A tumultuous past has left many scars on the Zabok Regeneracija, yet it has managed to survive, which many Croatian companies have not. More precisely, Regeneracija became Rgnc grupa last year, which comprises the companies Regalerija carpets and tapestries and Regeneracija non-wovens. This followed a decision three years ago to separate the three core activities into distinct companies: Regalerija manually produces wool carpets and textile installations, Regeneracija non-wovens collects and recycles textile waste and produces various insulation and protective materials from recycled textiles, while Rgnc grupa focuses on repurposing its real estate.
The design phase of the Rega center is nearing completion, which, according to Anđelko Švaljek, director of Rgnc grupa, will offer the best retail, office, educational, entertainment, and hospitality spaces along the highway from Zagreb to Maribor. Švaljek has been the director at Regeneracija, now Rgnc grupa, for nearly twenty-five years and believes he can identify key threats and opportunities for the company. He believes that through business restructuring, he has protected it from a negative scenario where real estate appetites stifle production or where production, due to inefficiency and lack of ambition, destroys the potential of spaces, real estate, and market opportunities. Regeneracija was founded in 1954 as a sorting facility for textile waste from the nearby wool weaving factory of the Zagorje Woolen Fabrics Industry (ZIVT), has been manually producing wool carpets since 1967, and has been producing non-woven textiles since 1968.
The Importance of Privatization
After the transformation, it became a joint-stock company in majority state ownership, but in 2005, ownership shifted to management, employees, and the German company Kirchner GmbH. Regalerija today produces about 5,000 square meters of carpets and tapestries annually, and Švaljek believes it could produce more. It exports about 30 percent of its products to the European Union, the United States, and Asia, while Regeneracija non-wovens places 95 percent of its products on foreign markets, primarily in Germany, Austria, Italy, and Hungary. Production occupies about 8,000 square meters of the company, while other commercial activities cover about 20,000 square meters.
– The ownership structure of Rgnc grupa is determined by a 70-year history, transformation, privatization, and the reformation of a joint-stock company into a limited liability company, and it will continue to change. It was extremely important that in 2005 we purchased the majority of the state-owned share packages and began operating as a private company. I am confident that ownership shares will consolidate very quickly. It is important that our manufacturing companies have a simple ownership structure and are wholly owned by Rgnc grupa, which constitutes more than 50 percent of private capital, of which 30 percent is foreign (the owners secured 80 percent of the funds, with the remainder from a commercial bank). Alongside me in the company is my wife Natalija, who manages human resources, and we, as is common in companies of this type and history, live from, with, and for the company. I do not consider surviving larger, more well-known, and successful companies a special achievement, as we have all missed many opportunities and caused significant damage over the thirty years of democracy, liberalization, and open markets – assesses Švaljek. Furthermore, he believes that the current inflation will persist, and the war in the Middle East is drastically increasing transportation costs from China, which is Regalerija’s biggest competitor in Europe. This means greater demand that he can hardly meet, with every increase in input costs being a challenge as he cannot adjust sales prices and pass the cost onto the customer. Therefore, Švaljek wants to expand Regalerija’s offerings and provide additional post-sale services such as maintenance, cleaning, replacement, and disposal.
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