An unexpected decision by one of the largest Croatian privately-owned companies.
About two years after the opening of a modern factory in Nova Gradiška, in which it invested about 100 million kunas, Atlantic Group has decided to sell it. The sale of the plant in Nova Gradiška is part of a 200 million kuna transaction involving the sale another sports food production facility in Germany, reports tportal.hr on 15 July 2017.
In addition to manufacturing its own brands (Multipower, Champ and Multaben), Atlantic used most of the capacities of these two facilities to produce private labels for other companies. However, after a 10-year contract with the American multinational corporation Herbalife expired in 2015, a significant part of the production capacities has remained unused. It is clear that the termination of cooperation with Herbalife was undoubtedly an element in the decision to sell the plants.
On the other hand, Atlantic explains that “the production for other companies is no longer in the company’s focus.” “Atlantic Group continues to focus its business operations on the development of its own brands, which is best demonstrated by the latest research conducted by Valicon, according to which four of our brands (Cedevita, Argeta, Smoki and Cockta) are positioned among the top 10 brands in the five largest markets in Southeast Europe,” said Atlantic.
The company added that looking at individual countries, Atlantic’s brands are leading in three countries – Argeta is the strongest brand in Bosnia and Herzegovina and Macedonia, while Barcaffe is the strongest brand in Slovenia. Also, Argeta is also the leader in the spreads market in Austria, Multipower is the strongest brand of sports nutrition in Europe with a prospect of further growth, while DonatMg has been declared the best mineral water in Russia.
“The strength of our banded business justifies the decision to further focus on the development of our own brands. The third party service production is not in the focus of the company and has been sold to Belgian strategic partner Aminolabs Group for 200 million kunas,” said Atlantic.
Atlantic has invested about 100 million kunas at the plant in Nova Gradiška. The project was funded by the loan from the European Bank for Reconstruction and Development and company’s own resources. Nova Gradiška was selected as the most favourable investment destination in competition with more than 90 other locations.
The funds received from the sale of two facilities will be used for further debt reduction, which will increase the financial stability of the company and provide even greater room for additional investments, both in organic growth and consideration of new acquisitions. This potentially involves the construction of a children’s food factory in Russia, which has been temporarily suspended in anticipation of the final resolution of the Russian sanction crisis and the stabilisation of the Russian ruble.
