The Efficiency Project- Podravka optimises production of Vegeta in the EU market

Within the Efficiency Project, Podravka has decided to optimise its production processes related to its best-known brand – Vegeta. Therefore, from the beginning of 2005 Vegeta will be produced in Koprivnica and the Poland town of Kostrzyn for the European Union market. Production of Vegeta in Mohacs, Hungary, will end.

At the beginning of 1996 Podravka launched the production of Vegeta in the Hungarian town of Mohacs in order to optimise costs caused by customs regulations. However, as the new countries joined the European Union, a single market has been created where it is no longer necessary to maintain several production locations within the EU area. For this reason, by the end of this year the production of Vegeta in the Mohacs plant will end. All employees (59 of them) working in the Mohacs plant will be taken care of in accordance with the provisions of the valid Hungarian Labour Act, which includes severance payments and the opportunity of retraining.

Podravka has been present in the Hungarian market since 1993 and it has its own company in Budapest with 108 employees and a developed distribution network. Vegeta is well-known in Hungary, which is proven by the fact that Vegeta recently received the Superbrand Hungary award. Together with its best known brand Vegeta, Podravka is present in this market with other groups of products, such as soups. Also, apart from its own brands, Podravka uses its own distribution network in this market to distribute Heinz, Adria and Kraš products.

Podravka’s company in Hungary will continue to do business successfully in order to create one of Podravka’s sales and commercial centres in the EU. Business operations in Podravka Hungary will be focused on strengthening the Vegeta brand, expanding Podravka’s strategic business and additional range of products, as well as additionally developing of the gastronomic segment.

Vegeta is Podravka’s best-known brand whose share in the total revenue of the Podravka Group in 2003 was 18.5%. Most of it is exported to the market of the European Union.