Podravka Expanding in Russia

Total Croatia News

Croatian company could soon open a factory in Russia.

Croatia’s largest food company Podravka recently celebrated 50 years of activities in the Russian market. Back in 1967, as part of a trade agreement between former USSR and Yugoslavia, Vegeta and Podravka soups entered the Russian market and very quickly gained confidence among consumers, which is why the range was quickly extended to other products, baby food, chutney, tomato-based products, frozen vegetables, pates, etc., reports Večernji List on February 8, 2017.

Nowadays, Podravka’s products are available throughout the Russian Federation – from Kaliningrad to the Far East, and Vegeta is the leader. “The goal of Podravka in the next five years is to grow in international markets, both organically and through strategic partnerships with local companies. We see Russia as the main market for further growth and development using both models, and we expect double-digit growth. Russian market has become Podravka’s first export market back in 1967. Since then, much has changed, but in the global strategy of our company, Russian market is a leader in terms of growth and possibilities”, said CEO of Podravka Zvonimir Mršić.

Asked by Russian journalists about the possible opening of a production facility in Russia, Mršić said that this was the plan four years ago, but it was stooped due to devaluation of the rouble. “However, due to the growth of the sales of Podravka’s products both in volume and in value on the Russian market last year, the plan could be realized by acquisition, a greenfield or a brownfield investment”, said Mršić.

In the first nine months of last year, the Russia, CIS and Baltic region posted the highest growth within Podravka Group. The total sales of food and medicines to the Russian market were about 23.5 million euros, which was an increase of 55.2 percent from a year earlier. During 2016, Podravka sold more than 30 million products in the Russian market. The total revenues of Podravka last year were between 530 and to 550 million euros, which means that nearly five percent of the revenues come from the Russian market.

“Over the past five years, we have had continuous growth which most started after the establishment of our own company in 2014, when we began signing direct contracts with retailers and distributors, which enabled us to widen the range of products and reach all parts of the Russian Federation. Accordingly, since 2014 we have doubled growth in the Russian market despite sanctions, devaluation of the rouble and other adverse circumstances”, said Damir Perlok, vice president of Podravka for the Russia and CIS region.

Depending on the category and type of product, Podravka is among the top three companies on the market. In the segment of universal spices, which has the highest priority, Podravka is the second largest producer by volume and value.

Podravka today exports to more than 60 countries, owns 15 companies in different markets, it has 12 branches, it has its own distribution in 9 countries, as well as 17 production facilities in 4 countries. Overall, it employs 6,200 people, while Podravka Russia currently employs 27 employees.


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