Branko Roglić, one of the most successful Croatian entrepreneurs, speaks about Agrokor’s future and other topics.
Branko Roglić is one of the most famous and most successful Croatian businessmen, and his Orbico Group is one of the largest European distributors. In an interview, he talks about the crisis and future of Agrokor, the activities of the Croatian government, the current state of the Croatian economy and other issues, reports Jutarnji List on August 14, 2017.
About half a year has passed since the outbreak of the crisis in Agrokor. Were you surprised by what happened in the largest Croatian company?
I think this needed to happen. I hope this is the ultimate end of one of the ways of doing business that was created during the transition of the Croatian economy. Obviously, there were certain links between Mr Todorić’s private property and the state. This model of activity is not good, and I believe that it will now be rejected and that market relations will be established as in any other capitalist state. I think we can expect a lot of court proceedings with regards to Agrokor.
Do you expect the company to survive?
I am not sure Agrokor will be able to remain as it is. That would be good, but obviously, it is not possible. It will continue as a group of companies that are sustainable in the long term. But, some companies will not be saved.
Indeed, some people accepted its way of doing business. For example, these famous bills of exchange. I was the first who did not accept them. What kind of financial instrument is that? If Agrokor does not pay, I have to pay for them? Bills of exchange should be a guarantee of payment. Where is this guarantee? It is evident that this was an accepted way of doing business by companies that were within that Agrokor circle. Maybe state institutions were involved. Now, we see this new information about the role of the state in financing Agrokor, about which we did not know anything before, but someone obviously knew about it.
Your company, Orbico, was among the first companies to force payment from Agrokor. You were criticised at the time because you started an avalanche.
I was right. I did not do anything I did not do in any of the other eighteen countries in which I do business. My conscience is clean, and those owners who have allowed their companies to be exposed with more than 70 percent of their revenues to a single company are in fact not the owners at all. I do not understand those people.
However, the situation with Agrokor can hardly be characterised as a usual business situation.
You are right; the collapse of such a large company with such a significant influence on the economy has not been experienced in any of the countries in which we do business. But my job and responsibility are for the benefit of my employees and my company.
How much is Agrokor in debt towards Orbico?
We have a debt of only approximately 3.5 million kunas, and this is being solved in the context of the extraordinary administration process. Frankly, I do not participate in the meetings of the suppliers and the Management Board.
Are you still delivering goods to Agrokor?
Yes, the cooperation is good for now, and we have agreed on advance payments until the situation stabilises.
Are you interested in taking over some of Agrokor’s companies?
We are not considering that, but if we could help, we would be thrilled. So, if we assess that we can provide long-term sustainability to some of its companies, we would be interested in doing so.
Can “Lex Agrokor” prevent a systemic crisis in the Croatian economy?
That was the government’s goal, because the collapse of Agrokor threatened the entire Croatian economy since a large number of strong domestic companies were its partners. We have to change the way of doing business. First of all, our businesses must turn to the European markets and give up on the idea of being able to lean on a single large domestic buyer. Secondly, a lot more modesty is needed. We have to change our economic paradigm. When I said we would love to help, I was referring to that.
We have to accept Europe as a market and finance the development of the business from our own profits, and not from loans. That is my philosophy. Since the company’s establishment, we have reinvested 90 percent of the profits and paid out only ten percent. This has enabled us to develop and maintain a low level of indebtedness. I appeal to my colleagues: try to create profits and use them to grow your business. You should not flaunt your wealth by buying yachts and villas. You need to take care of your people and create a sustainable business. That is the primary task of entrepreneurs.
How do you assess the work of the current government?
Prime Minister Plenković is moving very slowly, but it seems to me he is going in the right direction. That is probably a consequence of the situation around him, which is not good. But I support him. He had a right approach in the Agrokor case, and it is slowly moving towards a positive trend. He is a European man and opening up towards Europe is our most vital national interest, so I hope that he knows that growth rates of less than 5 percent will not solve our problems. I have always said that we did not enter the European Union, but we just came back to where we have always belonged. Now we just have to take advantage of that.
Translated from Jutarnji List.