Interview with Mr. Nenad Vukoje, owner of the dairy Padjeni

Nenad Vukoje Padjeni

  1. The dairy Padjeni was founded 18 years ago and is now recognised on the market as a successful domestic company. How has the company developed since 1999?

More than 18 years ago, my wife and I started a small family business. Our initial idea was to make a living as a family and survive on the market. We started off with a very small investment into a military cauldron and a yogurt cup filler in rented premises of about thirty square metres. The initial capacity was 150 liters of packed yogurt. We did not have any employees, it was just our family. It is through hard work and our willingness and ambition to succeed that we managed to expand our production capacity every year and purchased equipment step by step, until 2002, when we decided to build a new facility. A year later, we moved our production there and continued to expand our business, make new products and started to conquer a new market. In 2011, we realised that we needed to have a structured plan in place to further expand. Based on the analysis of our previous work, we made a plan of activities for the period until 2025, with another analysis of the overall status in 2020. We adopted this plan and started to build a large additional hall of 1,700 square meters in 2012. Construction works finished within a year and we then installed new equipment.

There is a high level of confidence between us and 1,000 cooperatives, which is a prerequisite for us to be able to expand the processing, sales and purchase of raw materials. We now process some 40,000 liters of milk for thirty products, which are packed and processed in accordance with the latest technology. The production process is monitored on a daily basis by four technicians, who would not let a product be placed on the market if it was not safe and of excellent quality. To make sure that the raw materials are to the high quality required, two agricultural engineers work with dairy farmers in the field on a daily basis.

  1. What products does your assortment include?

Our product assortment is divided into several units: sour milk (yogurts, creams, spreads), soft cheeses, semi-hard and hard cheeses, as well as traditional products (cottage clotted cream, “sack” clotted cream, “sack” cheese, “torotan” cheese).

  1. Products of the dairy Padjeni are distinctive on the market of BiH, and you also obtained a permit to export these products to the EU as of 2016. In which markets are your products sold nowadays?

You can buy our products in almost all cities of BiH, as well as in Montenegro.

  1. Milk and dairy products belong to the group of most sensitive products, which requires more control. When it comes to modern production methods, it is impossible to imagine any kind of serious production without control over quality and sanitary safety of the products as well as the technological process itself. How important is it for you to invest in new production technologies and keep up with European standards?

Once you enter the production plant at our dairy, you may notice that all of our technical equipment is new and belongs to the category of new technologies. The processing cycle is completely closed and constantly monitored by technicians using the HACCP system and internal control on a daily basis. Aside from our own laboratory, all products are also controlled in authorised external ones. To be able to survive on the market, we must invest in new technologies and new products on a daily basis.

  1. You are one of the BiH companies that has benefited from the support of the EBRD and the EU through the Project for supporting competitiveness of small and medium enterprises in Bosnia and Herzegovina (BiH-SME-CSF), which helps these businesses to make necessary upgrades to production facilities and comply with EU directives in the fields of environmental protection, occupational health and safety and product quality and safety. How did this improve your business and make you more competitive on the EU market?

A project like the EBRD’s and EU’s is very important for our future development: it provides a boost to new investments and new technologies that ensure environmental protection, occupational health and safety and product quality and safety – all crucial  elements to support both for our business as well as our country’s economy.

  1. How many people do you employ and how important is their protection and safety during the production process?

We currently employ 112 workers who are subject to all measures of occupational health and safety during the production process. It is enough to say that there have been no injuries at work since we started our business.

  1. Are you satisfied with the business results you achieved in 2017?

2017 will be extremely successful for us. We realised our plan to invest more than BAM 1,600,000 to expand our production facility, to purchase equipment and new vehicles to distribute our final products, as well as to establish lacto-freeze stations for collecting raw milk. Our plan for processing and selling final products was to grow by 20.4 per cent, which we will exceed by more than 9 per cent. I think this is a great success. Furthermore, we will soon start a number of activities to reach out to other new markets.

  1. Which other markets do you plan to expand to? What are your plans for business development on the local, regional and EU markets in 2018?

Our plans are based on daily expansion, primarily on the local market as well as in the neighbouring and EU countries, Russia, Turkey etc. It is also important to adjust the production programme to the market, to listen to demands of the market and to adapt immediately to it.

  1. Aside from investments in new production technologies, your company is also known for investing in the community through socially responsible activities. What kind of projects are you particularly proud of?

For our local community, which consists of around 250 households in fifteen settlements, we launched a water-supply project worth more than BAM 1.5 million five years ago. The project is coming to an end and the RS Ministry of Agriculture and the local community have helped us a lot. Approximately 90 per cent of the project has been implemented so far. We are planning to complete the rest of it next year.

The project ensures that more than 50 kilometers of the water supply network and several pumping stations will function without difficulties. I am very proud of this because our community has believed in it since the very beginning, although there were unsuccessful attempts to do this project before.

We also participate in helping people who need help the most, as well as in projects of general interest, such as construction of local infrastructure, religious facilities and similar activities.

Interview with Mr. Esad Jakubovic, general manager of “Izazov”

G. Esad Jakubovic Izazov

Furniture factory “Izazov” has been operating since 1996. The company has been expanding its operations significantly in recent years both on the local and export markets, and invested

into new equipment to become even more competitive, thanks to finance from the European Bank for Reconstruction and Development and support from the European Union.

Esad Jakubović, general manager of  “Izazov”, tell us more about his work and the company’s success.

  1. The furniture factory “Izazov” has been operating since 1996. What did the course of its development look like since the moment it was founded?

The company was first dealing with primary wood processing, before the first drying facility was installed at the beginning of 2000, which was a basis to start with final wood processing. The first CNC machine was purchased in 2002 and investments in the latest technology have continued ever since. Aside from technology, the company constantly invests in education of new and existing workers, as well as in product design.

Aside from production, “Izazov” d.o.o. also invests to expand its retail and wholesale network, and now it owns three retail stores and sells its products to almost all major furniture distributors in BiH, a large part of which is exported to the surrounding and Western European countries.

  1. Your distribution network expands throughout the territory of BiH and you export your products to the countries of the region, as well as to European market. Are you satisfied with the results you have achieved on the local and foreign markets?

The sales process on the local and foreign markets has been progressing gradually through different phases. First, we “conquered” the local market, and then we could easily place our products on foreign markets as well. It is only by joining the foreign markets that you can see your real value and whether your products are good enough. The easiest way to evaluate your products is to present them at international fairs. In order to sell your products abroad, you have to be competitive when it comes to quality, design, prices and delivery deadlines. If you don’t respect that, you cannot export your products.

For more than 10 years now, our company has been exporting its products to Montenegro, where we registered a growing demand for our products. Aside from Montenegro, we also export our products to Serbia, Croatia, Slovenia, Austria, Switzerland, Germany and other countries of Western Europe, where we also registered a growth in the sales. We will register a growth in exports by approximately 80 percent this year. We will certainly try to keep this trend in the year of 2018 too.

  1. How important is it for you to invest in new production technologies and to keep up with European standards?

Investing in new production technologies is essential for a company’s growth and development, aside from investing in employees and product design and quality. No product of good quality can be made without using the latest technology; otherwise, a product is not competitive on the market and its quality is also questionable.

  1. You are one of the BiH companies that has benefitted from the support of the EBRD and the EU through the Project for supporting competitiveness of small and medium enterprises in Bosnia and Herzegovina (BiH-SME-CSF), which helps the small and medium enterprises to make the necessary upgrades of production facilities and comply with EU directives in the fields of environmental protection, occupational health and safety and product quality and safety. How did this improve your business and increased your competitiveness on the EU market?

With support from the EBRD and the EU, we purchased two modern CNC machines and thus upgraded the qualify of our products, increased the productivity, reduced the consumption of processed materials (wood) and protected the employees in a way that all operations that might endanger the workers’ health (injuries) are now completed by CNC machines. By introducing these machines, we also managed to improve the design of our products as well as their competitiveness on both the local and foreign markets. All of this will eventually result in a growing production and profit of the company.

  1. How successful is your company? What are you particularly proud of?

The figures confirm our success: we’ve more than 12,000 satisfied customers, more than 50 partners, more than 5,000 finished products, 127 certificates and more than 100 employees.

I am proud of our approximately 140 satisfied employees of this company, who made it possible for us to constantly grow and progress. I am proud of the fact that we export more than a third of our products and, given our quality, design and prices, we are unable to meet the needs of all of our customers as their demands exceed our production capacities. I am proud of the fact that we have a unique design of our products, we are distinctive on the market, we are leaders in the production of this kind of furniture and we have a number of satisfied customers who recognized our efforts in the process of production.

  1. What kind of trends are currently present on the EU market when it comes to furniture production?

There are several trends in furniture production. Customers primarily want quality and environmentally acceptable products. They want the products to be entirely made of wood in combination with medium density fiberboards with flat lines, which are adjusted to the increasing demands of end users

  1. What do you find important for a company to survive on our market?

Continuous education and specialization for the employees. Investing in the production by purchasing the latest machines, in order to be competitive on the market, as well as investing in the development of new products and keeping up with the trends and demands for certain products. Quality is not an issue here, it is implied because you cannot grow or develop without quality products.

  1. What are your plans for further development of business on the local, regional and European markets?

When it comes to production, we plan to build a new production facility on the surface of up to 1,500 square meters next year, which will be used for the production of upholstered furniture. Also, we are collecting the necessary documentation for construction of a modern sales facility on the surface of approximately 4,000 square meters, which will be built in Tuzla. The works on construction are scheduled to begin at the beginning of the next year. We also plan to purchase new machines next year, in order to increase the production in accordance with growing demands for our products. As far as the export is concerned, we plan to keep up with the trend of increasing the exports of both the existing and new products.

  1. Who is Esad Jakubovic privately? How do you spend your free time, do you have some hobbies?

My name is Esad Jakubovic and I was born on May 2, 1965. I graduated from the Faculty of Economics in Sarajevo. I am a married father of two children, my daughter Emina and son Tarik. Emina graduated from the Faculty of Economics in Sarajevo, she is currently a post-graduate student, while Tarik is in the fourth grade of the Grammar School in Tuzla. I like fishing and I that is how I spend all of my free time (if any). This year, I managed to catch a 40-kilogram catfish in the Snjeznica Lake. Aside from fishing, I also like photography, nature and everything related to it.

  1. In your opinion, who is a successful manager? What makes a successful manager from your point of view?

I think it is hard to define a successful manager. However, if a person really wants to be successful in what he does, all he has to do is work hardly, constantly and continuously. It is only by hard work that you can achieve your goals. Of course, you also need selfless help of your family and coworkers, you have to have a clear goal and vision of the growth and development of your company, you should not get into fraudulent activities and you should not endanger anyone in your work.

EBRD and EU supporting small businesses in Bosnia and Herzegovina

The EBRD and the EU are successfully implementing the programme “Supporting competitiveness of small and medium enterprises in Bosnia and Herzegovina (BiH-SME-CSF)”. After one and a half years of the two-year project €15.7 million in EBRD/EU small business loans have been provided and participants are also expected to receive more than €4 million in grants from EU funds.

Small and medium-sized enterprises (SMEs) are central for economic development. Small businesses and entrepreneurship traditionally represent a source of growth. They are generators of jobs and contribute to improvements in production, work productivity and business efficiency.

The biggest problem of the private sector and SMEs, aside from administrative barriers, is the lack of capital. The experiences of developed countries suggest that entrepreneurs need to be provided with favorable financial incentives that would secure the funds for investments.

Ian Brown, EBRD Head of Office in Bosna and Herzegovina said: “We are pleased with the success of the programme and grateful for the EU’s continuous support. We are complementary in our goals and our approach and working together allows us to make a real impact on the development of the economy in Bosnia and Herzegovina.”

The European Union has established a long-lasting cooperation with the EBRD in the implementation of SME support programmes in Bosnia and Herzegovina by complementing EBRD loan funding with grants coming from IPA, the Instrument for Pre-Accession. These programmes have yielded impressive benefits. The EBRD experience in the EU's SME policy aims to create maximum benefits and further synergies by facilitating the introduction of EU standards through the provision of adequate advisory services as well as better access to finance”, said Andrea Vera, Head of Section - Economic Development, Infrastructure and Natural Resources, Delegation of the European Union to Bosnia and Herzegovina.

The current support from the EBRD and the EU is oriented towards increasing the competitiveness of small and medium-sized enterprises on local, regional and European markets through the harmonisation with EU directives and standards in the fields of occupational health and safety, environmental protection and product safety and quality.

As many as 58 projects have been financed by the EBRD credit line so far, 44 of which have already been finalised and verified, while five projects are yet to be verified over the next two months. The financed projects are in the fields of wood processing industry (22%), metal processing industry (12%) and food industry (10%).

The dairy “Padjeni” in Bileca is one of the companies that achieved the harmonisation with EU directives and its products have been available on the EU market since 2016. General Manager Nenad Vukoje said: “In order for a company to succeed in our market, it constantly needs to upgrade its production and products. To make that happen we need to invest in new technologies and new products. The EBRD/EU project has motivated us to complete an investment of BAM 1.6 million (€800.000) this year. We completed a facility with the capacity to process nearly 60,000 liters of milk a day into 30 different products. As part of the project, we managed to purchase a yoghurt bottle filling machine, an electric generating unit and the enlargement of our production hall facility.”

Since the start of its operations in Bosnia and Herzegovina, the EBRD has invested more than €2 billion in 146 projects in the country. The bank invests in infrastructural development, support to small and medium enterprises and strengthening of financial sector.

The European Union has invested more than €50 million in small and medium-sized enterprises in Bosnia and Herzegovina over the past 15 years. In 2018, further 15 million will be available to support SMEs in sectors such as tourism, food industry, wood and metal processing.

Mostar, March 16, 2017. – Europan Bank for Reconstruction and Development in cooperation with Intera Technology Park has presented the programmes for support to SMEs in Bosnia and Herzegovina

European Bank for Reconstruction and Development (EBRD), in cooperation with Intera Technology Park and Project Consultant on implementation of EU/EBRD's credit line for supporting competitiveness of small and medium enterprises (SMEs) in Bosnia and Herzegovina (BiH-SME-CSF), has organised a seminar with the subject of EBRD's programmes for support to development of small and media enterprises in Bosnia and Herzegovina by complying with EU directives in the fields of environmental protection, occupational health and safety and product quality and safety. The seminar was held for 35 participants on March 16, 2017 at the Intera Technology Park in Mostar. This was the third seminar with the same subject and the first two were held before in Banja Luka and Tuzla.

The EBRD's support and advisory programmes for SMEs in Bosnia and Herzegovina were presented by Mr. Zihnija Hasovic, EBRD's manager of advisory programmes for SMEs in Bosnia and Herzegovina.

Mr. Muris Mesetovic, local coordinator on implementation of EU/EBRD's credit line BiH-SME-CSF, has introduced to the participants of the seminar basic information about the credit line and enphasised that the credit line of EUR 20 million was already disbursed and/or reserved for the projects proposed from SMEs during the first year of implementation of the Faciltiy, even it was expected to last for longer period of four years. No matter of that fact Mr. Mesetovic has adviced the companies to still propose their projects to local Partner Banks for financing and apply for loans, since it is possible that some of the companies will not complete the loan procedure or would draw lower loan amount than reserved and the possibility for loans and with 15% of EU financed incentives of loan amount will arise again to other porposed projects. Mr. Mesetovic has also informed the participants of the seminar with the process and the requests for compliance of SMEs in Bosnia and Herzegovina with local regulations and EU directives and standards in the fields of environmental protection, occupational health and safety and product quality and safety.

Miss Erna Kurtovic, BiH-SME-CSF expert for support to the clients, has presented to the participants of the seminar the case studies based on the projects financed through BiH-SME-CSF with best practice experience from those projects in the fields of environmental protection, occupational health and safety and product quality and safety.

The participants of the seminar were active in their participation and dicussed with the presenters and asked various questions related to the theme of the seminar.

Tuzla, March 6, 2017. – Europan Bank for Reconstruction and Development in cooperation with the Chamber of Commerce of Tuzla Canton has presented the programmes for support to SMEs in Bosnia and Herzegovina

European Bank for Reconstruction and Development (EBRD), in cooperation with the Chamber of Commerce of Tuzla Canton and Project Consultant on implementation of EU/EBRD's credit line for supporting competitiveness of small and medium enterprises (SMEs) in Bosnia and Herzegovina (BiH-SME-CSF), has organised a seminar with the subject of EBRD's programmes for support to development of small and media enterprises in Bosnia and Herzegovina by complying with EU directives in the fields of environmental protection, occupational health and safety and product quality and safety. The seminar was held for 45 participants on March 6, 2017 at the Chamber of Commerce of Tuzla Canton in the city of Tuzla.

Mr. Nedret Kikanovic, MSc, the president of the Chamber of Commerce of Tuzla Canton, has welcomed the participants of the seminar and wished them fruitful participation at the seminar

The EBRD's support and advisory programmes for SMEs in Bosnia and Herzegovina were presented by Mr. Zihnija Hasovic, EBRD's manager of advisory programmes for SMEs in Bosnia and Herzegovina.

Mr. Muris Mesetovic, local coordinator on implementation of EU/EBRD's credit line BiH-SME-CSF, has introduced to the participants of the seminar basic information about the credit line and enphasised that the credit line of EUR 20 million was already disbursed and/or reserved for the projects proposed from SMEs during the first year of implementation of the Faciltiy, even it was expected to last for longer period of four years. No matter of that fact Mr. Mesetovic has adviced the companies to still propose their projects to local Partner Banks for financing and apply for loans, since it is possible that some of the companies will not complete the loan procedure or would draw lower loan amount than reserved and the possibility for loans and with 15% of EU financed incentives of loan amount will arise again to other porposed projects. Mr. Mesetovic has also informed the participants of the seminar with the process and the requests for compliance of SMEs in Bosnia and Herzegovina with local regulations and EU directives and standards in the fields of environmental protection, occupational health and safety and product quality and safety.

Miss Erna Kurtovic, BiH-SME-CSF expert for support to the clients, has presented to the participants of the seminar the case studies based on the projects financed through BiH-SME-CSF with best practice experience from those projects in the fields of environmental protection, occupational health and safety and product quality and safety.

The participants of the seminar were active in their participation and dicussed with the presenters and asked various questions related to the theme of the seminar.

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Copyright © 2016 BiH-SME-CSF

This document has been produced with the financial assistance of the European Instrument for Pre-accession Assistance. The views expressed herein are those of the Consultant and can therefore in no way be taken to reflect the official opinion of the European Union.