bne IntelliNews – Serbian ‘sugar king’ becomes bank tycoon
Sberbank Europe agreed earlier this month to sell five units in the Central and Eastern European region to AIK Banka of Serbia, Gorenjska Banka of Slovenia and Agri Europe Cyprus. The man behind the acquisition of the regional units of the Russian bank is Miodrag Kostic, the Serbian tycoon known as the “sugar king” but who is increasingly moving towards the banking and banking sectors. the hotel industry.
But who is Kostic? The 62-year-old businessman was born in Vrabas, Yugoslavia, in what is now the Autonomous Province of Vojvodina, in northern Serbia. He started making money at the age of 15, carrying bags of cement. He joined the Communist Party of the former Yugoslavia two years later, but is a strong advocate of private affairs; he pointed out that the private is always better than the public.
Kostic graduated from the Faculty of Economics of the University of Novi Sad in the Department of Information Technology in 1983, starting his own business in the same year, a trading, import-export and manufacturing enterprise. In the mid-1990s this evolved into the MK Group, which today employs over 6,000 people in Serbia and South Eastern Europe.
It was an era of war and political turmoil in Serbia as the government in Belgrade attempted, unsuccessfully, to maintain control over the other Yugoslav republics and Kosovo. For a while, Kostic was involved in politics. From 1990 he financed the reformists, and from 1996 until the overthrow of Serbian dictator Slobodan Milosevic he was the general manager of the Democratic Party of Serbia. âThe fight against Milosevic really cost me dearly, both privately and financially and healthy,â Kostic said in 2004, quoted by Vreme.
Kostic was a close friend of the late Zoran Djindjic, the former Serbian Prime Minister who was assassinated in 2003, and was one of six men who carried the coffin of the slain prime minister out of Saint Sava Church.
After the democratic changes in Serbia, the MK Group has grown steadily. Since 2000, MK Group has managed sugar factories (Pecinci, Vrbas, Kovacica factories), more than ten food companies, shopping complexes and warehouses. It was around this time that Kostic earned the nickname “King of Sugar”.
In the following years, MK Group grew and developed so that in 2017 the group consisted of 29 companies – among which the meat processing company Carnex Vrbas, the sugar producer Sunoko, the Agroglobe trading company, the PIK-Becej agricultural company and others – most of which are in Vojvodina, whose fertile land makes it the main agro-industrial site in Serbia.
In addition to strengthening the group, over the years Kostic has also strived to improve corporate governance, which has helped the group secure a stake in the European Bank for Reconstruction and Development ( EBRD) – the first development bank in primary agriculture in Serbia. . âTen years ago, we didn’t know about corporate governance. It was like a different language. However, this is the language that investors speak and so we had to learn it, âKostic said at a conference in 2014.
In recent years, MK Group has expanded its activities from agro-industry to wholesale trade, hospitality and banking.
In 2009, the MK group expanded into the tourism sector and founded the company MK Mountain Resort, owner of the Grand Hotel & Spa in Kopaonik, the main ski resort in Serbia. With the subsequent establishment of the Istrian Hotels MK group, the hotel portfolio was extended with the 88 Rooms Hotel in Belgrade (later sold to Arena Hospitality Group) and the Kempinski Palace Hotel in Portoroz, Slovenia, minority-owned by Budvanska Riviera Hotel in Montenegro, and a cooperation has been established with the Sheraton hotel chain, which opened in Serbia in March 2018. The youngest member of this company is the luxury resort Skiper Resort in Istria.
At the start of the pandemic in March 2020, the Kostic hotel in Novi Sad was handed over to the Milan Jovanovic Batut Institute of Public Health, and MK Group donated to the Torlak Institute of Virology, Vaccines and Serums. , which now produces the Sputnik vaccine. . MK Group also helped Croatia after the devastating earthquakes of 2020.
From beets to banks
The three financial institutions that took over the five units of Sberbank in the EEC region – AIK Banka Srbija, Gorenjska Banka Slovenia and Agri Europe Cyprus – are interconnected parts of the MK group’s business empire. Although the statement did not release the amount of the transaction, it is certain that it is one of the most important acquisitions of all time in the former Yugoslavia.
But that was just the last deal for Kostic’s companies as he built a banking empire.
It started with the takeover of Serbian bank AIK (an acronym for Agroindustrijski kombinat Nis), a Serbian blue chip that was one of the most traded stocks on the Belgrade Stock Exchange at the time of investment in 2014. The acquisition was made through the Sunoko sugar plant, controlled by Kostic.
Two years later, Kostic started to take a stake in Gorenjska banka, a small private bank in Slovenia, which it finally acquired in 2019. This agreement was particularly important because it made AIK the first Serbian bank to enter. on the European Union market.
In Serbia, Greek bank Alpha Bank sold its local Alpha Bank Srbija operation to MK Group, as Greek banks pulled out of the Balkan region. He was among those interested in acquiring Serbian Komercijalna banka before its privatization, although the bank was eventually sold to the Slovenian NLB. In June 2020, the MK group of Kostic finalized the process of purchasing 67% of the shares of the Victoria group and, at the same time, the group finalized the acquisition of the Slovenian subsidiary Heta Asset Resolution.