Monday, Jul. 02, 1990
Many Happy Returniks
By Janice Castro
For some Western executives, investing in Eastern Europe is a way of going home again. Frank Czena of Los Angeles participated in the Hungarian revolution of 1956. When Soviet forces crushed the rebellion, Czena, then 20, escaped by slipping out the back door of his grandmother's house in rural Kunagota just as the Hungarian secret police arrived to arrest him. Now the owner of Iron Masters, a manufacturer of structural steel and decorative iron, Czena feels a swell of pride in the political and economic changes taking place in his homeland. Czena plans to take part by building a steelworks there, but he readily concedes that he is motivated more by patriotism than by his interest in profits. "To tell you the truth, I am willing to take a loss so that private enterprise can be established there," he says. "So many were killed. I am one of the lucky ones."
East European natives often enjoy important advantages over other Western businessmen. Besides speaking the language of their prospective customers and partners, many enjoy longtime links through immigrant communities to those who have recently taken power. Says Chicago businessman Donald Mucha, 58, who exports machinery components to his native Poland: "It's exciting to be on the inside of rebuilding a nation." Known as the returniks, these natives of Czechoslovakia, Poland, Hungary and other new bastions of private enterprise are helping manufacture consumer goods and build housing, hotels and department stores.
To provide his country with much-needed venture capital, Andrew Sarlos, 58, a Hungarian who is the head of a major Toronto-based investment group, has raised $80 million for the new First Hungary Fund. In addition, Sarlos and a group of other Hungarian expatriates bought a 50% stake in Scala Co-op, Hungary's largest grocery chain, and a 50% share in Budapest General Banking and Trust. Zbigniew (Dick) Niemczycki, 43, a Warsaw-educated engineer who moved to the U.S. in 1977, has returned to Poland as an executive with SerVaas, an Indianapolis investment firm. The company's joint ventures in Poland include a fishing fleet and a home-building enterprise, as well as Hanna-Barbera's largest animation studio, where Polish artists draw the cels for Yogi Bear and Flintstones cartoons.
Thomas Bata's visit to Prague last December at the invitation of the new Czechoslovakian leadership was a particularly joyful journey. At 75, he heads Toronto-based Bata Shoe, which made 300 million pairs of shoes last year. Founded in 1894 by his father in the Moravian town of Zlin, Czechoslovakia, the firm was nationalized by the Communists in 1945. The family moved to Canada and proceeded to build the world's largest shoe company.
On his return, he was greeted by Czech crowds chanting "Bata! Bata! Bata!" Local officials gave the Canadian industrialist a haunting tour of the giant factory that his late father had built. Dilapidated, the aging shoe factory still turns out footwear on the machinery installed by his family nearly a half-century ago. Bata plans to renovate the factory as part of a joint venture. Forty years after being driven out of his country, Thomas Bata is a returning hero.
With reporting by Dan Cray/Los Angeles and William McWhirter/Chicago