Energy efficiency investments to boost competitiveness of major Croatian company

The European Bank for Reconstruction and Development (EBRD) is supporting investments in improving the energy efficiency of Podravka d.d. – one of the largest food producers in Croatia – with a €9.9 million loan.

The loan will finance investments focused on improvements in various factories and the company’s headquarters building. The improvements are expected to generate annual savings estimated at 5,614 kNm³ of gas, 7,309 MWh of power, 45,000 m³ of water and 14,918 tCO₂. These efficiency gains have been identified by the independent consultant that performed an energy, resource and building stock assessment.

Investments in energy efficiency form an integral part of Podravka’s wider efforts to strengthen the company’s competitiveness. The company’s strategic plan for 2013-18 aims at bolstering Podravka’s market position, particularly in lieu of Croatia’s accession to the European Union.

Podravka is the leading branded food company in Croatia, and has subsidiaries in 15 countries worldwide, and 15 production facilities in four countries. In 2012, Food and beverages accounted for 77 per cent of the company’s sales, while pharmaceuticals constituted 23 per cent.

Over the past few years the company has emphasised export growth: in 2012 exports constituted 53 per cent of sales, compared to 47 per cent in 2009. The company’s main export markets are south-eastern Europe (47 per cent of total exports), while eastern Europe (12 per cent increase in sales from 2011-12) and Russia (40 per cent sales increase since 2009) are gaining momentum.

To date, the EBRD has signed some 150 projects in Croatia for a total amount of €2.75 billion. The Bank’s investments are divided between the industry, commerce, agribusiness, energy, financial and infrastructure sectors. This year alone the EBRD plans to invest some €230 million in the country, focusing on corporates, municipalities and support for cross-border initiatives.

The loan is being provided under the Local Enterprise Facility, a €400 million facility for investments in enterprises in the Balkans (Albania, Bosnia and Herzegovina, Bulgaria, Croatia, FYR Macedonia, Kosovo, Montenegro, Romania and Serbia), Turkey and the southern and eastern Mediterranean (SEMED) region (Egypt, Jordan, Morocco and Tunisia). It provides a wide range of flexible financial products, including equity, quasi-equity and debt financing to address companies’ needs.