Balkan pot on low heat - How Miodrag Kostic "reheats" story about cooperation with Ivica Todoric

The richest man in the Balkans, according to Forbes, has returned to the spotlight lately. Aside from a well-known story about (im)possible acquisition of Mercator, the owner of Agrokor is again being brought in connection with the "Serbian sugar king".

Is Ivica Todoric going to join forces with Miodrag Kostic to form a regional food giant? The idea about cooperation between Serbian and Croatian companies about which eKapija wrote a long time ago has recently been "reheated" by the owner of MK Group.

Speaking about necessary cooperation between companies in the region at the Novi Sad Agriculture Fair, Kostic shared his view on AMNAP, a joint venture that would be made up of five regional leaders - Agrokor, MK Group, Atlantic Group, Nectar, and Podravka.

As Kostic claims, that joint venture, which would have a revenue of about EUR 7 billion and a single management team, would attract an unprecedented interest. It "would not be a sum of simple figures, but their multiplicator," and it would allow these companies to have a strong performance in the global market instead of just "watching the game."

(Ivica Todoric, the owner of Agrokor and the richest man in the Balkans, according to the Forbes list)

Economists too are of the opinion that a merger of these regional leaders would benefit not only them, but also citizens and the broader community. An associate at the Institute of Market Research (IZIT), Sasa Djogovic, says to eKapija that he is "always in favor of regional cooperation."

- We should not trip each other up, but strive for synergy. The merger would help increase profit and reduce tension throughout the region, and I believe it would also be useful for the entire community in terms of both quantity and quality of the offer. These companies would also be able to operate together in third markets. For example, Croatia's admission to the European Union could also open the door to our businessmen. A merger of Agrokor, MK, Atlantic, Nectar and Podravka is a business solution that would, in my opinion, be a step in a good direction.

Why not

The idea about the merger of five regional companies, although still hypothetical, has attracted mainly positive reactions across the region. People at Agrokor said right away that that was "an excellent strategic thinking," adding that they would support every initiative in that direction.

(Miodrag Kostic, the owner of MK Group and the third richest man in the region, according to the Forbes list)

- That is something that Agrokor has always talked about, although not for aforementioned companies in particular. This is the only correct path of development for regional companies and the right way to compete with multinational companies - people at Agrokor told the daily Blic.

A positive comment has also been given by Atlantic Group.

- We are always open to talks about every initiative. However, when it comes to the growth and development of operations, we do not classify companies by their geographical location, but primarily by their vision of business logics and our mutual interest - Blic writes.

However, despite positive comments, the question that was asked a while ago is still open - Are regional "kings" of sugar, juices and coffee ready to give up on their "batons", that is, majority ownership?

Some people believe that the fact that Kostic again expressed a wish for regional merger represents a step forward in that regard.

Cooking on low heat

And although it's been several weeks since the first new announcement was made, the story about joint "Balkan pot" keeps on steaming. The freshest "positive provocation" came few days ago from the kitchen of Miodrag Kostic, who once again explained why the establishment of a large regional company could be a good move in case of, for example, new economic crisis.

- Even if a Croatian company decides to close its production facility in Serbia, or vice versa, money will stay in the region in a way. In that case, large companies from the USA or China would first lay off workers and close or withdraw resources from their affiliates in our region and then do the same thing in their home countries - said Kostic.

There is already some cooperation between these countries, and the time will show what will happen next, says Djogovic.

- If businessmen come to a conclusion that mergers bring them profit, they will pick that option. The answer exclusively lies in the owners' hands - he notes.

The potential for regional mergers also exists in the military and construction industries in addition to the food and agricultural industries, but there are also great opportunities in the energy sector, our interlocutor adds.

M.S.