Prodravka set for closures?

Podravka​ CEO Darko Marinac announced that the closures would be taking place because the accession states in question would be fully integrated into the common EU market. This indicates that the company would be likely to back out of Slovakia, Hungary and Poland - all leading accession states where the company presently has manufacturing facilites.

"We have just completed a comprehensive market analysis of all our operations in the region in an effort to assess the potential of our businesses throughout the region,"​ said Prodravka spokeswoman Sandra Krvacic. "We are now carefully considering this information and expect to make concrete decisions at the beginning of April."​

Last year Prodravka's results were affected by falling sales of its leading brand Vegeta. Sales of the seasoning condiment were reported to have dropped by 13 per cent on the key Polish market, having a big impact on results and raising a question mark over the three year-old production facility in the country.

Sales of the condiment were also below expectations in the other key markets of Slovenia and the Czech Republic, although industry experts believe that the relatively high development of those markets will ensure that the production facilities there will not be closed.

The company is also about to launch a €27 million corporate bond to buy back a 10.5 per cent stake which the EBRD bought in the company in mid-2003.

Podravka has used the proceeds of the EBRD loan to finance the construction of a new plant in Koprivnica, as part of a capital expenditure outlay of €152.4 million on updating and expanding facilities.

Croatian-based Podravka was established in 1947 and has become one of the largest food processing companies in the region. Its businesses include production of food additives, dehydrated soups, baby food, meat, fruit and vegetable processing and brewing. It has manufacturing facilities in Hungary, the Czech Republic, Slovakia, Croatia and Poland.