Interview with Milan Mackovich, Director of International Business Development, DefTech
Q: Give us a brief history of your company and its milestones.
MM: The history of DefTech has been written since 2014. We are part of the holding and modern technology park in Vlkanova. The company was first involved in the production of drones and some electronic solutions, and about 5 years ago we started to profile ourselves as a research and development company in the field of armoured vehicles.
Q: When, why and with what product did you start to consider expanding into foreign markets and in what territories? What opportunities and challenges did this bring you?
MM: We have three basic models of armoured vehicles. One is a transport vehicle that can also serve as a military ambulance, a command communications vehicle, a reconnaissance vehicle, and so on. The second is a ground fire support solution and the third is a unique comprehensive mobile anti-drone and air defence solution. The fact that we are trying to export follows from the logic of the matter, because just as Slovakia is an export economy, Slovak companies have to look around the world for customers in addition to the domestic market.
Q: What are the specifics of the territories you export to?
MM: Different, depending on the region, of course. I have to say that within the European Union, business is on a completely different level thanks to the approximation of regulations and law. It is very efficient and easy compared to, for example, some African countries or Middle Eastern countries where there are different regulations or different export-import policies. So we have to respect all that.
Q: Do you have a different business strategy in domestic and international markets?
MM: I have to say that the business strategy of our company is that we listen to our customers. We try to listen to their needs and the solutions we offer to our customers are based on that, because one of our vehicles can be a pure transport vehicle, but it can also be, for example, a military ambulance or a communication centre. Therefore, we first have to listen and understand the needs of the end user and from there the solution and its final configuration is determined. That is our business strategy.
Q: Which products are the most successful in your portfolio? And why?
MM: So far, we have managed to export classic armoured personnel carriers that meet the customer’s requirements in terms of quality and we are the only manufacturer in the region with experience of real combat deployment. However, I would like to take this opportunity to highlight the unique solution that our company offers together with our strategic partners. It is a mobile anti-drone and air defence system, the so-called counter-unmanned aircraft system (C-UAS). It is a vehicle that can protect military convoys. It can also participate in the air defence of critical infrastructure, such as nuclear power plants, important energy transport hubs or even water sources and dams, for example.
Q: What are the most common challenges you face when exporting (e.g. regulation, logistics)?
MM: Like all exporters, we first have to learn the rules of the territory we want to export to. As I mentioned the European Union is a very standard and stable environment. However, when we go to the Middle East or Asia or South America, some of the rules and regulations are completely different. Often it is also related to more complicated logistics and sometimes customs barriers. However, these are obstacles that every exporter faces and can be worked with when the business is set up well. The company studies and prepares these things and then it is possible to trade with practically the whole world.
Q: How do you assess the competition in international markets and how does your company differentiate itself from it?
MM: The competition is huge globally. If we look only at Slovakia, there are three manufacturers of armoured vehicles in Slovakia. The only thing we can differentiate ourselves with is really sophisticated solutions that come from advanced design and construction features. We also have to, as I have already mentioned, listen to the customer, take feedback and improve the products on that basis. We are certainly different from our competitors in that we are a very flexible company that is not afraid of quite deep customisation (note: adapting the final solutions as much as possible to the needs of the end user).
However, we differentiate ourselves mainly in our unique counter-unmanned aircraft system (C-UAS) mobile air defence solution.
Q: How have your export activities changed in recent years, especially in light of economic and geopolitical challenges?
MM: The geopolitical and security situation is not entirely simple. And it is not very stable either. Different regions are taking different paths. There are conflicts. Our neighbours in Ukraine have huge problems. There are conflicts in the Middle East. All of this certainly has implications for the export policies of every exporter in Slovakia, but also in other countries. We also try to be in close contact with colleagues, for example from Eximbank, with whom we discuss various topics. We are also in contact with colleagues from the Ministry of Foreign Affairs, the Ministry of the Economy and, I must say, the SARIO agency is also very helpful to us. We are grateful for that, because we are also listening to and learning from colleagues from these institutions.
Q: Which countries do you see as promising and what attracts you to these markets?
MM: They are definitely our eastern neighbours. It’s also regions like the Middle East, Asia, but also South America. We try to choose countries and regions that are stable and respect all the embargoes and export restrictions of the European Union, of the United Nations, but also of our allies like the United States. By far we avoid unstable and untested partners and countries and try to be a truly standard, transparent exporter.
Q: How do you manage export risks?
MM: Risk management is not very easy, because none of us know what will happen in the world tomorrow. That’s why we try to form partnerships with stable standard countries, institutions, and also with local partners that we have vetted from practice, that we know exist, that they do business, that they have the experience that they declare to us. We certainly avoid the various, let’s call them briefcase companies, which offer everything and nothing.
Q: What is the long-term vision for your company in global markets.
MM: Our vision is based on what products we offer to the world. 99% of our customers are the armed forces of a particular country. So our vision is based on what kind of equipment they use, what is the lifespan of that equipment, what are their plans for future purchases, their specific budgets and needs. For example, we all see the use of drones coming to the fore. So we expect that area to develop. And there will certainly be purchases of anti-drone systems. So our export strategy is really about knowing the territory and also knowing what the partner is using and what they will need in the future.
Q: Can you tell us some interesting situation from your export history?
MM: One sees and encounters many interesting and beautiful things in the world, but also many unusual things. For example, it happened to me that I waited two days for a meeting in a country in the Middle East. I got that meeting, it took place, the contract was signed and the whole thing came to fruition. But I had to wait two days for tea. Or in the United States, the former founder of the prestigious TopGun flight school flew us in a private military trainer to a private airport for a technical meeting. One encounters such situations too. It’s an experience to last a lifetime and a nice change of pace in your daily routine.
Q: Tell us what makes a good leader?
MM: Very good question. I personally believe that behind a good leader is good communication. A good leader has to be able to communicate in such a way that he or she does not create any obstacles in the external environment of the company that might not arise. And also good internal communication within the company. Communication must be open and honest. A good leader should also be able to praise people, both appreciating and rewarding, but also being completely open about what is not good and what needs to be changed and improved completely indiscriminately.
Q: What would you recommend to Slovak entrepreneurs who are just about to export?
MM: Based on over 20 years of experience, I can certainly recommend that they be bold. To be confident, because Slovakia has a lot to offer. For example, the engineering industry and the defence industry. We often think that we are a bit worse than those who claim to be the best and it is not so. So learn, get to know the countries, ideally know the languages and be able to respect cultural differences. It simply takes courage and perseverance and success must come.
Thank you for the interesting interview.
Photo source: spol. Deftech
Source of the portrait: Eximbanka (photographer: Lukáš Klčo)
