The adhesive manufacturer Tetragon is the first company in Cacak and one of the rare companies in Serbia to get money and subsequently expand its production by selling a part of its capital to a foreign investment fund.
Tetragon has a long tradition in producing adhesives and was looking for support to expand its production for a long time, without success.
Things changed last year when they reached an agreement with the investment fund Seaf, which received a minority capital share in the company in exchange for taking part in equipping the hall.
– We've used the cooperation to purchase the hall in order to expand the production. The hall was completed with their help. There were big administrative issues initially, primarily with banks, as they look into who the original owners are, probably in order to prevent money laundering – says Dragan Markovic, director of Tetragon.
The Seaf fund consists of Opportunity Bank, the International Bank for Reconstruction and Development and USAID. As Markovic says, they mostly do not interfere with the business policy, but bigger payments still require approval.
– As they participate in the ownership, they want to control how the money is spent. They don't interfere with the business policy, they're very fair and we've already become friends. If payments over EUR 10,000 are made, they want to know about it and their sub-signature is required, which we don't have a problem with. We are a serious company, we don't spend money irrationally – Markovic explains.
Tetaragon is one of the rare companies in Serbia to get to necessary capital this way. The reason is that the market is small and that the status of investment funds is still not regulated by law in the country.
– Serbia is a small market, so the funds that come here focus on one industry, one core activity. It's important for the company to have good business results in the preceding period, that the ownership structure is such that a good agreement can be made and that there is exporting potential – says Vladimir Pavlovic, an economics adviser.