Pipunić: We will double our capacities in what we do well

The Croatian capital market is experiencing a sort of renaissance this year, and alongside a significant increase in trading securities, this is also evident in the number of initial public offerings (IPOs). This year, two IPOs took place, with the one from the Osijek company Žito being recorded as the largest in Croatian stock market history. This agricultural-food company raised 130 million euros from small and large investors by selling 6.4 million shares at 20.30 euros each. In addition to 20 large institutional investors, 4,400 citizens purchased shares, including 300 employees of the company itself.

During the IPO, Žito emphasized that their long-term goal is to consistently pay dividends, directing between 30 and 50 percent of annual profits towards strengthening their market position. This position is already quite strong in certain segments of agricultural production. Specifically, the Žito group is involved in numerous activities, employs 1,600 people, collaborates with 3,000 cooperators, and cultivates nearly 78,000 hectares of land together with them. – We have a complete cycle, we are first in egg production, second in pigs, and third in milk. I neither can nor want to convince anyone to join the IPO – we invite people to be our partners in further expansion and development – said founder and CEO Marko Pipunić before the IPO.

Regarding Žito’s plans for this year and the next, Marko Pipunić will reveal them in a ‘1 on 1’ conversation with editor-in-chief Miodrag Šajatović at the traditional Lider conference Day of Great Plans, which will be held on September 24 in Zagreb. And there are plenty of plans, judging by previous announcements. Namely, the leaders of Žito stated after the IPO that the raised capital will be invested exclusively in Croatia, specifically Slavonia. Plans include the construction of new pig farming facilities, new farms, increasing Croatia’s self-sufficiency in pork production, building a new animal feed factory, expanding the capacities of the oil mill and prosciutto factory, and investing in renewable energy sources.

In the new ownership structure of Žito, institutional investors and other IPO participants hold a total of 25 percent plus one share of the company. How significant this event was for the company, and for him personally, Marko Pipunić revealed at the start of trading of the shares on the Zagreb Stock Exchange at the end of July. He stated that this is the second largest step in his business career, after the decision to leave a well-paid job 35 years ago and venture into entrepreneurship. – This is a much bigger challenge, but it is not an excursion into the unknown. I am convinced that this is the best decision for the future of Žito and its employees, as well as for all those who are directly interested in the company performing well – emphasized Pipunić.

In the last nine years, the Žito group has invested more than 200 million euros, and in the new cycle, it plans to invest an additional hundred million euros. Pipunić sees an opportunity in pig farming as we are deficient in this activity and can be competitive with European producers. – In pig farming, we have knowledge, good know-how. We are going to double the capacities of what we do well, increase the production of prosciutto because with the current 160,000 we have demand that exceeds what we can deliver by 20 to 30 percent. We have decided to increase the capacity by 50 percent. That is what we can do in the short term. Energy is interesting to everyone in the world today; we fear whether we will have electricity or not, and we are self-sufficient, producing as much as we consume – stated Pipunić in early June.

Croatian agriculture has been facing problems with declining productivity and competitiveness for years, resulting in increasing imports of food and agricultural products. However, companies like Žito prove that domestic agriculture can also be viewed differently, as an opportunity for good profit. This is also evidenced by the production figures of Žito. The company produces more than 300,000 tons of agricultural crops, grains, oilseeds, and industrial plants annually, purchasing agricultural crops from about 60,000 hectares of farmland owned by cooperators. Along with raising 6,700 sows and as many as 175,000 fatteners, and an additional 25,200 expected at the newly opened tenth farm, there are 5,000 fattening cattle annually, more than 20 million liters of milk from three farms, and 130 million eggs from two farms. The oil factory in Čepin, which Žito purchased when it was on the brink of bankruptcy, processes 150,000 tons of oilseeds annually and holds a 95 percent market share as the leader in oil processing in Croatia.

In the last 16 years, Lider’s Day of Great Plans has become a political-economic ‘must be’ event. It has gathered around 5,700 participants and 300 speakers from among industrial leaders, macroeconomic experts, high-ranking political officials, and influential public figures. This status will be confirmed again this year with its program and selection of speakers, primarily leaders from various industries in Croatia, world macroeconomists, representatives of the public sector, and state institutions, from whom we will learn firsthand what awaits us and how to adapt to the unfavorable circumstances that the environment continuously imposes.

Do not miss the opportunity to network with the most successful entrepreneurs; register in time to participate in the 17th Day of Great Plans taking place on September 24 at the Westin Hotel in Zagreb.