Bojan Varjačić: We Invest in Combined Transport and Cargo Center

On the day Croatia joins the EU, the Varjačić family will no longer be able to do what they have successfully done for years. The absence of a border will be a direct blow to their business. However, they are not waiting with crossed arms for that moment to arrive.

writes Tatjana Brebrić
[email protected]

Most entrepreneurs never find themselves in a situation where the business they are engaged in has a specific expiration date after which they will no longer be able to operate. Nevertheless, although such a situation is rare, it does happen. The entrepreneurial family Varjačić has found themselves in such circumstances, as they deal with customs clearance and the import and export of goods. On the day Croatia enters the EU, they will no longer be able to do what they have successfully done for years. The absence of a border will be a direct blow to their business, not a relief as it will be for most entrepreneurs. One might think that this will be a significant problem for the Varjačić family, but only someone who has never worked with them could think that. Those who know them will rightly assume that they will not wait with crossed arms to see what will happen. Bojan Varjačić, director of Krapina Šped, explains what new projects they have invested in due to the changes that await them.
– We are the owners of the national company Crokombi in Zagreb, which employs two people and specializes in combined transport of all types of goods, mostly containers by rail and road. In addition, we are engaged in organizing the transport of trucks on trains, which on some routes travel without having enough permits. We have invested part of our capital here and expect expansion from that company – says Varjačić, adding that the family has also invested in shares in an insurance company.

In the development phase
However, the largest project and the biggest investment is the Cargo Center Zagreb, established a month ago, in which they are among the shareholders and founders.
– The project holders are Luka Rijeka, HŽ Cargo, and Cargo Center Graz, and of course, we as freight forwarders, along with other investors. Currently, it is one of the largest projects in the region that is in the development phase and relates to our activity – explains Varjačić, adding that the main activity of the Cargo Center will be organizing the transport of all existing types, warehousing of goods, handling of goods, and logistics services, in which the Varjačić family has extensive experience.
The company Krapina Šped was founded in 1993, but Bojan’s father, Branko Varjačić, established it after already working in transport for 21 years. Since 1972, when he opened a craft that later transformed into what is now the Varjačić company, Branko has been very successful in what he does. Today, his son Robert runs the company, but all three companies (because in addition to Varjačić and Krapina Šped, there is also Promet Varjačić) are actually part of one successful family-business story. Krapina Šped’s main activity is the preparation of customs documents, import, export, and transit of goods, as well as logistics services – specifically, mediation in transport and organization of transport and warehousing.

– We have branches at the Macelj border crossing, which is one of the main border crossings in the country, and at the Lupinjak crossing towards Celje, territorially close to our headquarters. In addition, we have a branch at the Krapina customs office, an accounting and bookkeeping branch in Krapina, and a branch at Jankomir in the Commodity Terminals. From Jankomir, we cover the entire area of Zagreb, and we have five employees there. At Macelj, there are 12 employees, at Lupinjak four, and another five in Krapina – explains Bojan Varjačić. The other company, which bears the family surname, Varjačić d.o.o., is also owned by the family and is related to freight forwarding. It emerged from Branko Varjačić’s craft and gradually developed, growing truck by truck. Today, it has more than 20 employees and owns 15 trucks, the largest that can be found in such a business, and several delivery vehicles. Through the company, more than 100 cooperators work, which means additional trucks, but not an additional 100 trucks, rather an additional 10 to 15 trucks for each cooperator, which ultimately creates an impressive network.
– The company operates at full capacity, there is no crisis; perhaps the reason for this is that a company that was never healthy competition for any carrier, Pevec, has disappeared from our area. All carriers breathed a sigh of relief, and probably that is why we have not felt the crisis and are operating at full capacity – says Varjačić, adding that freight forwarding and customs clearance have recorded a decline of about 20 percent.

Difficult decisions
However, Krapina Šped, despite this decline, does not have the problems that have plagued a large number of entrepreneurs in the last two years. Five years ago, they discarded 30 percent of problematic clients. It was a difficult decision, and for a while afterward, it was not easy for them because they consciously gave up a large part of the business, but the final result is entirely profitable. They gained in quality, and that is why today they cooperate with quality clients who more or less pay on time, despite the economic crisis. This kind of thoughtful caution is also the reason why, despite a well-established company, they did not pursue further expansion of customs transport.
– We cover the entire Krapina-Zagorje County and the Zagreb ring. We did not pursue further expansions partly because there is plenty of work here, and partly because it is not a simple job. Large guarantees are required for every good we clear. We guarantee, and if the person who brought the goods for customs clearance does not pay the customs duty, that amount is automatically deducted from our account within 10 days, and we then have to seek recourse from the person who came to customs – explains Varjačić, adding that because of this, they must be very involved in everything that happens, which is difficult when the business is dislocated. That it is indeed about enormous amounts is best evidenced by the data, as the guarantee must be proportional to the turnover. Thus, Krapina Šped has 3.5 million kuna in guarantees for internal customs clearances, and at border crossings for normal goods, the guarantee amounts to more than 23 million kuna, as well as another two million kuna for sensitive items. In total, it is as much as 28.5 million kuna.

Real estate business
– We have received some exemptions from those guarantees and discounts, but for internal customs clearances, we had to provide real estate as collateral worth at least twice that amount. Guarantees at the border are enormously high; we have worked on a report proving solvent business from 1993 to today, and the material assets of the company in case of collection to ensure we are solvent and can pay, but that certainly cannot be that enormous amount all at once. Not many companies in Croatia have received that, and it was not simple – explains Varjačić.

However, this story about the business of him and his family does not end here. Namely, in addition to their core activity, a significant part of the revenue of the Varjačić company is also owed to a completely different business – namely, for the past five years, they have been engaged in real estate. They are involved in the construction and sale of apartments in Novalja on the island of Pag.
– We do not offer just a few apartments a year but 40 to 50. Last year we sold them all, and this year sales are somewhat down, but still satisfactory, and we have sold 25 apartments. These businesses have a long-term perspective, and we have bought a lot of land down there and have become the largest investors – explains Bojan Varjačić, adding that they have managed to make a significant business in real estate, but they still do not neglect their core activity – transport. This is evidenced by the fact that they also have a third company, Promet Varjačić, specialized in organizing oversized transport, their escorts, and obtaining permits.