Published in Nacional number 477, 2005-01-04

Autor: Mislav Šimatović, Vladimir Huzjak


Ivica Todorić - from flower producer to Croatia's biggest businessman

Manager of the year for two year running speaks with Nacional about the beginnings of his business career

The re-selection of Ivica Todoric as manager of the year has confirmed the owner of Agrokor as Croatia’s biggest businessman. This has also been confirmed by the large number of points received by the panel of reporters – almost twice as many as second place Gordan Kovacevic.

He began his career in business in 1976 when, following his graduation from the Faculty of Economics in Zagreb, launched a private business dealing with the production and sale of flowers. In only a few years, he succeeded in expanding his business throughout the whole of Yugoslavia, and in the mid-1980s, Todoric’s company became a market leader. In 1989, he took advantage of the gradual liberalization approved by the state leadership at the time, lead by Ante Markovic, and he founded Agrokor as a stock company under his complete ownership.

This also began the success story which was not dampened even when he was frequently called a tycoon. He quickly purchased Jamnica, then Zvijezda and Ledo, and a series of companies for the processing of agricultural products, which alongside the Croatian retail chain Konzum form the backbone of the Agrokor Concern. In addition to being one of the wealthiest people and owner of the largest private company in Croatia, with revenues second only to the INA petrol company,Todoric is also the most dynamic businessman, whose acquisitions attract media attention year after year.

Following his takeover of the Serbian company Frikom last year, this year, Agrokor expanded onto the Hungarian market with the purchase of the Baldauf ice cream factory, and the Fonyodi mineral water bottling company. This was one of the main reasons for Todoric’s re-election as manager of the year.

NACIONAL: How do you explain the fact that journalists have proclaimed you Croatia’s Manager of the Year for the second year in a row? – Your panel of journalists for selection of Manager of the Year included distinguished journalists. I believe they made their decision based on business and financial analyses of the companies they assessed. Agrokor is the most successful company in Croatia, and one of the most successful in the region, and I believe that those criteria lead to their decision. Your colleages have recognized that Agrokor has developed its own vision of continued business success on a brutal market environment.

NACIONAL: What is the vision of Agrokor’s continued development? – Over the past years, Agrokor has proven its potential through its operations. In the future, we wish to retain the status of a regional player, and our aim is to become a successful international company. Agrokor’s vision is based on following global trends and the development of the world market and large companies. We ask ourselves how we can be competitive and how to win a portion of the market.
As we follow the trends of well known world companies, so that small companies have to turn towards us and follow us. If Agrokor, for example, wants to product a new brand of mineral water, the small company has to come forward with their offer to produce bottlecaps or bottle labels. Agrokor plans to invest more in the region in the future, as well as to take over a part of the responsibility of restructuring the domestic economy. We must not close our eyes to the opportunities offered to us for further development and inclusion in the European Union.

NACIONAL: Early last year, you announced that Agrokor would become the leading company in Croatia. Will you realize that by buying Belje or PIK Vrbovec? – In our case, it would not be logical to think in any other way. We want Agrokor to become the largest company in Croatia in terms of total turnover, profit and number of employees. It seems to me that it is only a question of time before Agrokor becomes just that.

NACIONAL: Experts are in agreement that politics can no longer influence Agrokor. However, they warn that this is a dangerous concentration of power which, if the need arises, could jeopardize any ruling structure in the country. Are you really that powerful? – Our intention to by PIK Vrbovec and Belje primarily means that Agrokor will take the responsibility for those companies upon itself. To takeover those companies, which generate massive losses, is a great risk for me, not power. The fact is that the state has done too little to support businesses, and the government should accept us as a company which makes a significant contribution to the Croatian economy. If we received something from the state, we returned it all on time. I have to note that never, from 1990 to today, has a premier or Economy Minister, ever officially visited our company.

NACIONAL: Do you have any political aspirations? – No. To date, I have had no political aspirations, nor have I given that any thought. I have always wanted to help my friends or the city I live in, and I am aware Agrokor, through its operations, is contributing to the development of Croatia. Agrokor and the people running it have been well received in the world, and through its presentation, Agrokor is helping the Croatian economy to strengthen.

NACIONAL: With the purchase of the Baldauf ice cream factory and the Fonyodi mineral water bottling company in Hungary, you have taken the first significant step outside the boundaries of the former Yugoslavia. Is it your ambition to become the strongest company in southeast Europe? – By opening and acquiring companies in Hungary and Slovenia, we have access to the EU market. As I said before, we are following business trends of global companies, and seeking our own position on the market alongside them. Of course, I expect that we will become the largest company in the region, for the Agrokor business is developing logically. In beating out the competition, Ledo has become the leader on the domestic ice cream market, and the company has proven itself in Bosnia Herzegovina, Serbia and Montenegro and Slovenia. Today in Hungary and through Hungary into the EU.

NACIONAL: You announced that you achieved a significant growth in revenues this year. Can Agrokor continue to grow in the coming years at the same tempo? – This year’s growth in Agrokor will be 17% more than last year. For us, that is large growth and in figures amounts to about 2 billion kuna. For the sake of comparison, the increase of our business this year totaled the same as the total value of medium or large companies in Croatia. It is logical that, as the largest company in the region, we have the greatest opportunities open to us.

NACIONAL: What do you consider to be your key business decision over the past ten years? Was that the decision to, contrary to the suggestions by the European Bank for Reconstruction and Development, to hold on to Konzum? – The key business decision by Agrokor throughout our operations over these past years was to take risks and not get involved in politics. That is how we bought the salt-mine in Zadar when it was bankrupt, followed by Jamnica, Zvijezda and Ledo. Many said that this was not a smart move, but we took a risk and succeeded. All that we’ve done has been in line with the laws and valid market practices, and we did not make an offer on any company that was not offered in a public bid. Agrokor has always had, as it has today, all the necessary sources of funding and a transparent business policy.

NACIONAL: Are you satisfied with your participation in the RTL consortium. There have been specularions that Agrokor, dissatisfied with the relations with the majority owners of RTL, wants to sell its share in the consortium. On the other hand, that would suit RTL, which intends to take full control over the television station. – We invested serious money in RTL and today own 25%+1share, as we wanted to participate in the strategic decision-making process. However, the fact of the matter is that we have still not returned our money and there will certainly not be a return for some time. However, I am satisfied that we invested in this TV station, as RTL is a global company that we have also benefited from, in observing their business philosophy and their attitude towards partners and clients. However, I believe that RTL does not yet fully comprehend the Croatian market. RTL in Hungary, while RTL in Croatia is something else. There are 10 million people in Hungary, and only half that amount in Croatia. In Hungary, an all-sports channel can exist and do well, as there are enough viewers. That is simply not possible here. The problem is that RTL copied their entire business model from Hungary into Croatia, thereby cutting revenues in half.

NACIONAL: Are you still interested in taking over Podravka? – Agrokor has no interest as an owner or shareholder in Podravka. We want that company to remain, as they have been to date, our business partner.

NACIONAL: Is Agrokor secretly behind the propose ban on working Sundays? – That wouldn’t be logical, because Agorkor has the largest number of stores in Croatia. The ban on working on Sundays was a big blow to Konzum. It’s not the same for a company if you close 10 or 15 stores, or if you close 200. however, we at Agrokor are aware of the position of the workers, we are socially conscious and we know that accepting this initiative would be a great contribution to the workers, which is why we have quietly supported this initiative. However, the fact is that capitalism is cruel, and at this time, continue to work Sundays would suit us best.

NACIONAL: How did you begin your business career? – My grandfather had some land ion Zagreb, and once I graduated, I thought about what to do with it. First I built a house which I later sold, then I took a small loan, and borrowed a little more money from a friend. I took that money and started my own flower growing and sales company. With our operations, we soon grew into the largest flower producer and seller in the former Yugoslavia. When the war started in Croatia, we had 1000 employees.

NACIONAL: You are a passionate hunter. What benefits has hunting brought to your business? – It is true that I hunt, but I also breed game. I was aware that if I wanted to give my contribution to hunting in Croatia, I would have to invest my capital. We have exceptional conditions for hunting, due to the great quality of our game, and this is one of our great sources of potential. It would be a shame to ignore this segment of our economy and not invest in it. That said, the International Hunting Federation has proclaimed our hunting grounds to be the best in the world.

NACIONAL: How is Agrokor preparing to enter into the European Union?
– Agrokor has been thinking about and preparing for the free market in Europe for the last decade. We are aware that entering into the EU will mean a completely new situation for us. Agrokor will have to define its task and the place it wants to have on the market, its expansion plan and the brands it will likely have to eliminate. We will remain on the ice cream, frozen food, oil, margarine, mineral water and other markets. However, we also have small volume products like salad or Juicy juices. For the time being, those products cannot be competitive: we will either have to eliminate them or change them. Likewise, we have purchased certain brands in order to develop them for new markets.

NACIONAL: Are you satisfied with the recently signed Protocol 7? – I think that we are overoccupied with our EU negotiations. I am sure that our negotiators will achieve the best possible result. We have the experience of the negotiations of the 10 countries we can look up to. Likewise, it is important to be informed about the significance of what has been signed.

NACIONAL: Do you intend to hand over the operative leadership of the company to someone else in the near future? – One of the reasons for the successful development of Agrokor is the success of the management that we have invested tens of millions of euros into over the past years. Agrokor has exception potential, which has primarily been formed over the past five years. Among those young people, we see the future leaders of Agrokor.

NACIONAL: Are you preparing your sons to lead Agrokor? – I am preparing my children for the business they will inherit. They are already involved in the Agrokor operations. I am satisfied with their progress, but they will sit in my chair only when they are ready for that.

NACIONAL: What about the Kulmer manor you are currently renovating in Šestine? – The manor should be finished sometime in late 2005. The entire investment is worth about 2.7 million euro. We are very proud to have taken this on. Cultural heritage experts, who have been monitoring our work since the very beginning, are satisfied with what we’ve done to date.

NACIONAL: Will the manor become the new residence for the Todorić family? – That was not our intention in the beginning, but with time, we have decided that we will move there.

NACIONAL: And finally, how satisfied are you with the work of Ivo Sanader’s government? – Croatia has taken many successful steps, even though we are still far from what we wanted or expected. If we properly reconstruct the Croatian economy prior to our EU accession, then we will have accomplished much, and this will be the result of all the governments to date, as well as all of us. In the past year, this government has also given its significant contribution with its efforts, and that is why this premier and this government can be trusted.

Born in 1951

1976 – launches private production and trade of flowers, in the 1980s expands to import and export of grains, oil, fruit and vegetables
1989 – registers Agrokor as a stock company under his 100% ownership
1992 – becomes majority shareholder of Jamnica and Agroprerada
1993 – one of the founders and first president of the Croatian Employer’s Association
1993 – becomes majority shareholder of Zvijezda
1994 – buys ownership share in Ledo and Konzum
1995 – Agrokor officially becomes a concern
1998 – buys Jaska vino d.d. and begins production under the label Podrum Mladina
2000 – takes over Kiseljak from Sarajevo
2003 – Agrokor buys the Serbian company Frikom
2004 – buys ice cream factory Baldauf and Fonyodi mineral water bottling company in Hungary and Agrolaguna

Related articles

IVICA TODORIC It is certain that Agrokor has the potential to become a very significant player on the Croatian energy market in a very short time

Todoric to enter the energy market

Agrokor, Croatia's largest company in the retail and food industries is soon to enter onto the energy market. Just last month, the company… Više