Business News

Merger to create agro co-op with a projected EUR 65m in annual revenue

Trebnje, 02 July (STA) - Two agricultural cooperatives operating in the south-east of Slovenia have announced plans for a merger that will create the largest cooperative in the country with almost 1,000 members, 260 employees and an expected annual revenue of almost EUR 65 million.

A letter on intent of was signed on Thursday for the merger of KZ Krka and KZ Trebnje under the wings of the latter, which is expected to be executed by 1 May next year at the latest.

Listing the reasons for the decision, KZ Trebnje director Stanko Tomšič highlighted the need for a more competitive market position, better services and helping out KZ Krka, which has been struggling with losses for several years.

While Tomšič said that no major layoffs were planned, KZ Krka acting director Martin Kambič also listed the optimisation of costs and a better negotiating position among the reasons.

The signing was moreover attended by KZ Trebnje president Anton Strah, who argued the future of Slovenian cooperatives lies in mergers.

He feels the best thing would be to form eight to ten major conventional cooperatives and a few specialised ones. "If this does not happen, we'll continue to have too much fragmentation and remain uncompetitive," Strah said.

KZ Krka, located in Novo Mesto, had EUR 17.5 million in revenue last year, mostly from the sale of meat, milk and other farm products. KZ Trebnje is the second largest co-op in Slovenia turnover-wise, having generated EUR 47 million in revenue last year, mostly through the sale of foodstuffs, technical goods and hospitality services.

According to the Agency for Legal Records (AJPES), there were 22 agricultural cooperatives active in southeastern Slovenia last year. They employed around 540 people, while generating EUR 134 million in revenue and a total loss of EUR 41,000.

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