Article in management magazine18 Jun 2019 21:18
Kosovo does not scream business opportunity.
With a population of just under two million, the post-conflict Balkan nation has only existed since 2008 and has a reputation for corruption and high unemployment.
But Chris Gilbert, CEO of Fox Marble Holdings, wants to change that image. In 2011, alongside business partner Etrur Albani, the former entertainment entrepreneur established the AIM-listed marble quarrying company with the specific purpose of operating in the country.
Kosovo has a long history of marble processing, but its deep resources have lain untapped since the collapse of the industry since the 1990s conflict, and the two wanted to exploit this rich opportunity. The company now holds 40-year mining licences for six separate marble quarries across Kosovo and Macedonia.
"This would not have worked if I were not in partnership," says Gilbert, highlighting that Albani’s local connections were crucial for getting the ball rolling.
Having previously run one of the biggest companies in the country, the state-owned telco PTK (Kosovo’s equivalent of BT), the Albanian-born Kosovan is "highly politically connected" with decision makers on the ground.
An agreement was made with the Kosovan government that, if Fox could bring a publicly listed company to the region to act as a seed for future foreign direct investment, and provide jobs to local workers in the region, it would be given licences to initially open five mines.
Gilbert insists that the company still pays the same taxes, royalties and license fees that they are expected.
A POINT OF DIFFERENCE
Kosovan marble offers huge potential, says Gilbert. The margins are "spectacular", potentially as high as 70 per cent once Fox achieves sufficient scale.
"We are a third of the price of Italian marble because extraction and labour costs are so low. So we are very competitive," says Gilbert.
Fox’s business model is based around three types of product: block marble, slabs and cut-to-size, which it sells largely through a network of wholesalers or installers. It’s a sticky supply chain that once you’re locked in, offers suppliers a steady stream of orders.
"If you start supplying a 300-bedroom hotel, they are not going to turn around at bedroom 150 and say you know what, we think we'll do this in a different colour," says Gilbert.
Unlike other mining industries, the global market - worth an estimated €25.7bn in 2015 - is highly fragmented, dominated by a large number of longstanding and somewhat mysterious family businesses, which gives Fox, with its listed status and Kosovan stone, an opportunity to stand out.
"As a British plc we bring a different sensibility to this industry," says Gilbert.
However, getting the market to look past its perceptions of Kosovan sourced marble has been a significant challenge.
"We were in marble, which people didn’t understand because there is no listed marble company anywhere in the west, so we had to overcome a level o
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