Home / Business and Politics / [Business Scene] Đuro Đaković Montaža has installed the nuclear power plant in Krško, ready for the second block

[Business Scene] Đuro Đaković Montaža has installed the nuclear power plant in Krško, ready for the second block

When we told friends outside of business circles that we were going to Slavonski Brod to do a story about 'Đuro Đaković', almost everyone asked: Does it still operate? With the negative public perception, shaped by the media image of Slavonia where everything is failing and people are mass emigrating, our interlocutors often encounter such views and no longer bother to explain that in Đuro’s complex today, not only the Đuro Đaković group, which is fighting for survival, operates, but also 90 mostly successful companies, about twenty of which bear the name Đuro Đaković, which achieved 2.4 billion kuna in revenue last year and employ 4,300 workers. The largest among them in terms of revenue and number of employees is Đuro Đaković Montaža.

– It is impossible to compare the then and now Đuro. Some segments have developed and moved on, some have disappeared, some are doing excellently, and only one is in trouble. An interesting indicator is that much more electricity is consumed now than when 16,000 people worked in this complex, even though today all devices consume four times less energy, which tells us that production is now more intensive. The name Đuro Đaković is a brand, recognizable all over the world, significantly more abroad than here because it is unfortunately presented in public as something negative – explains co-owner of Đuro Đaković Montaža, Drago Čugura, who recently moved from the position of CEO to the Supervisory Board.

The company is engaged in the assembly of steel structures and offers a range of services related to the production and assembly of steel structures, machinery, and pipelines in construction, reconstruction, modernization, repair, and maintenance projects of energy, petrochemical, and industrial plants, as well as bridges and steel structures.

It was founded in 1926 by assembling the first bridge on the Tisa River near Titel, after which an active period of bridge assemblies followed both domestically and abroad. Since 1947, it has operated within the company Đuro Đaković – Industry of locomotives, machines, and bridges. They have installed the nuclear power plant in Krško, the Neka thermal power plant in Iran, numerous facilities in Iraq, Libya, Germany, Belgium, Turkey, Greece, Indonesia, Sudan, Ethiopia, and many other countries.

During the second half of the 20th century, the company also installed the nuclear power plant in Krško, so the announcement of the construction of the second block was received with joy in Slavonski Brod. Of course, they hope for that job as well, and they will be ready when the tender is announced.

After bankruptcy and restructuring, Montaža was registered as a joint-stock company in 1991 and became part of the German company Bilfinger SE in 2009. On the ninetieth anniversary of its founding, in 2016, it exited the Bilfinger group and again became a company fully owned by Croatians.

We ask our interlocutor how the German owner decided to sell.

– There was no choice in the matter. Bilfinger was then a large company with over 550 companies. We were symbolic in the whole story, an integral part of the energy division that they decided to either sell or close. Since I was in constant contact with the owner, it was openly told to me that we should be closed because, among other things, we had too many people, there were more than a thousand of us. I could not allow us to disappear just like that; I believed in the company, I knew it had a chance and that it needed to be sold. Considering the options at the time, including closure, purchase by speculators, and hostile takeover, a management buyout seemed to us the only correct option in such circumstances  – responds Čugura.

In the segment of constructing thermal power plants of all types, Đuro Đaković Montaža is today among the top five companies in Europe. They are working on many projects – from waste incinerators to biomass and gas power plants to bridges and nuclear power plants: 90 projects in 17 countries. The market is mostly the European Union, and last year they also worked in Israel. The company currently has about 800 employees.

Like many other companies, ongoing operations are complicated by inflation, rising energy and raw material prices. They feel the war in Ukraine only indirectly as they do not operate in the markets of Ukraine and Russia. However, how would the shift away from coal as an energy source for thermal power plants and the current gas crisis affect the business in the long term?

– In the long term, there could be problems, but on the other hand, it is an opportunity for us because the shift away from coal has initiated the construction of a whole series of gas power plants. With several large European companies, we have been nominated as a partner for that segment, and it is developing very well – emphasizes our interlocutor.

Speaking about medium-term plans, Čugura emphasizes that the goals are to maintain a broad portfolio of jobs they are engaged in, which should not be a major problem as the workforce is mobile and well organized for managing jobs.

– In addition, we have 150 to 200  subcontractors that we can engage at any time as compensation if there is a market disruption. We have organized ourselves to manage all jobs from Croatia, so the location of the work execution does not play a significant role in terms of preparation and planning. We retain and attract workers with a relatively high average salary. There is a shortage of labor, and if we want to have quality workers, we must financially reward them accordingly. That is the market – says Čugura.

Are there any interested parties in purchasing Montaža, and would they perhaps buy someone, we ask at the end of the conversation.

– We often receive such messages, but at this moment we are not thinking about selling.  It is almost always a kind of 'market cleaning', and that would not be good for our company. On the other hand, we are not overly thinking about acquisitions either. There are few such companies in Europe. If we go for an acquisition, it is likely that it would be a company that produces its own products or services that we currently use in our projects – concludes Čugura.

► You can read the complete report on the business scene of Brod-Posavina County in the digital and printed edition of Lider.

Tomorrow: Where the Đuro Đaković group sees the last chance for recovery.