Croatian Government Gives Borovo a Loan, Not a Permanent Solution

Lauren Simmonds



As Poslovni Dnevnik/Marija Brnic writes on the 21st of May, 2020, the well known Croatian Borovo factory proved to be the topic of a turning point in the relations between Prime Minister Andrej Plenković and Vukovar Mayor Ivan Penava and his departure from HDZ.

Both politicians, despite their differences, are right in their own respective ways when they talk about the role the state actually plays in Borovo’s operations and business.

The company is being kept afloat only thanks to the extraordinary income from various combinations with assets, and loans guaranteed by the Croatian state.

However, Borovo must pay back the last loan in the amount of 6.1 million euros, which was rescheduled back at the end of 2019, in just half a year. This poses a tremendous problem because so far, Andrej Plenković’s government has not dealt with a long-term solution, nor has it sought a buyer despite there having been many inquiries. Instead, it just provided the aforementioned state loan with the prescribed time limit attached.

As such, very quickly following its formation, the next Croatian Government will have to take a formal position as far as is possible in regard to the beloved brand Borovo.

Footwear production is not of strategic importance for the state, but due to the area in which it is located, Borovo with its 600 employees has a special status.

Prior to approving the penultimate long-term loan, the Croatian Government requested that the management board of Borovo draw up a restructuring programme within a three month period, but in the meantime, this has been unfortunately all but forgotten.

The fact that there is potential for production has been shown by the fact that the German Ricosta, which has been operating there for several years, recently invested as much as eight million kuna in expanding production.

For more, follow our dedicated business page.


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