The buyout of the Tobacco Factory in Banja Luka will preserve production and much-needed jobs.
By Ana Lovakovic for Southeast European Times in Sarajevo -- 05/02/13
The Tobacco Factory buyout will save hundreds of jobs. [Mladen Dragojlovic/SETimes]
The Bulgartabac Holding Group's takeover of the Tobacco Factory in Banja Luka is expected to be completed this month when the final agreement is signed, saving hundreds of jobs.
"Clearly, this means a lot for Bosnia's vulnerable economy, which lost 90,000 jobs last year. In the end, it all depends on what Bulgartabac will offer in the final contract; whether it will make a compromise with the company's worker union about the conditions of work and labour valorisation," Zvonko Papoci, head of the tobacco production section at the Foreign Trade Chamber of BiH, told SETimes.
Bulgartabac, a Bulgarian company, agreed to the deal with the factory's majority owner, Antonic Trade, in a meeting in Belgrade in early January.
Experts said the buyout will end the uncertainty of the BiH tobacco producer's fate, and that of its 260 workers whose employment has been uncertain since the firm was privatised in 2006.
Republika Srpska's government sold 55 percent of the factory's shares to Antonic Trade for 1.5 million euros in 2006. The privatisation agreement was not met by the new owner and the company was brought to the brink.
Last year, the factory's losses amounted to 500,000 euros and the total liabilities increased by 8.5 million euros.
"Post-privatisation, the contract stipulated producing 1,000 tonnes of cigarettes per year, but the average annual output for the last three years was 472 tonnes. If Bulgartabac increases production, it is already promising," Papoci said.
Factory workers have welcomed the new owner who, they expect, will continue the organisation's production.
"There is hope and promise to go forward because Bulgartabac is a strong company. We worried for a long time, our company is in debt and keeping up production was very difficult," Zlata Radinkovic, a 35-year-veteran labourer at the Tobacco Factory, told SETimes.
Bulgartabac officials said the firm's goal is to place their products duty free from BiH to the CEFTA countries Serbia, Montenegro, Macedonia, Moldova and Albania, and use the bi-lateral free trade agreements BiH signed with Turkey.
The BiH giant could not compete internationally, and so it was inevitable that the company would be sold to a regional or a global industry leader, according to Nebojsa Antonic, majority owner of the Tobacco Factory.
"We have faced financial difficulties and constant increases in excise duty on cigarettes. It was hard enough to enter the market [and compete] with other big companies like Philip Morris, Tobacco Factory Rovinj and Imperial Tobacco," Antonic told SETimes.
Antonic said Bulgartabac entered the scene just before the firm began negotiations with the Republika Srpska government to recapitalise the Tobacco Factory or to terminate the privatisation contract to stabilise the firm and preserve jobs.
The BiH entity attorney general's office filed a lawsuit against Antonic Trade for breaching the privatisation contract, and demanded 4.3 million euro in damages.
The government halted the legal process once Bulgartabac made the offer.