Frankfurt Fair is strictly business: buying and selling rights; corporate promotions; all business. The Belgrade Book Fair is much more emotional: we invite famous writers to meet book lovers; we have a guest of honour country and allow all attendees to interact.

As an example of the difference between Frankfurt and Belgrade, I will simply say that the guest of honour pays more for their stand at the Frankfurt Book Fair, while our guest of honour gets their space for free.

The Belgrade Furniture Show, held each November, is by far the best furniture fair in the region and the furniture industry is very important for this region – simply because it’s a developed industry here and when you’re going through transition and people’s earnings are increasing, furniture is among the most popular purchases made.

The Belgrade Furniture Show has an average of more than 80,000 visitors each year, which is fantastic for this kind of event.

The final annual highlight is the Belgrade Tourism Fair. Six years ago we established the Belgrade Tourism Fair with just 400m2 of space, but last year we finished with 14,000m2! That’s the popularity of this show. We also like the tourism shows because they present an opportunity to travel without a passport, which is important for people from Serbia. Come to the Belgrade Tourism Fair and visit 40 countries without ever leaving the country! The Tourism Fair also has a wonderful atmosphere, because tourism is more than business; it’s about selling an idea of travel and promoting your country.

The Tourism Fair is also growing. Last year we had a visit from the Syrian Tourism Minister, which was fantastic. If even far off Syria recognises the importance of appearing at the Belgrade Fair, we must be doing something right.

Local tourism destinations are also well presented, including former Yugoslav countries, Greece and Turkey, Egypt and Tunisia, etc. My personal favourite is always the Brazilian stand, because they bring some music and some dancers and create a party atmosphere.

One of the most important aspects of the Tourism Fair is domestic presentations. Five years ago there were only a handful of municipalities that understood the need to participate in the tourism fair and understood that the main tourists in Serbia are actually from Serbia. Now many more understand this and if you go to Hall IV during the tourism fair – where all domestic tour operators and presentations are hosted – you’ll be surprised by the number and quality of presentations.

 

Balkans.com: Should we be looking at the fair as an indirect generator of income for other sectors, as opposed to being a generator of income in and of itself?

Belgrade Fair: Of course, that’s the name of this game. The aim of the fair industry worldwide is to see how much money we can bring to the city and state we represent.

The reason Germany is the leading country for fair exhibitions is that their philosophy is to bring potential clients, partners and sellers to their ‘showroom’ to showcase goods and services and their showroom is the fairs and expos industry.

If only one fair in the world were to make a profit each year, then it would be the Frankfurt Fair. All other fairs might have big losses, but their owners realise the indirect income of the fair for the city, region and country. 

Fairs are an engine for the creation of jobs, trade and production. I believe that the Belgrade Fair has created a turnover of about €200 million for the City of Belgrade and offered around 5,000 working places. For instance, during the Construction Fair there are 1,100 exhibitors who have to build their booths and we employ people to do that. Then there are the presentations, and here hundreds of young workers are hired to work as promoters on the booths; then there are media presentations, PR activities, etc. – this means that thousands of people have direct employment interests in us developing our fair industry portfolio. This is not to mention the indirect advantages to hotels, shops, restaurants, taxi companies, etc. There’s no doubt that the fair industry is a major engine for a city’s economy. 

  

Balkans.com: This summer’s privatisation tender failed. Are plans to privatise the fair now cancelled entirely or simply put on hold?

Belgrade Fair: I think they’re just put on hold, as it’s a constitutional obligation to transform all socially-owned enterprises to private ownership, so I believe it’s just been postponed for the next few years.

One thing that we are trying to do during the whole privatisation process is not so much to sell the company, but to emphasise the importance of finding a strategic partner that would help us to develop the Belgrade. Not per say because of the Belgrade Fair itself, but rather because of all of the aforementioned direct and indirect advantages of the fair.

One thing that’s crucial to us in the coming period is internationalisation of our activities. When my colleagues abroad ask me what my biggest problem is, I always say that my biggest problem is the fact that I have the second biggest book fair in the whole of Europe and nobody has ever heard of us. We must first work on ensuring that people know what we are doing and the quality of the shows we stage, which is why we’re seeking a serious international partner that can help us, through their network, to increase knowledge about the possibilities offered by the Belgrade Fair in this part of Europe. That’s why we view this summer’s failed privatisation as a missed opportunity to take advantage of, and further advance, this fair, which is already in a far better position than any other fair in this region.

   

Balkans.com: Hall One of the Belgrade Fair is a listed building, but some argue that halls Two and Three should also be protected. Do you have any plans to redevelop the fair?

Belgrade Fair: It’s necessary to redevelop. I believe that if you want to protect something it will become a monument and no business is done in monuments; monuments don’t create jobs and promote industry. I am clearly on the side of the fair business. If we have some halls that represent some achievements of Serbian engineering and architecture then that is fantastic and we will do all we can for that.

When people argue that we are failing to protect the fair, I like to compare the state of the Belgrade Fair when we took it over five years ago. We have spent €15 million to increase the level of the quality of the halls and now it is claimed that we have something against these buildings, which are actually the venues doing the business for us. These buildings are crucial for our future existence, so we are really focused on preserving all of the benefits of those halls, while redeveloping to ensure we can offer our exhibitors and visitors a better quality facility.

In 1957 this fair was built according to the highest standards of the age. However, we are no longer living in the same century and in the 21st century there’s a need to accommodate people better. For instance, I always apologise to people with special needs, simply because the Belgrade Fair has literally thousands of steps and stairs of all shapes and sizes. Whenever we make any changes for an event, we always try to put in a ramp or lifts – anything to ease the access of wheelchair users. A 21st century facility also needs air conditioning – not because it will help you sell more, but because people expect it. An investment to install air conditioning in halls one, two and three would cost €3.6 million…

These halls were built to house trade fairs and that’s what they should do. They shouldn’t be reserved for people to walk around in awe at the 5,290 windows making up the roof of Hall 1.

      

Balkans.com: How has the global downturn affected the fairs and expos sector as a whole, and how has it affected your plans?

 

Belgrade Fair: If you want a precise figure then it’s 20 per cent. It started at about 10 per cent, then by the middle of the year it had reached 15 and by year’s end it will be around 20 per cent. The reason for this is very simple: if you have to cut some costs as a company CEO, the first place you make cuts is on the marketing side. Then, within the sphere of marketing activities, the question is what the most expensive and most difficult part of your marketing activities is and the answer is fair presentations. It’s not just a case of paying for the space and coming to the fair; the preparation for an exhibitor is very intensive. So, when marketing budgets are reduced, fair presentations are the first to get cut. Some companies cut some of their fair appearances; others cut the size of the space they use for their exhibition.

As the Belgrade Fair alone, we have had very good financial results because we are cutting our internal costs in line with our exhibitors cutting their own costs. In the first eight months of this year we recorded profit of €2.2 million and up to the end of the year we expect profits to decrease but to still be close to €2 million, which is fantastic for a year like this. 

In terms of events, the only small cancellation is the textile show, but that is not so much related to the crisis as the textiles industry has been suffering for years. Crucially, all of the big fairs are being staged with the same number of exhibitors and the same space as last year.

 

Balkans.com: What goals and benchmarks have you set for the year ahead?

Belgrade Fair: Our goal is to earn one dinar more than last year. If we manage that, everybody will be very happy because it will mean that we are continuing to grow.

The Belgrade Fair is growing by something like 15 per cent annually and if we can maintain a stable turnover of €16 million this year I’ll be satisfied. However, this is not the end because the fair industry is always six months ahead of real time and when we start selling space for next year’s shows we will be doing it at the worst possible moment for the industry.