Zvonimir Mrsic, chairman of Podravka's Managing Board - We negotiate acquisition of several Serbian companies

(Zvonimir Mrsic)

Serbia is a very significant market for Podravka, which is why we consider taking over several companies here, said Zvonimir Mrsic, chairman of the Managing Board of Croatia`s Podravka.

In an exclusive interview with eKapija, he also explained why they might move part of the production from Croatia to Serbia and revealed whether there would be new layoffs after the dismissal of more than 300 workers.

eKapija: It is increasingly speculated that a branch office in Belgrade alone is not enough for Podravka and that you already consider taking over a local company?

- Not one, but maybe even several companies (laughter). We are interested in investing in the market of Serbia because, first of all, Podravka is here perceived as a domestic company, and we would like to stay that. We are already negotiating with few companies in Serbia, mainly on the expansion of our cooperation, but we are, of course, also interested in acquiring them if our interests match.

eKapija: Acquisition of Novi Knezevac-based Aleva is mentioned most frequently. How far have you come with the negotiations?

- As you already know, we are listed on the Zagreb Stock Exchange, which is why I cannot tell you that.

eKapija: Croatian President Ivo Josipovic has recently said that he met with the representatives of large international funds interested in investing in Podravka. Are there any concrete indications that foreign investors will buy a stake in your company?

- Our shares have been intensively traded over the last few days, and their price has grown more than 10 percent. Obviously, there is an interest in our shares. At this moment, there is also a large free float on the Zagreb Stock Exchange, so that it is possible to accumulate a stake that can affect the company's structure. However, I cannot specify whether and when some other activities will happen.

We are working on the company`s strategic plan, in which we are going to express our big ambition. For that ambition, we need a lot of money. The question is how to get it...

eKapija: You have recently changed your management staff. Have these changes affected your operations? How was the first half of this year for Podravka?

- Whatever happened is now behind us, we are looking ahead. The first half was satisfying. A problem is that retail sales in our core market (regional market) are dropping. Sales in Croatia have been on a downfall for four months in a row, while sales in Serbia have been decreasing this whole year.

eKapija: If I am not wrong, your operating profit dropped as much as 30 percent in this period?

- This drop is a consequence of big one-off items. We laid 300 people off. Therefore, if we observe the corrected operating profit, it is the same as last year. What has come as a result of our operations is not worse than last year, although the working conditions in the market got worse in general.

eKapija: Are you going to dismiss any workers?

- We must work on our efficiency. Simply, in the future, we must look like our competitors. Our competitors are, primarily, global companies and, in addition, there is always a local player in every market to compete with. We export our products to 50 countries, where we have to compete with Nestle and Unilever. In order to be able to keep up with them, we must be as efficient as they are, meaning that we must bring the ratio of the number of employees to the revenue, net profit, operating profit to the level pursued by foreign companies.

eKapija: Will the admission of Croatia to the EU do more harm or good, especially to you as a representative of the food industry?

- It`s a big challenge. First of all, there will be more competitors in the Croatian market because EU companies will be able to export their goods to our country without limits. Secondly, a limit will be set to our exports to the CEFTA market, which will make our products much more expensive in CEFTA countries. For that reason, we consider relocating some of our resources to a place where these negative effects could be annulled.

eKapija: Could that be Serbia? Are you going to move part of your production here?

- Probably Serbia too, especially because Serbia is one of the CEFTA regional centers and has a beneficial trade agreement with Russia. That is why one should consider investing in Serbia.

Jelena Djelic