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Business Observer Friday, Sep. 5, 2014 4 years ago

American Dreamer

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A swashbuckling businessman with a made-for-the-movies life story has plotted a large expansion on the Gulf Coast. It's a $10 million initiative.
by: Mark Gordon Managing Editor

Armed with only an expired passport and cross-country skis, Boris Miksic made a daring escape from his homeland, Croatia, in early 1974.

Miksic, who joined fellow college students in anti-communist protests against Yugoslavia, the ruling republic over Croatia, skied his way to freedom in Austria. The biggest delay: avoiding landmines.
Once in Austria, Miksic reunited with his then-pregnant wife, Olga, who also fled Croatia. The couple sold their car for $400 in Austria, money they used for one-way plane tickets to the United States.
They had $37 left after paying for the tickets.

Those were the early days of what has since become a 40-year business odyssey that's taken Miksic from New York to Minnesota to Manatee County. There was also the stop along the way to run for president for Croatia.

“Boris has always had a determination to control his own destiny,” says Eric Haugen, a Minneapolis patent attorney who has worked with Miksic for years. “There is a sprit in him that led him to come to America, and he's never laid back and become comfortable, despite his successes.”

The heart of the Miksic business story is Cortec Corp., which manufactures and supplies corrosion protection chemicals for a variety of construction-related and industrial businesses. Miksic founded Cortec in his garage in St. Paul, Minn., in 1977. It has since grown to eight locations worldwide, from Canada to Brazil, with around 300 employees and more than $100 million in sales. Miksic won an Ernst & Young Entrepreneur of the Year award in Minnesota in 2000 for Cortec's growth.

Even with that success, Miksic, 65, isn't ready to coast into retirement. Instead, he will spend at least $10 million to open the Cortec Biotechnology Campus in a Manatee County industrial park, a few miles north of the Sarasota Bradenton International Airport.

The facility, in a 33,335-square-foot building, will be a manufacturing plant for some of the firm's patented products. It will also be a distribution center, Miksic says, for Cortec clients in the Southeast U.S. and the Caribbean. Miksic expects to hire at least 50 people, a mix of engineers, chemists and IT personnel, to staff the facility. He projects it will open early next year after a test phase later this year.

“It will be a world-class biotechnology facility,” says Miksic, who has lived on Longboat Key since 1993 and been coming to the Sarasota-Bradenton area for boating since the 1980s. “I live here and I think this is a great area to expand. This area offers everything we need.”

Miksic bought the building in May for $1.4 million, according to Manatee County property records. Renovations and equipment, estimates Miksic, will cost another $9 million. The building was built in 1985.
One final reason for the Florida expansion, says Miksic, is climate — both financial and weather. On the former, Miksic sought to avoid a high-tax state. The weather is about more than the sun. Miksic bemoans the harsh Minnesota winters that led to delayed and missed shipments and other transportation hassles.

“Everything came to a standstill, and we can't afford that,” Miksic says. “We think this (Manatee County plant) will become one of the most productive facilities we have.”

'Wonderful blend'
Products made in the facility will include BioPouch. It's designed to protect carbon steel used in construction against a variety of elements, including heavy water, high heat and cold temperatures.
BioPouch, a bio-based corrosion inhibitor, according to its U.S. patent application, is derived from molasses. BioPouch received a U.S. patent earlier this summer.

Other products that will be manufactured in Manatee County include anti-rust chemicals, a line of environmentally safe bioremediation and cleaning chemicals and corrosion-inhibitor coatings. The coatings are chemical vapor ions that form a thin molecular protective layer on a metal surface. The coatings are placed on a host of products with a wide range of sizes, from circuit board components to containers.

Haugen, the Minnesota attorney, has worked on the patent side of these products and many others for Miksic. He says innovation is a core part of Cortec's strategy. Says Haugen: “Boris has this wonderful blend of positive things for society he's built a company around.”

Research and development, to Miksic, is a key element of the firm's secret sauce. “I've always believed that Cortec's success depended on our ability to create new products and new markets,” he writes in “American Dream: A Guy From Croatia,” a book he wrote in 1996 and updated in 2011. “New products make up the fabric of who Cortec as a company is. Doing it well is like winning the Super Bowl.”

New products make up one-third of Miksic's 20-20-20 rule, his map for how to build a successful business. The theory: A business should strive to grow sales 20% a year, reduce costs 20% a year and increase its new product output by 20% a year. While Miksic says it's a proven philosophy, the No. 1 challenge he encounters is “having employees buy into it.”

Big break
Miksic says his business acumen comes from a combination of his father, Steven Miksic, and on-the-job experience. The elder Miksic, says his son, was an engineer with excellent business instincts.
“He was a great salesman and a really great negotiator,” Boris Miksic says of his father, who died a few years ago. “He was my best teacher.”

The real-life experience began soon after Miksic landed in New York City after Croatia. He got a job at a McDonald's. He also reconnected with a New York-based executive he met in Croatia in 1968, Dick Singer.

Singer gave Miksic his first break: Singer set him up with a chemical engineer position at St. Paul-based Northern Instruments, a company that made corrosion inhibitors and electric sensors. The company, which Singer worked with through his own family's business, also put up Miksic and his wife in an apartment — rent-free for six months.

The challenges were as large as the opportunity. Miksic, in his book, writes about how he knew little English and even less about being a chemical engineer. But he learned fast. Miksic and his wife only spoke English at home, and he spent a lot of time at the local library, reading about chemicals and businesses.

After three years Miksic grew frustrated in the bureaucratic, structured work environment at Northern Instruments. So in 1977, with a $40,000 loan from First Bank of St. Paul, he launched his own business. He called it Cortec, for Corrosion Technologies. Miksic took out a second mortgage on his house for collateral.

Sales grew slow at first. The firm surpassed $5 million in annual sales in 1993, and then grew rapidly after that, to $40 million by 2004 and $100 million by 2011. Miksic says Cortec has stayed nimble, which helps it compete with bigger competitors, like DuPont.

Cortec, Miksic says, has also been successful because he sets his goals on market needs, not internal revenue targets. “For me it's always been about new technology,” Miksic says. “I was never impressed by the power of money.”

Presidential Focus
When Croatian immigrant Boris Miksic lived in Minnesota he learned a valuable lesson from his next-door neighbor — former U.S. vice president and onetime presidential candidate Walter Mondale.

The politician told Miksic a good leader should be able to make a simple pitch about what he stands for from the time it takes an elevator to get from the first floor to the fifth floor. “You have to have a clear message,” Miksic says Mondale told him. “And focus on three things, no more.”

That advice came in handy in the 1990s, when Miksic ran Cortec Corp., a manufacturer of corrosion protection chemicals that eventually grew to $100 million in sales. Miksic remembered Mondale's words a decade later, in 2004, when he announced his candidacy for president of Croatia, a country going through a transition to democracy. Miksic spent a year traveling between the U.S. and Croatia, and in a book about his life he writes about the bruising campaign. He ultimately came in third place in 2005.

Miksic says he has no regrets from the experience, save for not winning. He's glad he brought an entrepreneurial spirit to the campaign, and his homeland. “Businesspeople should get more involved in politics,” says Miksic. “We would be much better off if we had that.”

— Mark Gordon

Executive Summary
Company. Cortec Corp. Industry. Chemical, manufacturing Key. Firm is building a new facility in Manatee County.

MIKSIC'S MOTORS
A reason Boris Miksic moved to Longboat Key in 1993 was to get access to year-round boating, one of his hobbies.

While Miksic, a Croatian immigrant who came to America with $37 and eventually built a $100 million business, loves the water, another passion is cars. Expensive, exotic cars. “I own them for pleasure,” says Miksic. “I drive them when I feel like it.”

Miksic's collection includes a 1996 Corvette, a 1973 Mustang Mach 1 convertible, a 1993 Ferrari and a 2015 Bentley Continental GTC Speed convertible. The Bentley is actually a gift for Miksic's wife, Ines Miksic.

Another car in the Miksic collection, a 1980 Rolls-Royce convertible he bought in 1997, has a unique back story. Miksic found out about the car, he says, through his Ferrari mechanic. He mailed a check to the owner in New York. The owner, it turned out, was financier Bernie Madoff, who went on to orchestrate one of the largest Ponzi schemes ever.

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