Mario Njavro

Agrokor Case: The Recent Past and The Uncertain Future of The Big Agribusiness Conglomerate In Croatia

The leading agribusiness group Agrokor is one of the biggest in Croatia today with respect to number of integrated companies, employees, and revenues. Its constant growth was based on acquisitions and mainly financed through borrowing. Although questions about Agrokor indebtedness were raised occasionally, the first time the problem was taken seriously was in 2017. Hence, the special national law was adopted according to which Extraordinary Administration and government commissioners were appointed with the role to maintain day-to-day activities, and conduct settlement procedure and restructuring. The objective of this paper is to determine the nature of unfocused growth of Agrokor and its consequences on the business results. For that purpose, financial analysis of main Agrokor member companies was performed. The results reveal decrement in revenues, and increment in costs for the period 2012-2016, which caused lowering of profitability and rise of indebtedness. Altman Z-score showed that all companies are one step to bankruptcy. Furthermore, the main idea is to determine supply chain models through which the company is embedded in the national agribusiness.

Economic results of Croatian farms

The objective of the paper is to provide an overview of the situation and performance of Croatian farms. Croatian farmers rarely keep business books and therefore farm level business data are deficient. Croatian accession to the European Union in 2013 brought numerous innovations to agricultural sector. One is introduction of Farm Accountancy Data Network (FADN) which aims to determine the impact of the Common Agricultural Policy on national agriculture of EU member states. The sample of Croatian FADN comprises 1,250 commercial farms. The paper brings results of agricultural sector financial analysis for the period 2011-2013. Total farm output decreased, but since the stronger decrease trend occurred in total inputs, this led to positive trend of gross and net farm income in the year 2013. Positive results are also shown at efficiency and productivity of Croatian farms. In the years 2011 and 2012 farms operated below the efficiency level while in 2013 efficiency increased above the efficiency level. In the observed period there was a 70% increase in productivity. The analysis shows that the most efficient farms are those in vegetables and flowers type. It also has the highest debt ratio due to their capital intensiveness. The vegetable and floriculture farms have the largest gross farm income in all three analysed years, but with a large drop in 2013, while the farms in type pigs and poultry have largest increase of gross farm income in last observed year.