After Going Public, Saponia Launches a New Cycle of Investment and Innovation

Excluding the food industry, there are not many producers of consumer goods in Croatia that navigate the market’s challenges as successfully as Osijek’s Saponia. Its competitors are leading foreign companies with their globally recognized brands, the size of the domestic market has been devastated by negative demographic trends, the average growth in purchasing power of the employed part of the population has been nullified by a larger share of retirees in the population (as pensions do not grow at the same rate as salaries, and older people, whether we admit it or not, spend much less on cleanliness than the young) and a declining natural increase, and it is well known that detergent consumption in society is directly correlated with the number of small children.

In short, the Croatian market for detergents and laundry products, which is Saponia’s core business, has seen a stagnation trend in sales volumes in this category for several years. Quantitative sales are stagnating or growing minimally, but value is significantly increasing, primarily due to price increases and a shift to more expensive product formats. However, from Saponia itself, in response to inquiries about the volume movement of its sales, we received the answer that ‘in the last five years, there has been a continuous growth in sales volume, driven by an efficient organization of production in four factories, including its own plastic packaging facility.’

Gender (in)Equality

While we did not receive precise information on volume growth, previous financial reports clearly show that the value growth of the company’s sales has been on a significant rise both in the domestic market and in exports in recent years. Saponia ended the last year with total revenue of 133 million euros, which is 23 percent higher than in 2023 and even 85 percent higher than five years ago. Two key concepts that contributed the most to this are: innovations and bold pricing. Third, but not least, is the ownership and management structure focused on increasing productivity, revenue, and profitability. In 2020, the revenue per employee in Saponia was 98,133 euros, and by 2024, it had nearly doubled to 183,340 euros.

The majority ownership stake in Saponia was acquired for 20 million then-German marks in 1998 by Mepas from Široki Brijeg. After the death of the founder Mirko Grbešić in 2022, the company was continued to be led by his eldest son Ivan Grbešić, who shortly thereafter also took over the position of CEO of Saponia. From the acquisition until his death, Mirko Grbešić maintained a single-member management board in Saponia, the company was managed for nine years by Damir Skender, and for the next four years by Dajana Mrčela.

Ivan Grbešić broke this tradition and formed a five-member management board, which included two more family members, his younger brother Filip (as procurator) and Marko Mikulić, the husband of one of the three sisters. Along with them, two seasoned managers who were not previously connected to the Grbešićs joined the board: Davor Bošnjaković, who left the management of Kraš for Saponia, and Hrvoje Bujan, who was previously the director of Franck Snogoo.

The fact that the Saponia management currently consists exclusively of men (and of the three members of the Supervisory Board, only one is a woman) prompted us to ask the company how it intends to achieve the proclaimed goal from the Sustainability Strategy 2024 – 2029 for achieving gender equality, which implies maintaining at least 50 percent women in operational management and at least 60 percent women at all management levels. We were informed that ‘women already make up 53 percent of senior operational management, which confirms that gender balance at the highest levels has already been achieved. The focus remains on maintaining balance and promoting equal opportunities within the framework of education, mentoring, and professional development programs for employees.’

Open Hands for Squeeze-Out

In July of this year, Saponia withdrew its shares from the Zagreb Stock Exchange. The process was initiated by its majority owner, Mepas, which cited high administrative and financial requirements for listing on the stock exchange and low liquidity of the shares as the main reasons for delisting. Minority shareholders who voted against Mepas’s proposal to withdraw from the stock exchange at the general assembly were offered compensation of 87.45 euros per share by Saponia.

A comparison of the ownership structure before and after delisting reveals that Mepas retained an 87.3 percent ownership stake, that pension funds PBZ CO (which previously held 4.7 percent of the shares) and many small shareholders exited ownership, and that the share of Saponia’s treasury shares increased from 0.48 percent to 9.01 percent.

In other words, Mepas now controls 96.31 percent of the ownership stake and has open hands to, when the Grbešićs deem it sensible, enter the process of squeezing out minority shareholders, as they have already done in Bjelovar’s Koestlin and Split’s Brodomerkur before selling it this year to entrepreneur Trpimir Botica.

In Croatia, Mepas also acquired Osijek’s Kandit in 2014, which was immediately transferred to Saponia’s ownership in a 100 percent stake. The sales and distribution of Koestlin’s and Kandit’s products in the domestic and foreign markets were also transferred to Saponia, which accounted for 39 percent of Saponia’s sales revenue structure last year. While it may initially seem that Saponia benefits financially from such synergy with owner-related companies, the beginning of this year suggests that it may also bring some troubles, such as causing a decline in revenue.

Raw Material Prices Rise

From the last financial report before Saponia’s delisting from the stock exchange, which pertains to the first quarter of this year, we learn that this year began for the company with a sales revenue decline of a significant six percent compared to the first quarter of last year. This decline was primarily caused by a drop in sales revenue from Koestlin’s brands (17 percent) and Kandit (12 percent), while revenue from Saponia’s own brands decreased by only one percent. What happened afterward, how Saponia performed in the first nine months of this year, we only know as much as the company wanted to tell us:

– During the first nine months of 2025, Saponia d.d. achieved stable business results and maintained key market positions in most categories in which it operates. In the powdered detergent segment, Faks confirmed its leading position with a 26.4 percent volume market share despite a continuous decline in the volume of the entire category in the Croatian market. This result attests to the strength of the brand and high consumer loyalty. Besides in the powdered detergent segment, Saponia records stable shares in other categories of the laundry segment, as well as in more than 15 product categories, from cleaning and hygiene products to toilet and cosmetic products, including soaps and toothpaste.

Last year, the company achieved a net profit of nearly 4.5 million euros, which was about one and a half million euros more than in the previous two years, but also half of what it was in 2020. As in previous years, the profit was also strongly influenced last year by the rise in personnel costs, which, with almost unchanged employee numbers (725 at the end of last year), rose from 10.4 million euros to 15 million euros from 2022 to 2024. On the other hand, a slight relaxation in terms of profitability last year was brought to the company by a decrease in raw material and material costs, which amounted to 45 million euros, about 2.15 million euros less than in 2023. Unfortunately, the positive trends in raw material price reductions recorded in 2024 did not continue.

As they say in Saponia, during this year, raw material prices have risen again, primarily the prices of raw materials covered by the EUDR regulation (such as derivatives of palm oil and fatty acids in coconut). Additional increases were recorded in ethoxylated alcohols, caustic soda, as well as fragrant components and essential oils, with patchouli oil reaching a record price on the world market.

However, the greatest pressure on profitability in Saponia has been capital investments for years, the amounts of which vary from year to year, but are generally between five and six million euros per year. The company’s market strength is reflected in its brands (Faks helizim, Nila, Rubel, Bioaktiv, Plavi Radion, Likvi, Tipso, Arf, Vim, Bis, Lahor, Frutella, Kalodont), and their continuous development is the result of ongoing investment and innovation activities. Without this, Saponia would not be able to position itself price-wise alongside international brands, which it boldly does despite the fact that private label brands, and in recent years the Bosnian Violeta, increasingly compete with lower prices.

Significant Investments

All of Saponia’s products are created in its own laboratories and are the result of knowledge, innovation, monitoring scientific achievements, and applying modern technology. And that comes at a cost. Last year, Saponia invested 5.8 million euros to improve the performance of its existing brand portfolio and introduce new products. One of the priorities last year was to enter the market with an innovative formula (washing efficiency at low temperatures and a range of other features) accompanied by a new, more modern visual identity for the Nila brand.

A significant step was also made in the toilet and cosmetic products segment by producing new Lahor soaps enriched with shea butter. Two new scented fabric softeners under the Ornel brand were launched, followed by a line of capsules for machine dishwashing Likvi (by the way, the machine dishwashing category is the fastest-growing category in the household hygiene products segment, so entering it is extremely important for the company) and the first five-chamber capsules under the Faks brand for laundry, which is another market innovation. And so on.

Focus on Technological Development

A series of innovative projects continued this year as well. Among them, Faks Stain Removal & Hygiene stands out, which Saponia says is strategically important for them as it further strengthens Faks’s leading position in the laundry category. The new generation of products brings an improved formulation focused on more effective stain and hygiene impurity removal, along with a modernized olfactory profile and packaging redesign in line with current visual trends. The company has also directed its business focus towards the development of liquid detergents in the heavy-duty and light-duty segments, in which the Nila line is experiencing growth and occupies almost 30 percent of the Croatian market in that category.

– This year, Saponia has successfully responded to the challenges of rising raw material prices by ensuring the stability of sales prices and maintaining product quality, while continuously considering the needs and expectations of end consumers. Preparations for further innovations and improvements in several categories are underway, with a focus on technological development, sustainability, and even stronger communication with the market and consumers – the company states.

According to NielsenIQ data for last year, Saponia is one of three players that together account for 65 percent of the volume sales of laundry detergents in the Croatian market. The other two are Henkel and private label brands, but NielsenIQ has not publicly disclosed specific market shares in this category. From some other semi-official sources, we know that Henkel with its brands is number 1, but not how much stronger it is than Saponia. There is even less information about shares in other markets in the region, which are also Saponia’s most important export markets.

Overall, Saponia achieved 60.4 million euros in sales revenue from exports last year, of which 40.4 million was from the sale of its own brands. The remaining 20 million euros from exports came from the sale of Kandit’s and Koestlin’s products. While its sales realization in the Croatian market increased by 4.3 percent last year, the export growth was a staggering 58 percent. Thus, the share of exports in its total revenue reached 45.5 percent last year.

More than a third of foreign revenue was generated in the market of Bosnia and Herzegovina, which is quite logical considering that Mepas is one of the largest distributors of consumer goods in Bosnia and Herzegovina. The second largest foreign market for Saponia is Serbia, to which its exports amounted to 10.3 million euros; followed by Slovenia, North Macedonia, Montenegro, and Kosovo, where Saponia exported goods worth between 5.2 million and 6.1 million euros.

Give the Market What It Wants

Saponia began producing compact laundry detergents back in 2007, which was a significant step in the development of its product portfolio, aligned with European trends and environmental commitments. Compact detergents use less packaging material, take up less space during transport and storage, thereby reducing CO2 emissions during transport. For all of Europe, including Croatia, compacting is already very old news, but the countries in the region, to which Saponia exports the most, are still not giving in. This prevents the company from completely abandoning the old model of producing powdered detergents. Simply put, customers in Serbia, Montenegro, North Macedonia, Kosovo, and Albania still prefer to buy three times larger bags of detergents instead of smaller compacted ones.

For this reason, Saponia expects a complete transition to compact formulas only in the coming years. In the meantime, it is forced to actively conduct educational activities in the mentioned markets to explain the ecological and economic advantages of compact formulas to consumers and gradually introduce such products to those markets. However, while in Serbia, the three largest competitors of Saponia have already switched exclusively to compact formulas, Saponia currently has an advantage precisely because it can still offer customers what they want – non-compacted powdered detergents.