Last Monday, Podravka hosted its Investor Day in Koprivnica, which included a tour of Belupo’s pharmaceutical factory and the presentation of FY 2024 and Q1 2025 results by the President of the Management Board, Ms. Martina Dalić, and Board Member, Mr. Davor Doko. Beyond the financials, the focus of the event was firmly on the future – specifically, the strategic impact of the newly established Podravka Agri. Therefore, we are bringing you an overview of how Podravka Agri is expected to enhance the Group’s operations.
While the news of Podravka acquiring Fortenova’s agricultural companies has been known for over a year, the EUR 333m transaction officially closed in January. The newly formed company, Podravka Agri, is now 84.99% owned by Podravka and 15.01% by the EBRD. Through this deal, Podravka has gained majority ownership of Belje plus d.o.o., Vupik plus d.o.o., PIK-Vinkovci d.o.o., Energija Gradec d.o.o., Belje Agro-Vet d.o.o., and Felix plus d.o.o.
This acquisition adds a third strategic pillar – Agri – alongside Podravka’s existing Food and Pharma segments. While these companies will remain legally separate, they will operate more cohesively under Podravka’s management. For example, where each company previously owned its own agricultural machinery like combines, Podravka aims to optimize equipment use across the entire Agri segment through shared resources.
The Podravka Agri companies collectively manage 37 farms covering 33,000 hectares, including 615 hectares of vineyards, accounting for 3% of Croatia’s total arable land. Moreover, Agri companies account for 50% of domestic pig production, 18% of domestic cattle production, 11% of domestic milk production, and 6% of domestic wine production. Processing capacities are also significant, with production plants for sausages, dairy products, and wine located in Beli Manastir, Osijek, Kamenac, and Vukovar.
The operational synergy comes from a vertically integrated model where roughly 80% of farming output is used internally to feed the livestock. The rest is sold to third parties or supplied to Podravka’s Food segment, continuing a relationship that predated the acquisition.
In 2025, Podravka plans to invest EUR 72m, with EUR 33m earmarked for Podravka Agri. The key focus areas include modernization of agricultural machinery, irrigation systems, and expansion of pig production capacities. The rationale behind pig production is simple – Croatia imports most of its pork, with significantly lower exports, and pricing is largely harmonized across the EU due to the commodity nature of livestock.
Increased crop output to support larger livestock operations is expected to be secured via irrigation upgrades, improved machinery, and expert-guided agronomic improvements. These steps are expected to ensure self-sufficiency in feed supply, at least in the medium term. After this phase, further land acquisition and consolidation in Slavonia are anticipated.
In summary, Podravka gains a new strategic pillar, but initial synergies may be limited. The Food segment will continue using Agri companies as suppliers, just one among many, as part of its broader sourcing strategy to ensure quality and pricing discipline through competition. Podravka Agri is expected to operate with EBITDA margins of 15-20% initially, with the potential to exceed 20% after the investment cycle matures. However, 2025 is expected to be a consolidation year, with short-term pressures such as foot-and-mouth disease and other consolidation efforts weighing on the segment’s performance.
