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Fortenova, the Croatian business that emerged from the restructuring of the now defunct Agrokor, has snapped up the dairy assets in the city of Osijek owned by German food company Meggle.

In July, Meggle announced it planned to exit the Croatian market due to challenging business conditions and advised it would close down its facility in Osijek, its sole plant in the country, with all the 160 workers employed at the site to lose their jobs. The plant manufactures fresh and UHT milk, yogurt, cheese and butter.

Local food group Belje, which is owned by Fortenova, will now take control of the plant and its production line, with a plan to start manufacturing its own products from 1 January, including “higher added value” lines using a “certain quantity of milk” from Meggle’s existing suppliers.

While Fortenova said in a statement the “need for employees is still under review”, it added Belje is expected to retain around 100 of the staff. 

Marjan Vucak, the president of Meggle in Croatia, said: “After having made the final decision on closing down our production in Croatia, the Meggle group has exerted maximum efforts to find a buyer for the assets in order for as many of our employees as possible to have new employment after 31 December and for our contractors not to have any standstill in the purchase of milk.

“Until the end of the year, Meggle shall continue to restructure its operations, in accordance with the agreement reached with the trade unions, while meeting all the assumed obligations in time and in full.”

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By GlobalData

Belje mainly manufactures the ABC brand of cheeses and was looking to expand its capabilities when the Osijek plant, located in the Slavonia region, effectively came on the market. Financial terms of the agreement, which is subject to regulatory approvals, were not disclosed.

Fortenova CEO Fabris Peruško added: “With the Osijek plant we have secured the pre-requisites for the development of new products, made of local raw materials, of premium quality and higher added value. With this move we shall continue to work on the preservation and further growth of the local agricultural production, which along with saving existing and opening new jobs, is of great significance for Slavonia and the broader community.”

Andrej Dean, the president of Belje, said the dairy category is one of the major focuses of Fortenova within a five-year strategy plan through to 2025, and his firm will be “the platform on which the development in that segment will gain momentum”.