The Slovenia Times

New Fructal Owner Satisfied with Acquisition


Nectar, a Serbian family-owned company at the core of the biggest fruit processing group in the region, acquired Fructal from the Pivovarna Union brewery, paying a total of EUR 50m for the company, including debt.

Slobodan Radun, the owner and chairman of Nectar, says the price was "unrealistically high", while he has also suggested it was worth it, telling an interview with the STA that their ambitions for the company are being fully achieved.

"Fructal is a healthy company today," he says, arguing the company had been sidelined under the previous owners. One of the best known brands in the former Yugoslavia, Fructal became part the beverage group Pivovarna Laško in 2001, but had to be offloaded after the leveraged management buyout of Laško went awry.

Operating in the red before the takeover, Fructal generated a profit of EUR 2.6m on EUR 45m in revenue last year, reporting a 27% growth in earnings before interest, taxes, depreciation and amortisation (EBITDA) from the year before.

The company employs 267 workers with the value added value per employee at EUR 46,185 last year. Down from 364 in 2011, the headcount is considerably below Fructal's heyday before the breakup of the former Yugoslavia, when the loss of markets forced the company to cut its workforce to 780 from 1,500.

Radun says the staff numbers have been adjusted, that there have been some redundancies, while some jobs have been lost on account of attrition when retired workers were not replaced. He says that only a minor part of production has been moved to Serbia.

Čedo Praška, Nectar general director, argues the company merely optimised production, while it has not moved a single production line. Just like some of Fructal products are bottled elsewhere, so are certain Nectar products bottled in Ajdovščina.

Nectar has according to Radun long-term goals with Fructal, with Ajdovščina as a development hub for the group in that part of the world. Nectar wants to develop both the location and the Fructal brand, which Radun says has and will continue to stand for quality.

The new owner has so far invested close to EUR 5m in the production location in Ajdovščina, according to Fructal boss Goran Medić, who says that much more has been invested in marketing and brand development. The company plans to continue investment to keep abreast with the latest trends.

The officials say they are trying to buy what they can from the local suppliers and even pay more for locally produced fruit than prices offered in neighbouring markets such as Italy or Austria. Radan says part of the reason is to keep interim costs in the purchase of raw material as low as possible.

The officials also pinpoint Fructal's importance for the local economy, saying it bought goods and services worth more than a million euros in the Goriško region last year and more than EUR 20m in Slovenia. It also paid almost EUR 2.5m in excise duties last year and EUR 550,000 local taxes a year.

Fructal is today present in more than 35 markets globally with Radun promising that every day is spent on marketing and penetration of new markets. The focus remains on Slovenia and the Western Balkans, while sales are also up in the markets of the EU, Middle East, North Africa, East and Central Asia.

Commenting on the business conditions in Slovenia, Radun cites a stable business and legal framework as an asset, while he is less happy about the excessive red tape. His associates complain of a lack of flexibility in the labour market.


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