tens of thousands fear for jobs as balkan retail giant in crisis
Last Updated : GMT 09:07:40
Egypt Today, egypt today
Egypt Today, egypt today
Last Updated : GMT 09:07:40
Egypt Today, egypt today

Tens of thousands fear for jobs as Balkan retail giant in crisis

Egypt Today, egypt today

Egypt Today, egypt today Tens of thousands fear for jobs as Balkan retail giant in crisis

The financial woes of the Balkans food giant Agrokor have rattled its 60,000 workers
Zagreb - Arab Today

 From cashiers and farmers to drivers and travel agents, tens of thousands of people are fearful for their jobs linked to the Balkans' biggest food producer and retailer, as it struggles with crushing debt.

The financial woes of Croatian group Agrokor have dominated headlines in recent weeks after global agencies began slashing its credit rating.

That has rattled Agrokor's 60,000 employees in the region, two-thirds of whom are in Croatia making it the country's largest employer.

Agrokor's debts were estimated in September at six billion euros ($6.3 billion) -- an alarming sum for a company whose revenue of 6.7 billion euros accounts for 15 percent of Croatia's gross domestic product (GDP).

The group's leading business is the supermarket chain Konzum, but it has acquired a wide range of companies including in agriculture, food production, tourism and distribution.

Also anxiously watching developments are Agrokor's small suppliers, who after months of waiting for payments now wonder if they will be paid at all -- and to whom they will sell in the future.

"It is hard to continue production without money, but it is also difficult to enter a new market," said Zvonimir Belic, a leading regional tomato producer who currently sells around a third of his goods to Agrokor.

"It's not only about saving Agrokor, but about saving Croatian firms. We are running out of time... Decisions need to be taken," Belic said.

The impact goes beyond the Balkan country of 4.2 million people. Agrokor has businesses in neighbouring Bosnia, Serbia and Slovenia, while its network of suppliers means tens of thousands more are affected in a region where unemployment runs high.

"I am afraid that Agrokor will be a very difficult issue in Serbia too," Serbian Prime Minister Aleksandar Vucic said this week in Bosnia, where he discussed the crisis with his Croatian counterpart Andrej Plenkovic.

- Too big to fail? -

Analysts say Agrokor, whose main creditors are Russian state-owned banks Sberbank and VTB, accumulated debt through aggressive expansion and expensive borrowing -- a snowball that eventually turned into an avalanche.

In January, Agrokor withdrew from a loan deal with international creditors, triggering a surge in its bond yields.

Some companies within the group had their accounts frozen due to unpaid state taxes and obligations towards suppliers.

"Financing was short-term, under unfavourable conditions... while expansion was too fast on very fragile financing sources," economic analyst Luka Brkic told AFP.

Owned by Croatian businessman Ivica Todoric, Agrokor is almost as important as tourism to Croatia, which emerged from a six-year recession in 2015 and is one of the European Union's poorest-performing economies.

"A collapse of Agrokor would lead Croatia into recession, push it back into 2008," warned Vladimir Nisevic, editor-in-chief of the Poslovni dnevnik business newspaper.

Croatia's Chamber of Agriculture has urged the government to make suppliers' payments a priority issue, warning of the threat of farm closures and a "further exodus from rural areas".

Faced with a company that may be too big to fail, Croatia's parliament on Thursday adopted an emergency law aimed at saving troubled giant firms like Agrokor and shielding the country's economy through a restructuring process.

Opposition lawmakers argued however that the law would not protect employees and small suppliers but rather management.

- 'Acute' situation -

Separately, Agrokor and its board of creditors have signed a "standstill agreement" freezing its repayment of debts to banks, while naming an independent expert as chief restructuring officer.

"There is no guarantee we will succeed," restructuring expert Antonio Alvarez told reporters Monday, describing the situation as "pretty acute".

Trade unions echoed his view, saying members were contacting them daily with fears about their wages and future.

"Easter and the tourist season are approaching. If that is missed, it would be impossible to compensate for," commercial union leader Zlatica Stulic told AFP.

Todoric, 66, who rarely makes media appearances and is known locally as "The Boss", has not made any public comments on the crisis himself.

The entrepreneur started in the flower business in the 1970s and founded Agrokor just before communist Yugoslavia fell apart in the 1990s, leading to the privatisation of state-owned companies.

Todoric was initially seen as a role model who helped Croatia's post-war economy recover with his successful business empire.

He became one of the wealthiest and most influential men in the Balkans, but critics accuse him of abusing his monopoly position and becoming untouchable.

source: AFP

Todoric's employees now say they are scared.

"Eventually us ordinary folks will pay for all this, in one way or another," said Josipa, a cashier in a Konzum store in Zagreb, who didn't want to give her full name.

 

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

tens of thousands fear for jobs as balkan retail giant in crisis tens of thousands fear for jobs as balkan retail giant in crisis



GMT 15:49 2011 Friday ,10 June

Oil firm wins injunction against Greenpeace

GMT 10:27 2015 Monday ,06 July

Mini to launch ‘Clubman’ in 2016

GMT 17:21 2011 Wednesday ,23 February

Lampard Desperate To Win The Champions League

GMT 10:13 2018 Tuesday ,09 January

Barcelona to unveil 160m Coutinho

GMT 23:03 2017 Monday ,16 January

Bank of Korea: Money Production Cost Rise in 2016

GMT 20:33 2011 Friday ,06 May

Asad\'s army arrests all men over 15 in Daraa

GMT 11:55 2011 Tuesday ,29 November

Ultrabooks could save the PC

GMT 13:02 2012 Saturday ,01 September

Zombies and Morons compete

GMT 07:31 2017 Tuesday ,20 June

Sisi keen on attaining unity

GMT 11:50 2015 Saturday ,26 September

The Library of Fragrance announces January launches

GMT 06:28 2014 Saturday ,18 October

Asian Junior Volleyball tourney kicks off in Bahrain

GMT 13:31 2016 Saturday ,13 February

Greek farmers clash with police

GMT 07:40 2012 Friday ,06 July

Deeds, not words, matter the most

GMT 14:16 2016 Wednesday ,23 November

Gigi sorry for ‘racist’ Melania Trump impression

GMT 22:52 2011 Tuesday ,26 April

Nigeria prepares for parliamentary elections

GMT 20:35 2016 Tuesday ,04 October

Paris climate deal: EU backs landmark agreement
 
 Egypt Today Facebook,egypt today facebook  Egypt Today Twitter,egypt today twitter Egypt Today Rss,egypt today rss  Egypt Today Youtube,egypt today youtube  Egypt Today Youtube,egypt today youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

egypttoday egypttoday egypttoday egypttoday
egypttoday egypttoday egypttoday
egypttoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
egypttoday, Egypttoday, Egypttoday