Podravka is closing its operations in China and sub-Saharan Africa – and the Croatia-based FMCG group is monitoring the performance of its business covering the Middle East and north Africa.
Announcing its 2017 financial results last week, Podravka said its profits, which fell more than 70%, had been “significantly burdened by the negative results of the markets of Africa, China and MENA”.
“Both the management and the supervisory board of Podravka determined that the business operations in the markets of Africa, China and MENA are not sustainable, because ever since 2015 they continuously deviate from the business plans which were at the time a foundation in making business decisions on investing in the stated markets,” Podravka said in a statement.
The group, the owner of brands including Vegeta, Dolcela and the namesake Podravka, has a subsidiary covering markets in west and east Africa, as well as a factory, in Tanzania – a plant the company only opened last year. It also has a subsidiary covering the Middle East and north Africa, or MENA, region. In China, Podravka has a representative office.
Speaking to just-food, a company official said: “The management board has adopted decisions to terminate business operations in Tanzania and China, while in the MENA market a business model with lower expenses was introduced, and the final decision on operations in this region will be made after business results for the first six months of 2018.”
Asked if exports would continue from Croatia to China and sub-Saharan Africa, the official added: “We will try to do business on these markets from Croatia.”