Fiasco of Croatia’s State-Owned Toilet Paper Business

By , 25 Jan 2016, 14:26 PM Business

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Troubled times for toilet paper in Croatia.

The project of production of toilet paper, in which the state-owned Narodne Novine public company has invested more than 63 million kuna since 2013, has brought very poor results, according to the company itself. However, the management of Narodne Novine did not want to announce the first preliminary business results of Mekkoo, its subsidiary for toilet paper production. In response to reporters’ question, they only stated that "a complete analysis of business results has not yet been completed, but data which is currently available indicate that successful business results have not been achieved", reports on January 25, 2016.

The very decision to launch this kind of production during the period when Narodne Novine itself should undergo restructuring and partial sale of "non-core" activities provoked a lot of scepticism and surprise. Narodne Novine is a public company whose main business is publishing the Official Gazette of the Republic of Croatia, where all public laws and regulations are published before they can take effect.

The implementation of the toilet paper initiative has received criticism even from the State Audit Office, but for now it seems that the project will continue for at least some time. The factory in Krapina was supposed to start with the production of its own brand, but there are no real results. The preparations for launching the new brand are extensive and complex, according to Narodne Novine, seemingly so complex that they have refused to talk about it in detail.

But, after the dismissal of former Chief Executive Officer Ivan Cvirin and two other members of the Board of Directors who did not meet expectations, Mekkoo is now led by new CEO Dario Kos. Narodne Novine assures the public that business plans drafted for Mekkoo envision stabilization and an increase of production and financial revenues. However, the fact is that Narodne Novine expects that there will be changes in its own leadership and operations quite soon, so the unsuccessful toilet paper business will certainly be under additional scrutiny by the new company management.

From Croatia with Madness

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