As Poslovni Dnevnik/Suzana Varosanec writes, the largest European distributor of consumer goods, the Croatian Orbico Group is continuing strongly with its development policies this year. With new investments financed primarily from the company’s own funds and carried out according to the proven best model of cooperation with developers, Orbico’s largest logistics and distribution centre is starting to be realised.
“With the investment of the company Orbico Hrvatska (Croatia) in Zdencina, a place situated along the Zagreb-Karlovac route, the construction of the first phase of our new logistics centre covering approximately 40,000 square metres is now beginning. We plan to move into it at the beginning of 2024,” announced Roglic after the contract with the contractor was signed.
In the continuation of the project at the same location, a second phase is expected through the expansion of the centre to include another 20,000 m2. With this, the Croatian Orbico Group is sticking with the characteristic transformation processes of its business, all led by digitisation and robotisation and investments in logistics.
The new logistics centre is in the function of business optimisation through cost reduction, and the location itself was chosen based on the same assumptions of economy, productivity and the profitability of business.
Record revenues in 2022
For more than half a year, they considered several locations for a new investment, including nearby Sveta Nedelja, the home of Rimac Automobili, as well as near the Hungarian-Croatian border. In the end, the calculations showed that Zdencina in Zagreb County is ideal for a number of reasons for the new momentum of Orbico’s business in Croatia.
The company already owns a number of warehouses across the country, and since a few years ago a large logistics centre in Dugopolje, as their main one in Dalmatia. With the new centre in Zdencina and further on the link with the existing one in Dugopolje, Orbico is completing a concrete solution for the biggest distribution problem in Croatia, which manifests itself in highly pronounced seasonality.
“When it comes to the distribution of goods, the main issue in Croatia is how to solve seasonality in the ratio of 1:17. This means that you need 1 tow truck for distribution in the winter, and as many as 17 in the summer, and I think this is the most difficult problem for all distributors in general. Under these conditions, you should also have optimal human resource management,” explained Roglic.
The investor in the new project is Orbico Hrvatska with around 1,250 employees out of a total of 7,500, and its activities in 2022 totalled a record 520 million euros in total revenue. The entire system boasts operations in 20 European countries, all of which also enjoyed business growth, generating an impressive 3.2 billion euros in total revenue last year.
In its expansion and development on the basis of the adopted business plan in the medium-term period, i.e. on the horizon of 2028, Orbico should generate revenues of 6 billion euros, which means that it will become twice as large as it is today. Within its current framework, growth is being achieved using the leverage of modern logistics, meaning that the Croatian Orbico Group is leading the way with investments in more than 200,000 m2 of storage space and a total of five LDCs. In addition to Croatia, there are also new logistics centres in Poland, Bulgaria, Romania and Hungary.
Around 40 million euros was pumped into this investment
For this investment, which is still in the stage of tendering for the selection of developers and contractors, it was stated that the amount involved was around 40 million euros. Roglic hasn’t revealed how much the post-pandemic crisis with the additional factor of inflation affected the final amount of the investment for now, but he did make sure to clarify that the company will first work under lease in the new centre, and that after the lease expires, Orbico will take over the facility fully.
“Through the rent, we pay for the investment and realise more new projects in cooperation with developers who are building our new logistics capacities. This is the best way to develop a business, especially when it takes place in several countries. Orbico operates in 20 different European countries, and we’re continuing to grow at a good pace, and I must highlight the fact that we don’t take loans. After some time has passed with our lease of the new LDC in Zdencina, we will buy the logistics centre,” concluded Roglic.
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