News

Changes to the Management Boards of Fortenova Group operating companies Business

11.05.2020.

As of mid May and early June, respectively, the companies Konzum plus d.o.o. and Ledo plus d.o.o. will be headed by new Presidents of the Boards. Thus Zoran Mitreski will replace Slavko Ledić as President of the Management Board of Konzum and Ivan Babić will assume the management of Ledo instead of Marin Poljak. In order for Fortenova Group operations to be even more efficient in the forthcoming period, Fabris Peruško, Chief Executive Officer of Fortenova Group, has together with the Executive Directors and the Board of Directors introduced changes with a view to further strengthening the management teams and improving the two key business areas of Fortenova Group.

The position of the President of the Managment Board of Konzum, the largest national retail chain, will as of 16th May 2020 be assumed by Zoran Mitreski, former Member of the Management Board of Konzum for purchasing and marketing. At the same time, with a view to further standardizing and strengthening synergic potentials as well as simplifying operations, the frozen food segment within Fortenova Group’s Food Business Area will be integrated in terms of management. As of 1st June 2020 Ivan Babić, currently director of the Turnaround Department at Fortenova grupa d.d., will assume the management of the frozen food segment as Executive Director and at the same time as Managing Director of the company Ledo plus.

Both Slavko Ledić, former President of the Management Board of Konzum and Marin Poljak, former Managing Director of Ledo plus, will continue their careers outside Fortenova Group.

„In realizing those decisions we were primarily guided by the wish for improvement and continuity, which we have achieved with these appointments. Our colleagues Mitreski and Babić are deeply integrated in the operations of the companies the management of which they are about to assume. With long-standing experience in retail, and particularly in Konzum where he has together with other colleagues run the company through the most challenging stages of its operations, since the deep crisis in 2017, through the Extraordinary Administration Procedure to the stabilization of operations and resumption of excellent results, Zoran Mitreski is the key person for Konzum’s further development. The leadership that he has shown today, under the circumstances of the coronavirus pandemic, has significantly contributed to the fact that Konzum has again demonstrated exceptional strength under significantly aggravated operating conditions.

Similarly, Ivan Babić as head of the turnaround project, particularly important for the processes that Fortenova Group has undergone, had the opportunity to familiarize himself in detail with all our businesses and has with his strategic considerations and operational skills made a great contribution in raising Fortenova Group’s operating profit by EUR 100m through the restructuring over the last two years. The experience he has gained by doing that work and by running the restructuring at MOL, where he worked prior to joining Fortenova Group, guarantee that our colleague Babić will justify the trust placed in him to run the operations of the frozen food segment“ – said Fabris Peruško, Chief Executive Officer of Fortenova Group.

“I feel great pride, but at the same time great responsibility. On the one hand, this confirms that the Management Board that I have been part of in the former composition led the company in the right direction and I can only say that my appointment will provide for positive continuity. We shall continue working on all projects started and, of course, I look forward to all future ones. Konzum is made of people and I am sure that our winning team will continue to overcome all challenges just as it has done so far“, said Zoran Mitreski, the new President of the Board of Konzum.

Ivan Babić, the new Executive Director of Fortenova Group’s frozen food segment, said on the occasion of the appointment: „I am honored by the decision to entrust me with the responsible duty of running the new frozen food segment in the Food Business Area. After two years of very intensive work on the turnaround project and the cooperation with numerous teams from all parts of Fortenova Group, I believe that I have not only sufficient knowledge, but also the experience required to achieve the strategic objectives set. I very much look forward to new business challenges and particularly to the cooperation with colleagues on developing and strengthening the market positions of our companies.“

Peruško also thanked the former heads of Konzum and Ledo for the contribution they made to the companies and to Fortenova Group, particularly over the period of the Settlement Plan implementation and the transformation of the companies.

„The managerial skills, knowledge and personality of Slavko Ledić were key to maintaining Konzum’s operations in the crisis the company went through in 2017. In spite of a number of aggravating circumstances, Konzum survived and within very short time regained customer confidence and resumed its upward trajectory. Ledić headed the team that impeccably realized the Settlement Plan implementation, which was extremely complex in a retail company with more than 10,000 employees. In parellel to that, Konzum continuously improved its business results and was one of the major drivers of operating profit growth of the entire Group. At the end of the day, the period of extraordinary retail operations under challenging conditions that we are currently witnessing is largely the result of Ledić’s organisational skills and knowledge of retail operations. I therefore extend my sincere appreciation to our colleague Ledić for his hard work and engagement and wish him lots of success in his further career“ – Peruško said.

In his acknowledgment to Marin Poljak, former President of the Board of Ledo plus, Peruško highlighted his contribution to developing the organisation, the new vision and the realization of Ledo’s strategic plan. „Under his management Ledo continued to affirm its leading position in product innovation and quality under aggravated operating conditions“ – said Fabris Peruško on the occasion of announcing changes in leading positions at two Fortenova Group companies.

Zoran Mitreski CV Ivan Babić CV

Prime Minister of the Republic of Croatia and associates visit Belje Agriculture

28.04.2020.

The Government delegation got acquainted with the Mitrovac production system, based on the synergy of a dairy cow farm, a biogas facility and a greenhouse for growing tomatoes, which also illustrates the basic determinants of Belje’s operations – the production of local food and traceability from field to table

Within the scope of their working visit to Eastern Slavonia, Andrej Plenković, Prime Minister of the Republic of Croatia, accompanied by Marija Vučković, Minister of Agriculture, visited the Mitrovac agricultural complex at Belje, comprising a dairy cow farm, a biogas facility and a greenhouse for the production of tomatoes.

The Government delegation was acquainted with the Mitrovac production system, based on the synergic connection of a dairy cow farm with a capacity of 2000 cows, a 2 MWh biogas facility and a 4.5 ha greenhouse. The biogas facility uses raw material from the farm to produce electric power and heat, used in the greenhouse for a year-round production of tomatoes.

The Mitrovac agricultural complex thus illustrates the basic determinants of Belje’s operations – production of local food, traceability from field to table and sustainability, which have in these challenging times proven to be very important for the Croatian economy.

As Croatia’s largest agricultural and industrial complex, Belje boasts an agricultural production that follows all global trends and can produce sufficient quantities of local food. Belje tills 20,000 hectares of arable land and 650 hectares of vineyards, produces 35 million litres of milk a year and accounts for 35 per cent of Croatia’s pig production as well as 14 per cent of Croatia’s cattle production.

„With the agricultural potential that Belje has, just like the whole of Slavonia and Baranya, Croatia can produce sufficient quantities of food, primarily for its own needs but also for exports. Belje has systematically invested in the development and strengthening of its production capacities and has continuously produced local foods from our fields and farms. In spite of the challenging circumstances that we are facing, all agricultural works have been carried out according to plans and all our productions work at maximum capacities, as best witnessed by the results of the animal feed factories that in March recorded the largest monthly production in the company’s history“ – said Davor Bošnjaković, Managing Director of Belje plus.

Vlado Čondić Galiničić, Executive Director for the Business Area of Agriculture at Fortenova Group and also President of the Agriculture Group of the Croatian Chamber of Commerce, as well pointed out that the corona crisis has proved the importance of local agricultural production and the food industry tied to it.

„This knowledge can be used to strengthen the national agricultural strategy and resourse management. What we need now is a serious structural determination as to what we want and can produce in the forthcoming period, ie. a decision with what products we strive for self sufficiency and we should then develop in that direction. In our country we can produce sufficient meat, milk, cereals….. as there is enough room, experience, historical knowledge and people willing to work“ – Čondić Galiničić said.

Fabris Peruško, Chief Executive Officer of Fortenova Group, among other matters, drew the attention of the Government delegation to the fact that Fortenova Group’s strategic determination to develop the regional agricultural and food production of local origin on all markets where it operates, and the emphasis on products of local origin in purchasing and sales, was one of the key levers during the corona crisis in securing the supply of the market with the most important food products.

„Fortenova Group’s specific advantage in doing so was its regional footprint and cooperation, as the commercial flows within our region were functioning despite the global crisis“ – said Peruško and added: „Companies like Fortenova Group can lead the way in strenghtening the offer of local products both on the domicile market and in exports. This particularly applies to agriculture and food production, because we have all the prerequisites – heritage, high product quality and consumers who are used to those products and appreciate them highly. Hence, in a more intensive development of local production we should count on an even stronger local consumption, which shall also become a strong contribution to preserving economic activities and jobs in Croatia.“

Fortenova Group purchases and donates half a million protective masks to the Civil Protection Directorate Social Responsibility

10.04.2020.

The protective equipment worth almost HRK 2 million is intended for users working in the field to implement health protection measures against the coronavirus

Half a million disposable protective masks were donated by Fortenova Group to the Civil Protection Directorate of the Ministry of Internal Affairs of the Republic of Croatia. The protective equipment worth almost HRK 2 million, collected today from the Konzum warehouse, is intended for users who work in the field, implementing protective measures against the coronavirus.

Assistant Minister Damir Trut, PhD, thanked for the donation and said that it would contribute to increasing the safety of people taking part in activities related to fighting the novel coronavirus epidemic.

„The donation of protective masks will provide for safer work conditions and the protection of all workers, primarily in the health system, but also other operating forces in the civil protection system and I would therefore like to say thank you for this praiseworthy donation. It is only with joint forces that we can contribute to reducing the spread of the novel coronavirus and to increasing the safety of all citizens of the Republic of Croatia“ – the Assistant Minister said.

Despite the great challenge in purchasing equipment which is currently the most sought after product on global level, Fortenova Group managed to import a sizeable quantity thereof, part of which is intended for the protection of Fortenova Group employees, while the majority of the masks will be provided to those who currently need them most.

„Everything we get from medical workers, policemen, fire fighters and all the others who have over the last weeks non-stop been taking care of the safety and health of us all, is invaluable. At Fortenova Group we know this very well, as thousands of our workers have daily been taking care of the smooth supply of goods for the people in the region. This why we very much appreciate the value of caring for safety and health and the importance of investing in that safety at this point“, – said Fabris Peruško, CEO of Fortenova Group.

Fortenova Group companies in Croatia – Konzum, PIK Vrbovec, Jamnica, Zvijezda, Belje and Ledo – have since the beginning of the crisis been helping hospitals, the Red Cross and various associations taking care of those in need. In Bosnia and Herzegovina and Serbia, countries of the region in which they operate, the companies have as well helped to a significant extent in providing the basic necessities in fighting against the coronavirus spread.

„With this most recent donation of protective masks the overall amount of Fortenova Group donations across the region to date has reached almost HRK 4 million in direct contributions to the communities in which we operate. This is also a way to show our gratitude to everyone who are in their workplaces daily, irrespective of the risks“ – Peruško highlighted.

PIK Vinkovci invite small agricultural producers from Croatia to apply for the repurchase of products to be placed on the market through Konzum Business

30.03.2020.

PIK Vinkovci invite all interested small agricultural producers and family farms in Croatia who want to place their products on the market through Konzum to contact them at their collecting stations or through the email address: otkup@pik-vinkovci.hr.

Namely, PIK Vinkovci have together with Konzum taken part in the initiative launched by Fortenova Group in cooperation with the Agricultural Chamber and the Ministry of Agriculture in order for agricultural produce, which small producers cannot sell through green markets due to the extraordinary measures, to be placed through Konzum’s retail network.

The placement will be realized through distributors, who will repurchase their produce subject to meeting highest quality standards. At Fortenova Group that will be PIK Vinkovci, given their long-standing tradition in agricultural production and repurchase of produce as well as the current collaboration in repurchase with several hundred contract farmers from all over Croatia.

The partnership which PIK Vinkovci within the scope of this project offer to small local producers whose existence is directly jeopardized by the closing of green markets, shall provide them with an essentially needed new sales channel. Thus the fact that Konzum is the largest national retail chain with over 600 points of sale, which will from now on additionally become an efficient sales channel for all small producers and family farms that so far offered their products mainly to local communities and green markets, has become particularly important in this project. This all builds on Konzum’s already existing focus on Croatian production, given that products of Croatian origin account for 80 per cent of Konzum’s turnover in the fruit and vegetables category.

PIK Vinkovci plus d.o.o. started gaining experience in vegetable, crop, livestock and seed production and repurchasing back in 1962 and today, measured by its storage capacities of 86,800 tons in total as well as silo and drying capacities, the company is among the largest in the Republic of Croatia. It is also one of the leading companies on the territory of the County of Vukovar and Srijem, tilling more than 5,000 ha of land, employing over 500 people and investing in development and new technologies.

„PIK Vinkovci have an exceptionally good and fair cooperation with more than 500 contract farmers a year, from Eastern Slavonia and from all across Croatia. Through five collecting centers, which strategically cover the agricultural production of the entire Republic of Croatia, they repurchase over 20,000 tons of fruit and vegetables a year. We take pride in the contribution that we have made to the integrated development and preservation of traditional and natural values, as we daily meet people’s needs for quality local food on the Croatian market. In cooperation with Konzum as well as our existing and future contract farmers, whom we herewith once again invite to join us, we will certainly be able to keep fulfilling our basic mission – to supply all our customers with quality local products“ – Vlado Čondić Galiničić, Executive Director of Agriculture at Fortenova Group, commented on PIK Vinkovci’s initiative.

Fabris Peruško, CEO of Fortenova Group, pointed out that Fortenova Group has in this project secured the repurchase of Croatian agricultural produce through PIK Vinkovci and their placement through Konzum’s retail network.

„We have thus, in these challenging times, used the key segments of our operations to create an important link and platform to preserve small agricultural production in Croatia. At the same time, we have once again demonstrated our overall strategic orientation towards Croatian production and made an important contribution to the future of Croatia’s agricultural production. By providing an alternative distribution and sales channel in circumstances of the rigorous measures introduced to prevent the coronavirus spread, we have proved how important a business partner small agricultural producers and family farms are to us. Moreover, we have conveyed a message about the values that we share – the importance of buying Croatian products, focus on the self-sufficiency of national and local production and strengthening of local supply chains“ – said Fabris Peruško, CEO of Fortenova Group.

INVITATION BY PIK VINKOVCI TO SMALL AGRICULTURAL PRODUCERS AND FAMILY FARMS

Key agricultural crops to be repurchased by PIK Vinkovci: watermelon, cabbage, new potatoes, melon, cucumber, crystal lettuce, kale, leek, tomato, apple, zucchini, red cabbage, grapes, pumpkin, asparagus, parsley, chard, onion, pepper, plum, celery root, peach, nectarine, pear, garlic, eggplant, red beet, apricot, kohlrabi, sweetcorn, celery, cherry, radish, spring onions etc.

The fruit and vegetable repurchase will be realized according to defined quality standards and with all new contract farmers a cooperation agreement will be signed to define the contractual relations. A constituent part of each agreement will be a product quality standard regulation.

Contact repurchase/collecting stations:

Repurchase Slavonia

Collecting Center Lipovac, Cvjetno naselje bb, Lipovac

Collecting Center Čeminac, Školska 5a, Čeminac

Repurchase Dalmatia

Collecting Center Polača, Industrijska zona Primat bb, Polača (near Zadar)

Collecting Center Kaštela, Trogirska cesta broj 5, Trogir

Repurchase Zagreb

Collecting Center Zagreb, Kelekova 47, Zagreb

The contact email address for all small producers is: otkup@pik-vinkovci.hr, the contact number for Dalmatia and Zagreb is: 023 662 548, while the contact number for Slavonia is: 032 270 084.

Konzum to open essentially needed sales channel for local producers as green markets close Business

26.03.2020.

Fruit and vegetables of local origin already account for over 80 per cent of turnover in that category at Konzum and through the new initiative we are ready to offer our repurchasing capacities and sales network to those who have no possibility of putting their products on the market as the green markets have been closed

Citizens will soon be able to continue buying local producers’ fruit and vegetables, that they, until recently, were purchasing on local markets, at Konzum stores all across Croatia. Konzum’s initiative was prompted by the decision of the Civil Protection Committee of the Republic of Croatia on the measure of suspending the operations of green markets and all accompanying facilities. Products of local origin already account for more than 80 per cent of Konzum’s fruit and vegetables turnover and with this initiative Konzum shall secure additional space on its shelves all over Croatia for local producers who had offered their products mainly in local communities so far. Interested farmers can contact the distributors PIK Vinkovci, Marinada and Fragaria, who will repurchase the goods and deliver them to Konzum with guaranteed highest quality standards. The project can also be joined by small fruit and vegetable growers who have applied to Konzum’s „The Best from Croatia“ competition, once they make arrangements for the cooperation with the aforementioned distributors.

In collaboration with the Small Croatian Producer cluster Konzum has offered a selection of quality local products from small local producers at specially designed areas in several of its stores. With the new initiative and in agreement with the Small Croatian Producer cluster we shall continue to place on the market goods of producers acting within the scope of that cluster who have already participated in the project „The Best from Croatia“.

„While we appreciate all decisions made by the Civil Protection Committee of the Republic of Croatia as they are intended to protect the population’s health and safety, we also want to help primarily small family farms to whom an important sales channel is not available any more and whose existence has thus been jeopardized. Since the very beginning Konzum has been fostering partnerships with local producers and this initiative is a continuation of our strategic focus on supporting Croatian production. In the current situation that we have been faced with due to the coronavirus epidemic, self-sufficiency has proved to be particularly important in maintaining the supply chain and hence we all together have to work on strengthening the local agriculture“, said Zoran Mitreski, Member of the Management Board of Konzum.

Konzum already cooperates with more than 4000 small and large fruit and vegetable producers from all over Croatia, via direct deliveries to own distribution centers, their repurchasing stations or its strategic parterns.

With this initiative we are ready to offer our repurchasing capacities and sales network to those who have no possibility of putting their products on the market.

Fortenova Group production companies work regularly to secure sufficient product quantities, Konzum has goods to meet the demand over several months Business

17.03.2020.

Observing Italy’s experience, Konzum started preparing stocks several weeks ago, its key advantage being the strategic cooperation with local suppliers of many years

You can see the video of the statement in Croatian here.

In all of its production and agricultural facilities as well as in retail, Fortenova Group implemented a number of measures to secure continuity of operations under the extraordinary conditions of defense against the coronavirus spread. Under intensified measures of sanitary and personal hygiene, the employees of Jamnica, Zvijezda, PIK Vrbovec, Ledo, Belje, PIK Vinkovci and all other Fortenova Group companies are working normally to secure products for the shelves and stocks in retail, thus guaranteeing availability of those goods on the market in the forthcoming period.

Given that the exceptionally strong demand over the last days at Konzum stores created jams that made it very difficult, in spite of the employees’ efforts, to fill the shelves in the stores at the same pace at which customers emptied them, Fortenova Group points out that Croatia’s largest retail chain has sufficient quantities of goods, particularly food and hygiene items, which are in highest demand in the current situation. The high demand also resulted in an increase in turnover, which was significantly higher than usual at individual Konzum stores in the peak periods.

„The increased demand, particularly after specific articles, is the only reason why the shelves are empty from time to time, as long as our staff does not have the time to replenish them. We have started to get prepared for that situation weeks ago, observing the experience in Italy, and have additionally increased our stocks. The warehouses are full and there are sufficient goods to meet the demand over several months. Food stores will certainly stay open, in compliance with the national measures of defense against the coronavirus disease and at Konzum, ie. at Fortenova Group we will make sure that there are sufficient quantities of all key products“ – says Fabris Peruško, CEO of Fortenova Group.

Peruško particularly pointed out that in the current situation Konzum’s great advantage was its strategic cooperation with local suppliers of many years, which was also a guarantee that there would be no delivery disruptions nor price increases at Konzum stores.

„Although the majority of our food items are of local origin, for some time we have also been working on establishing alternative sources of supply, in case there should be any major limitations or stoppages in the supply of goods that are imported from the most affected countries. We would like to ask our customers for their understanding – large surges make pressure on the stores, which increases the health risk both for our customers and our employees. I would therefore like to appeal to our customers to comply with the provision of keeping distance at the cash desks and in the store as well as using primarily contactless, ie. card payment, as those measures are key in preserving the health of everyone in the stores“ – said Zoran Mitreski, Member of the Management Board of Konzum for Purchasing and Marketing.

„All our employees, particularly those whose work is not visible as they are either in production or in the logistics chain, give their best to maintain operations under circumstances that are significantly more difficult. This is an opportunity to say thank you to them as well as to Konzum’s employees for all the efforts that they have been exerting for the system to function under extraordinary circumstances, for the supply of goods to be sufficient and for all customers to be served. As employers we will find a way to reward them for this extraordinary engagement“ – said Fabris Peruško and reiterated that the Fortenova Group food production as well as Konzum’s stores would keep on working and that it was most important now to overcome the days of probably even stricter measures of defense against the virus spread that are ahead of us with calm heads and no panic.

Fortenova Group to proceed with specialization in its wholesale operations Sales

29.01.2020.

Roto dinamic to assume the entire HoReCa sales channel in the beverage segment at Fortenova Group level

Wholesale part of Konzum (former Velpro Centar) to focus on the distribution of food and non-food assortment in the HoReCa channel and cooperation with the small independent stores and Plus Markets

Fortenova Group made the decision to consolidate the beverage distribution for the HoReCa channel within Roto dinamic. In early February 2020 the project of splitting operations within the wholesale segment of the Group will be initiated, within the scope of which Roto dinamic will focus on the beverage segment in the HoReCa channel, while Konzum, with which Velpro-centar merged at the end of last year, will place its focus on the distribution of food and non-food assortment in HoReCa channel. In addition, Velpro will continue cooperation with small stores and the independent retail segment, continuing to develop the Plus Market segment.

With total revenues of HRK 954 million in 2019 and more than 600 employees, Roto dinamic operates through 15 sales and distribution centres, daily distributing its portfolio of beverages and additional assortment to more than 7,000 points of delivery. During the season that number grows to more than 10,000. Roto dinamic also operates discount retail stores ideal for all beverage customers, from HoReCa businesses that account for more than 70% of customers, to individuals looking for the ideal price-quality ratio and a high level of service.

„Roto dinamic has been operating for 28 years and has grown from a local distributor to the national wholesale operator providing full service to all our customers. Taking over the complete customer network of the HoReCa channel in the beverage segment has been a natural step forward for us, as on a dynamic and challenging market both our customers and our suppliers are looking for a reliable partner in sales and distribution, as they are aware of all the challenges in doing business during the season when the majority of revenue is generated. Our strength certainly lies in our focus on the customers and their needs and this is why we are today an agile company, with a high level of service irrespective of where our customers are located, being able to respond to all their needs“, stated Siniša Mužić, Director of the company Roto dinamic.

Velpro has been present on the Croatian market for 19 years and it generated revenues of HRK 1.151 billion last year. It operates through 16 sales and distribution centers with over 850 employees, offering more than 10,000 SKU’s to its customers.

“After the merger with Konzum, Velpro has additionally strengthened its operations and secured sustainability in the long term. Over the years we have been recognized by our customers as a significant strategic partner in the development of independent retail trade and HoReCa in Croatia. The wholesale segment’s new specialisation will provide an even stronger focus on the distribution of food and non-food products in the HoReCa channel. The strengthening of tourism and the HoReCa segment is Velpro’s long-term strategic objective, having infrastructure and service quality able to meet our customers’ needs. We will continue to work on adjusting our services and assortment in accordance with their needs. The wide assortment of products is available to our customers through distribution and in 16 Cash & Carry centers, where they can purchase, in a time-efficient manner, everything they need for their restaurants, hotels, stores and other retail facilities. Today Velpro does business with more than 5.000 legal entities, whereby 450 operate under the small store brand Plus Market. We will also maintain strategic cooperation with all small independent storeholders’ associations in the territory of Croatia”, – said Slavko Ledić, CEO of Konzum.

Further consolidation of wholesale within Fortenova Group will provide for an even greater business focus and specialization. This will result in a higher level of service for the wholesale customers, optimisation of the supply chain and business overall, and better use of synergies. With a clear strategy in place, both companies will achieve the maximum effect in sales and distribution and provide a focused wholesale service to the target customer groups, responding to all of their needs.

Sarajevski kiseljak holds opening ceremony of its new bottling plant in Kreševo Companies

21.01.2020.

On 21st January 2020 Sarajevski kiseljak held an opening ceremony to put into operation the bottling line of its new factory in Kreševo. The new facility is the company’s largest strategic investment worth more than KM 20m in total.

The construction of the new factory spreading over an area of 30,000 square meters has provided for a significant increase in the production and storing area of Sarajevski kiseljak, leading producer of mineral waters and carbonated soft drinks in Bosnia and Herzegovina and the expansion of capacities as well as the factory’s modern technology will enable Sarajevski kiseljak to grow its annual production quantities and further strengthen the company’s market positions. The Kreševo factory employs 30 new workers.

At the opening ceremony attended by numerous invitees, Sarajevski kiseljak today put into operation the bottling line of its new factory in Kreševo, the company’s largest strategic investment worth more than KM 20m in total

„This strategic investment marks the beginning of a new era for Sarajevski kiseljak and is a large step forward in the company’s strategic positioning on the market. Last year we produced more than 120 million litres of water and refreshing soft drinks in the existing facilities. The brands of Sarajevski kiseljak and Jamnica dominate the bottled waters market of Bosnia and Herzegovina and are the first choice among consumers in this segment of the market. Technological improvement and the increased capacities in the new factory will make it possible for the results to be considerably higher. Thus we will additionally strengthen the leading position in Bosnia and Herzegovina and also have the lever to significantly expand into new markets. The new factory currently employs 30 new workers and that number will grow in the future as we will increasingly utilise the production capacities. I would like to thank everybody that contributed to the development and the start of operations of this plant / factory, and my big thanks especially goes to my predecessor and colleague Tomislav Slišković, to whom this factory is the highlight of his career and he can now peacefully retire“ – said Davor Čičić, Director of Sarajevski kiseljak on the occasion of the opening ceremony of the facility in Kreševo.

Renato Pejak, mayor of Kreševo municipality highlighted the exceptional importance of this event for Kreševo and its residents because opening jobs will help create better conditions for the existence of young people in Kreševo and help them stay, which is the primary goal and task of the municipality. “Kreševo has gotten a modern factory equipped by the highest standards, to the wellbeing of our entire community and that makes me, as Mayor, very satisfied. I am sure that in the future too we will together be oriented towards building, employment and economic prosperity, and finally a better and happier future in this area.” – said Pejak.

Tahir Lendo, Prime Minister of Central Bosnia Canton emphasized that an opening of a new factory is one more in a series of significant projects that are being realized in Central Bosnia Canton (CBC). “The Government of CBC is, according to its capabilities, always ready to support projects that represent a base for further economic development of the Canton. This is another confirmation that the Economy in our Canton is rising. I wish luck and success to all current and future employees of Sarajevski kiseljak.” – said Tahir Lendo, Prime Minister of CBC.

The facility in Kreševo is the first large production investment at Fortenova Group since several years and the holding company, together with Jamnica gave a significant support to its implementation. So, the opening ceremony was an opportunity for Fabris Peruško, Member of the Board of Directors and CEO of Fortenova Group to address the attendants as well.

„It is a great pleasure to attend the ceremony intended to mark this great greenfield investment in production. Personally, I am very happy to mark my second anniversary at the helm of this large company with this new investment. On a symbolic level, this factory represents a major turning point in our businesses, as this is Fortenova Group’s first production investment that, I believe, leaves the turbulent period we have been through completely behind us. We are particularly proud of the new jobs that have been opened, which is the most significant contribution of any employer to the community it operates in. Furthermore, with the new products to be produced in this facility the factory also stands for a developmental improvement, which is the key strategic guideline of Fortenova Group. I am certain that the new products that are soon to leave this facility will equally attract consumers and that Sarajevski kiseljak can look forward to a stable growth and development in the long term“, Fabris Peruško said on that occasion.

Production lines at the Kreševo factory represent the latest technological achievements in this field, including state-of-the-art production equipment and automated production process guidance. With a view to improving productivity and efficiency, all workers attended special training for the job. In line with the tradition and practice at Sarajevski kiseljak, the production processes in this factory will as well be run meeting high environmental standards and sustainable development principles.

The factory will soon launch Sara non-carbonated natural mineral water whose name was chosen in accordance with the best values of this water. In the forthcoming period, the factory in Kreševo will produce flavored water and juices.

Commercial Court of Belgrade dismisses Agrokor’s appeal in the procedure against Banca Intesa Fortenova group

10.01.2020.

Okrajno sodišče in Ljubljana rejects Agrokor’s appeal to the AVK ruling on interim seizure of Mercator shares Fortenova group

07.01.2020.

VELPRO – Centre to merge with Konzum Business

18.12.2019.

Further strengthening of wholesale and utilisation of synergies at Fortenova Group level

Fortenova Group made the decision that at the end of 2019 VELPRO-Centar plus would merge with Konzum plus. The objective of such merger is to additionally strengthen the Fortenova Group wholesale segment, with the largest wholesale in Croatia operating under the wing of Konzum, Croatia’s largest retail company. At the same time, such move will result in significant synergies and increased operational efficiency. The amalgamation will also provide for numerous other advantages, primarily the optimisation of assortment which will be formed to meet customer needs in all sales channels, and for a stable coverage of the national market with a high level of supply and distribution services, particularly during the tourist season. The main pillar in strengthening the distribution are its employees with long-standing experience, the distribution fleet with more than 150 delivery trucks, as well as 16 cash&carry and distribution centers, with further modernisation of sales premises and processes planned.

All current business partners of VELPRO-Centar plus will continue to be an important part of the merged chain’s operations, particularly Plus market and other small storeholders to whom Velpro centar has been a significant strategic partner in developing independent retail in Croatia for many years. Thus VELPRO-Centar plus does business with more than 450 legal entities under the small store brand Plus market and has strategic cooperations with all small storeholder associations across Croatia. At the same time, given that this is a merger process, the new company shall assume the obligations from all existing contracts and agreed distribution terms, which also applies to public procurement contracts. VELPRO Centar plus shall continue to be present in all sales channels (Horeca and Retail).

Ivica Pivar, Director of VELPRO Centar plus, said: „VELPRO – Centar plus has so far been the largest wholesaler on the Croatian market and after the merger with Konzum we will additionally strengthen our business, particularly its further development and long-term sustainability. Significant synergies that we will realise by a more efficient assortment, supply chain and entire operations management will enable a major improvement of overall services to our end customers – small storeholders and independent retailers, through Plus market stores, HoReCa, as well as in the public procurement segment.

VELPRO – Centar plus has 16 wholesale centers in Croatia and employs more than 800 people in total. For most of the employees the amalgamation process actually means to return under the wing of Konzum, within the scope of which VELPRO Centar plus operated until 31 December 2015, which provides employees with additional security as it ensures the long-term sustainability of business and shifts in development.

Slavko Ledić, CEO of Konzum plus, stated on this occasion: „By merging with VELPRO-Centar plus Konzum shall additionally strengthen its market position in all key indicators. Konzum shall thus generate an additional HRK 1bn in total revenues, its network will expand to 16 wholesale centers in Croatia and our team will grow to 11,000 employees. 800 of them, coming from VELPRO-Centar plus, will serve more than 4,500 wholesale customers. The large team of Konzum and VELPRO employees will have a common goal and mission, though – besides being the leader on the retail market, to also be the most successful wholesaler in Croatia, which will create new values for our employees, customers, suppliers and all other stakeholders.“

Slovenia unfoundedly expropriates Agrokor d.d.’s private property by interim measure of seizure of Mercator d.d. shares Fortenova group

18.12.2019.

The Public Agency of the Republic of Slovenia for the Protection of Competition (Javna agencija Republike Slovenije za varstvo konkurence (AVK)) passed a decision on December 16th, 2019 whereby it has temporarily seized the shares of Mercator d.d. from Agrokor d.d. Unprecedented in the working practice of this Slovenian regulatory agency to date, this decision amounts to an expropriation of the private property of Agrokor d.d. by way of an interim seizure of Mercator shares, without any underlying court decision and with no valid legal justification.

The seizure is based on a disproportionate, non-final penalty in the amount of EUR 53.9 million, as well unprecedented in the practice of this regulator. This penalty, imposed by AVK in September 2019 in relation to a concentration case, has been appealed by Agrokor. The non-final penalty is clearly disproportionate since the company in question, Costella d.o.o., generates only slightly more than EUR 1 million in revenue yearly. This company was acquired by Ivica Todorić, ie. Agrokor AG from Switzerland, back in 2016.

The seizure of Mercator shares is in itself also largely disproportionate, since the shares in question have an appraised value of in excess of EUR 140 million, and the appealable penalty – that is being contested – is in the amount of EUR 53.9 million.

Moreover, according to AVK’s explanation, the interim measure of seizure of Mercator d.d. shares was passed pursuant to the Misdemeanor Act, in particular the provisions of that Act which in their essence apply to traffic offences or similar offences, which are discovered in flagranti, committed by foreign nationals – natural persons in the Republic of Slovenia.

Therefore, Agrokor considers this act of seizure of shares as a gross, intentional misapplication and misuse of law, committed by a state regulatory body that is supposed to enforce the national laws and whose head officers are appointed by the Parliament of Slovenia as the supreme legislative body of the country.

By way of background, the Misdemeanor Act which has been applied in this case to seize shares, essentially provides for the possibility of interim seizure of the driver’s license or car from a foreign national who was for example driving too fast, for as long as the fine is not paid, as there is a reasonable likelihood that the accused may escape, which would result in possible non-payment of the fine. The core pre-conditions that must be satisfied under the Act in order for a temporary seizure to be imposed, are that the infringer would either escape abroad or seek to hide himself. However, it goes without saying that neither of these pre-conditions can be fulfilled with respect to a validly existing foreign legal entity (given that such an entity can neither “run away” nor can it “hide itself”). In addition, the purpose of the law is to provide immediate protection. The written resolution has to be served on the infringer within 3 hours and the courts should decide on the appeal within 48 hours, whereas in the case at hand AVK waited for two months to seek temporary seizure, which in addition casts doubt on AVK’s intentions.

Although AVK has in its practice to date never seized any property from anyone as a means of security for a payment, let alone pursuant to the Misdemeanor Act, which has been in force since 2006, in the current case, by inadequately applying that law, it has now seized Agrokor d.d.’s 69.57 per cent share in Mercator d.d., allegedly as a means of security for paying the non-final penalty in the amount of EUR 53.9 million, against which Agrokor has sought court protection based on firm arguments.

By way of reminder, due to not having reported the concentration of the companies Agrokor AG and Ardeya Global Ltd., AVK passed a decision on September 24th, 2019 imposing a fine in the amount of EUR 53.9 million on Agrokor as legal person and EUR 5.000 for the accountable (natural) person. According to AVK’s explanation, by that concentration Agrokor acquired a 100 per cent share in the company that owns the Slovenian company Costella d.o.o. and was, pursuant to the Slovenian Competition Act, allegedly obliged to report the concentration within 30 days of signing of the takeover agreement. As such a report was not filed, on April 9th, 2019 AVK instituted proceedings to assess the concentration ex officio.

Agrokor has both publicly and directly explained that it considers this decision of the AVK to be completely unsubstantiated, since all decisions related to the above described acquisition were made and executed solely by Ivica Todorić alone, without the knowledge or participation of any other member of the then Management Board of Agrokor d.d. and thus the acquisition had nothing to do with Agrokor d.d., but with Agrokor AG from Switzerland, which has not been under control of Agrokor d.d., but was initially run solely by Mr. Todorić and since 2017 by an administrator/commissioner appointed by the Swiss court, who in October 2019 sent the concentration form to AVK on behalf of Agrokor AG.

Furthermore, the decision of AVK imposing the EUR 53.9 million fine is not final, as Agrokor filed a request for court protection against it, which was submitted to AVK on November 8th, 2019. But AVK has unexplainably not yet forwarded this request for court protection, filed by Agrokor, to the competent County Court of Ljubljana in order to allow the court to decide on the request for court protection and has instead by its own decision, without participation of the court, on December 16th, 2019 initiated the temporary seizure of Mercator d.d. shares owned by Agrokor d.d.

To put the disproportionality of the AVK ruling imposing a fine on Agrokor in the amount of EUR 53.9 million, as well as of the seizure of Mercator shares as alleged security for the collection of that fine into context, it is important to note that Costella d.o.o. is a company that globally generates only slightly more than EUR 1 million of revenue per year. This fact clearly indicates how disproportionate the magnitude of the fine imposed by the AVK is, let alone the seizure of Agrokor’s Mercator shares. It is also worthwhile mentioning that back in 2006, when the Misdemeanor Act was undergoing the Slovenian Parliamentary procedure, the Parliaments’ legislative and legal body expressly warned about the possibility that in some instances seizures under the law might be significantly disproportionate.

As regards the magnitude of the fine, by way of comparison, the European Commission fined Canon EUR 28 million for not having reported a concentration by which it acquired control of Toshiba Medical Systems and has previously in similar circumstances fined Electrabel EUR 20 million with respect to its acquisition of Compagnie Nationale du Rhône, where the acquired company had generated at least EUR 25 million in not less than three countries, otherwise the European Commission would not have been involved in the first place.

Historically, the AVK has never imposed a fine of more than several hundred thousand euros. In fact, its previous highest fine ever in the context of acquisitions and takeovers amounted to around EUR 150.000 (belated concentration report), while the fine for Pop TV in the amount of EUR 4.9 million was later declared null and void by the court in the judicial part of the misdemeanor procedure.

The above arguments, individually and collectively, clearly indicate that AVK’s ruling on the fine is unsubstantiated and the Extraordinary Administrator of Agrokor has to express serious concerns that the ruling has only been passed to serve as a means to expropriate Mercator shares.

The seizure of Agrokor’s Mercator shares was executed without any court decision, pursuant to a law that as a rule applies mostly to traffic offences. Such actions, irrespective of the final outcome, render Slovenia exceptionally insecure for foreign investors and call into question Slovenia’s commitment to compliance with Article 63 of the Treaty on the Functioning of the European Union, which ensures that the fundamental principle of European Union of the free movement of capital between EU Member States is respected, and certain provisions contained in the European Convention on Human Rights, including the protection of private property.

We have today informed the Embassies of all EU member states in Slovenia, as well as the US and Russian Embassies, given the origin of the key investors in Agrokor, of the aforesaid facts. The Extraordinary Administrator of Agrokor shall continue to protect the company’s property with all available legal means.

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