Bulgartabac Holding to Acquire the Tobacco Factory in Banja Luka

March 15th, 2013 00:00

The Bulgartabac Holding Group's acquisition of the Tobacco Factory in Banja Luka is likely to be accomplished in February when the ultimate contract is signed, keeping hundreds of work opportunities. "Obviously, this signifies a lot for Bosnia's insecure economy, which recently lost about 90,000 jobs last year. In any case, it all depends on what Bulgartabac will propose in the last contract; whether it will offer a compromise with the company's worker union regarding the work conditions," declared Zvonko Papoci, manager of the cigarette production division at the Foreign Trade Chamber of BiH.

Bulgartabac, a Bulgarian tobacco company, decided to communicate with the factory's majority holder, Antonic Trade, at a conference in Belgrade. Specialists state the acquisition will stop the uncertainness of the BiH cigarette producer's destiny, and that of its 250 employees whose job has been unclear since the company was privatized in 2006. Republika Srpska's authorities sold 55 % of the factory's shares to Antonic Trade for about 1.5 million euros in 2006. The privatization contract was not welcomed by the new proprietor and the company was brought to present poor condition.

A year ago, the factory faced losses at approximately 500,000 euros and the debt constituted 8.5 million euros. "The contract planned manufacturing 1,000 tonnes of cigarettes annually; however the common yearly outcome for the previous three years was about 472 tonnes. In case Bulgartabac boosts production, it is already encouraging," Papoci mentioned.

Factory employees have welcomed the new holder who, they assume, will proceed with the organization’s production. "There is hope to move forward as Bulgartabac is a powerful company. Bulgartabac authorities stated the company's objective is to set their products duty free from BiH to the countries from Central Europe Free Trade Association as Serbia, Montenegro, Moldova and Albania, and apply the bilateral free trade deals BiH agreed upon with Turkey. "We have experienced financial problems and regular boosts in excise duty on tobacco products. It was difficult to get into the market when there are such giant cigarette companies as Philip Morris and Imperial Tobacco," Antonic stated.

Antonic added that Bulgartabac entered the industry right before the company started discussions with the Republika Srpska authorities to recapitalize the Tobacco Factory or to end the privatization contract in order to secure the company and keep work places.

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