Serbian fruits again in Slovenian juices - Nectar becomes regional king of drinks by taking over Fructal for EUR 50 million

(Bojan Radun)

Serbia's Nectar announced today that the formal acquisition of Slovenia's Fructal should be completed until the end of October 2011.

- Nectar and Fructal will register a consolidated revenue of over EUR 140 million in 2011, which may lead us to the group of 20 or even 15 largest manufacturers of juices and drinks in Europe - Bojan Radun, executive director of the Backa Palanka-based juice manufacturer, said at a press conference in Belgrade.

Radun reiterated that his company would pay EUR 35.3 million for a 93.7%-stake in Fructal.

- Along with the remaining 6.3% of shares, which we are entitled to and have an obligation to purchase from minority shareholders, and the existing debts of Fructal, the total price amounts to about EUR 50 million.

This is the largest Serbian investment in Slovenia so far and the biggest foreign investment in Slovenia this year in general. The last but one step in this process will be verification of the acquisition by the Shareholders' Assembly of Pivovarna Lasko on Saturday, July 30th. Nectar and Fructal will then need to acquire approvals from the antitrust commissions in the countries they operate in.

Everybody sells, they buy - where does the money come from?

At the time when most businessmen in Serbia sell their property in order to repay loans, Nectar decides to buy another company.

The owner of Nectar, Slobodan Radun, said that their six-month negotiations had been very serious and that Slovenians "took more money from their pocket than they planned to give". However, according to analyses, he expects the investment to return in seven years.

Bojan Radun stressed that 15-20 percent of the investment would be provided from the company's own sources, from the cummulated profit of Nectar, while the rest would be secured from a loan. He added that the Board of Directors of the European Bank for Reconstruction and Development had officially approved the whole project on Thursday. As he explained, they were granted a EUR 35 million loan by the EBRD.

He also pointed out that the existing loans of Fructal would definitely be refinanced.

Plans

Radun underlined that the brand Fructal would be preserved because, as he explained, "it is one of the most valuable things in this acquisition". Also, Nectar has promised not to lay off any workers at the factory in Slovenia, but the relation towards all 432 employees at the factories in both Slovenia and Macedonia must be the same.

The Executive Director of Nectar stressed that the company would like to expand to the European Union upon the acquisition of Fructal and return the former glory to Fructal brand, which used to be one of the strongest brands in Yugoslavia.

- The only brands in our industry that are regionally positioned are Nectar, Life and Fructal, all of which are now in our possession - said the Executive Director of Nectar.

Development of fruit production in Serbia

Aside from keeping the factories of Fructal in Ajdovscina and Kamnic and developing the fruit production in Slovenia, Nectar will also use fruits from Serbia that Fructal has not been buying over the last 10 years.

Over the last few years, Fructal has been importing the fruits that do not grow in Slovenia from Italy, Poland, Spain and Greece. Now, after a ten-year break, fruits from Serbia will again be used in the production of Fructal juices.

- Strawberries, raspberries, blackberries, cherries and probably peaches, apricots and apples will be purchased from the fruit producers in Serbia - Slobodan Radun told eKapija.

(Slobodan Radun)

He explained for our portal that they were already present in almost all markets where Fructal operated and that the acquisition would only increase the market shares of both brands.

- We are exporting our products to Italy, Croatia and Kosovo, but Fructal has a bigger market share in each of these markets. Our market shares in Bosnia are equal, while Nectar is more dominant in Montenegro and Macedonia.

According to Bojan Radun, over the last few years, Nectar has been registering revenues ranging from 60 to 70 million euros, while the EBITDA in the previous three years amounted to 9-12 million euros.

Since Slovenia entered the EU, Fructal has had a period of bad results. Last year, Fructal reported a total revenue of EUR 56 million and the EBITDA of about EUR 5 million.

J.Đ.