EBRD loan stimulates private businesses and job creation in FYR Macedonia

By Marjola Xhunga

Macedonian food manufacturer Vitaminka expands

Vitaminka, Macedonia's largest food manufacturer, is thriving and creating jobs in FYR Macedonia thanks to funding from the EBRD since 2007. EBRD loans have been key to ensuring Vitaminka's successful recovery from the economic slump following the dissolution of the former Yugoslavia.

Established business, new economic challenges

Simon Naumoski has been with Vitaminka, the largest food manufacturer in FYR Macedonia, since 1974. A former MP, Mr Naumoski, now the general manager of Vitaminka, he says he prefers business to politics.

Sitting comfortably in his office in the city of Prilep, in the west of FYR Macedonia, he is convinced that Vitaminka performs better today than back in 1956 when it was established.

Just like the country, Vitaminka has seen tumultuous days and survived. “The company was created to meet the needs of the unified former Yugoslav market. Until the dissolution of former Yugoslavia in 1991, Vitaminka was catering for 24 million people and its sales reached €34 million per year,” explains Mr Naumoski.
With FYR Macedonia gaining independence in 1991, Vitaminka struggled as neighbouring countries abruptly closed their borders, leaving just a domestic market of two million people.

The collapse of the export market was followed by four years of zero sales growth for Vitaminka. A drive around the city of Prilep reveals dilapidated factories from the old communist days. Once established companies, they closed their doors and the city’s workers left to find jobs elsewhere.

But Vitaminka persevered and survived. In 2007, it received its first loan from the EBRD. A €4 million loan from the Bank was needed to develop new products and expand the company’s activity in the Western Balkans and other countries in the EBRD’s region.

“The loan is an example of how the EBRD is helping good private domestic companies to grow in FYR Macedonia,” says Elena Urumovska, Acting Head of EBRD’s Skopje Resident Office.

EBRD funding stimulates growth and jobs

Mr Naumoski explains: “The EBRD finance will help Vitaminka to grow and more importantly re-enter into regional markets where it once operated and to explore new opportunities in these markets.”

With sales growing steadily and with clients from Bosnia and Herzegovina to Slovenia, Vitaminka has become the second biggest private business in the city of Prilep. This means a lot to Vitaminka’s 420 employees and to the local farmers who provide the raw materials for Vitaminka’s 300 products. They, at least, haven’t had to move to bigger cities or abroad to find a job.

“Over 50 people have been hired to work on a new product, soft chocolate cookies, that Vitaminka is introducing with the help of the EBRD loan,” explains Mr Naumovski.
The loan to Vitaminka comes under the Western Balkans Local Enterprise Facility, an investment instrument established in 2006 by the EBRD with financial contributions and support from the Italian government.

In 2007, the Italian government replenished the facility, which now amounts to €65 million, to benefit businesses in need of finance in the Western Balkans.
“The replenishment demonstrates the Italian government’s commitment to the Western Balkans,” emphasized Enzo Quattrociocche, the EBRD’s Director for Italy. “This Facility is instrumental in engineering new solutions for financing small and micro businesses in the Western Balkans,” he added.

The Western Balkans Local Enterprise Facility provides individual investments up to €8 million and has been instrumental in providing much-needed finance for the Western Balkans through mainly equity and quasi-equity financing to small and medium local enterprises.