Germans Withdraw: Meggle Shuts Down Production in Croatia, 160 People Laid Off

The Meggle Group, based in Germany, is undergoing a process of optimizing its entire business with the aim of establishing long-term sustainable business models in all markets. Accordingly, a decision has been made to restructure operations in Croatia and to shut down production in Osijek by the end of the year. Meggle will operate in the Croatian market through a new business model starting January 1, 2021, according to the statement. 

The decision to restructure operations in Croatia and to shut down production in Osijek was made due to long-standing business challenges and a series of crises that negatively impacted operations, from the aflatoxin crisis, through the Agrokor crisis to the latest coronavirus crisis.

In the process of restructuring and closing production, approximately 160 employment contracts will be terminated for employees whose jobs are being eliminated. Meggle, as an employer in the restructuring process, will act responsibly and socially sensitively, ensuring quality severance packages and conditions for the termination of employment contracts along with social dialogue with employees and all relevant bodies.

The decision to shut down production has been postponed several times over the past few years in the hope that business conditions and circumstances would improve, and it was finally made only after all other options were definitively explored. Over the last 15 years, the Meggle Group has invested more than 130 million kuna in production and operations in Croatia. In accordance with the decision to shut down production, Meggle will terminate collaborations with its cooperatives and raw material suppliers.

Meggle will fulfill all its contractual obligations to them in a timely and complete manner, as it has done so far. In the Croatian market, the demand for raw milk is chronically higher than the supply, and Meggle will assist its reliable suppliers, including 200 small rural households, in quickly finding new buyers or purchasers. 

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