Impact of Agrokor Crisis Alarms Bosnia's Leaders
Bosnian politicians seek urgent meetings with managers of companies linked to Agrokor, amid fears that the troubled Croatian giant's financial difficulties could affect their economy as well.
Thousands of jobs in Bosnia, where unemployment is already high, may be in jeopardy owing to continued uncertainly over the future of Croatian biggest private company, Agrokor, which is stuggling with debt and liquidity issues.
Agrokor's financial woes have sent shockwaves throughout several Balkan countries; apart from exerting massive influence on Croatia's economy, the company employs about 20,000 people in neighboring Bosnia and in Serbia.
It is estimated that suppliers and companies for major Slovenian retailer Mercator – which Agrokor bought in 2014 – employ another 70,000 in Slovenia.
Agrokor's eight daughter companies operating in Bosnia, including one of the biggest retailers, Konzum, now owe hundreds of millions of euros to suppliers in Bosnia, Bosnia's Foreign Trade Minister Mirko Sarovic told local media on Thursday.
"We are talking about a debt of at least 250 million Bosnian Marks [127 million euros] and this merits action by [Bosnia's state] institutions, as well as by entity-level institutions and the Council of Ministers," Sarovic said.
Sarovic said he had discussed the issue with the Chairman of the Council of Ministers [the Bosnian government] Denis Zvizdic and with Finance Minister Vjekoslav Bevanda - and they had asked for a meeting with the management of Agrokor's companies in Bosnia in order to determine the extent to which Agrokor's crisis was affecting them.
The meeting is expected to take place within this week, as Sarovic emphasized the urgency of the matter on Thursday.
The government of Bosnia's larger entity, the Federation of Bosnia and Herzegoviona, also discussed the issue on Thursday. Federation entity leaders also want to meet the management of Agrokor's Bosnian companies to determine the potential damage and discuss ways of tackling it.
Locals news portal N1 reported a likely meeting between Federation Prime Minister Fadil Novalic, representatives of the Foreign Trade Chamber, representatives of Agrokor's companies and the Croatian Ambassador some time within the week.
Bosnian dairy plant Milkos is a supplier to Konzum and cooperates with some of Agrokor's other daughter-companies in Bosnia.
Asked about Agrokor's debts to it, Milkos director Adin Fakic told BIRN he had recently met representatives of other concerned suppliers and they had decided not to make such information public until they see how the situation in Croatia develops. He said it was a sensitive business matter and the premature release of information could have unwanted results.
"This situation is definitely having a negative impact on business and it puts the jobs of employees in Bosnia and Herzegovina working for Agrokor's companies into question.
"We want this to play out in a positive way and those jobs to be preserved, as well as the jobs in companies that supply Agrokor and have cooperated with them for years," he said.
Fakic said he has been in regular contact with Konzum.
"The management of Konzum does all it can to be of service to us and provide us with relevant information. We have great cooperation, and we hope that this situation will be resolved as quickly as possible," he added.
- See more at: http://www.balkaninsight.com/en/article/bosnia-s-politicians-tackle-effects-of-agrokor-s-crisis-04-07-2017#sthash.naHaB9nh.dpuf