Croatian food company Podravka has decided to close its factory in Poland.
In the interest of reducing operational costs, the decision was adopted to gradually cease the production in Podravka's Polish plant at Kostrzyn, which operates within Podravka's subsidiary Podravka Polska.
The process of cessation of production in Poland should be completed by 31 March 2015. Podravka Polska will, as part of a redundancy scheme and in agreement with trade unions, disburse severance payments to around 45 workers.
The Koprivnica-based company produces a number of food products including the popular spice Vegeta.
With Croatia joining the EU and the trade free zone, Podravka, who have been present in Poland since the early 1990’s, decided to operate production solely from its Koprivnica base.
This decision will have a positive impact on business operations in 2015 as it will increase utilisation of production capacities in the plants in Koprivnica, thus reducing the product unit costs and staff costs.
It is estimated that the negative impact of the cessation of production in Poland in 2014 will amount to around HRK 20.6 million (€2.68 million), for the most part accounted for by the once-off write-off of assets and the provisions for severance payments.
The decision to close the production capacities in Poland will not have any negative impact on Podravka's sales in Poland and the company's focus on expanding the range of products offered to Polish consumers will continue.
Podravka's factory in the Polish town of Kostrzyn, on the border with Germany, where it produced Vegeta, soups and powder products, opened in late 2000 investing around €17.5 million.
It was the first Croatian investment in production abroad. Over a period of 10 years, Podravka was completely exempt from paying income tax, followed by 50 per cent.
