CROATIA: Podravka to axe 340 jobs

By Hannah Abdulla | 19 February 2014

Podravka has announced it is to make 340 job losses

Podravka has announced it is to make 340 job losses

Croatian food company Podravka is set to axe 340 jobs as part of a redundancy programme.

Employees affected work in positions within meat processing unit Danica, as well as the Podravka parent company itself. Around HRK45m (US$8.1m) has been earmarked for severance costs.

"Implementing [the programme], we make the remaining jobs sustainable and create presuppositions for Podravka Group's future growth and development," Zvonimir Mršic, Podravka's management board president, said.

Podravka published a statement from Ksenija Horvat, the president of its works council and the main union commissioner of the Podravka PPDIV union, who said the redundancies were a way of "rejuvenating the company".

Horvat added: "This is not a small number of our workers that are leaving the company, but considering the economic situation, the offer from the Employer is more than fair."

Last week, Podravka reported its results for 2013. It said "all levels of profitability" improved last year, which the company described as a "significant turning point" for the business.

The company, which sells products from baby food to meat products throughout Europe, booked an underlying net profit of HRK200m, compared to HRK112.6m in 2012.

The result included expenses from a restructuring programme, which has seen Podravka line up assets for sale.

The group's bakery and beverage busineses are to be offloaded, as well as part of its frozen food divison.

Operating profit was up 20.6% at HRK131m as Podravka trimmed marketing, selling and distribution costs. Sales were flat at HRK3.63bn as a fall in revenue from Croatia, Podravka's largest market, offset improvement elsewhere.

Show the press release

Early this year Podravka started creating the provision program for surplus workers. Consulting with the Workers Council was performed and Podravka accepted the majority of suggestions provided by the Council, and concerning the provision for surplus workers. This year's program will include 340 workers of Podravka d.d., Danica d.o.o. and Belupo d.d., and a total of HRK 45 million will be earmarked for implementing the Program.

“Implementing this Program we wanted to show our responsibility and social sensitivity towards workers leaving our company, compliant to our current capacities. Implementing it we make the remaining jobs sustainable and create presuppositions for Podravka Group's future growth and development. Providing severance payments which are higher than those required by law, we want to thank our workers who have integrated their active life into this company for their great contribution to the development of Podravka Group"  - Zvonimir Mršic, Podravka Management Board President said.

Provision program is based on business reasons, and consists of 3 possible models:

•    severance payment amounting to net HRK 5,000.00 for each year spent at Podravka Group, if the worker decides to accept the termination as on 31 March 2014,
•    lawfully set severance payments, with the use of proscribed period of notice,
•    workers who in 2014 comply with retirement conditions have been offered the possibility to supplemental purchase of the retirement conditions, pursuant to the Life-time severance payment Act i.e. pension supplemental purchase, which means that they would immediately start receiving their pension as if they worked until lawfully proscribed years of service. 

"We see this severance program as change of generations or rejuvenating the company, in a manner that is socially responsible, and also acceptable for the unions. In the upcoming period we expect new employment of workers with university degree, and after many years also workers with secondary school education. This is not a small number of our workers that are leaving the company, but considering the economic situation, the offer from the Employer is more than fair - Ksenija Horvat, Podravka Workers Council president and also the main union commissioner of the Podravka PPDIV union said.

Original source: Podravka

Sectors: Baby food, Canned food, Cereal, Condiments, dressings & sauces, Emerging markets, Frozen, Meat & poultry, Snacks

Companies: Podravka

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