E-Commerce Sees Croatian Modepack's Business Excel, Investments Coming

By 28 September 2021

September the 28th, 2021 - The Croatian Modepack company has a lot to thank e-commerce for, which rose in popularity in Croatia during the coronavirus pandemic. Investments are on the cards as business excels for this Zagreb-based enterprise.

As Poslovni Dnevnik/Darko Bicak writes, the likes of Amazon, H&M, Vans, Adidas, DHL, DPD, Loomis, and numerous European financial institutions as well as the diamond exchange in Antwerp (Antwerpen World Diamond Centre) are just some of the many users of courier and security packaging of the Croatian Modepack company.

Although it has only been on the market for five years, Modepack is already one of the global leaders in the production of high-quality packaging for the logistics transport of goods, with an emphasis placed on e-commerce, courier deliveries and security packaging for money and valuables. They export to 32 world markets, with a total share of exports in business of over 90 percent. As Jure Siric, the director and owner of the company, explains, the Croatian Modepack company was based on the previous assessment that e-commerce would soon become a reality, and this happened long before he himself had hoped.

“I'm not a complete foreigner in this industry because I come from the family company Weltplast, which has been dealing with packaging and recycling since back in 1983, and since 2010 I've been leading sales for EU markets in it. But... that's a big company that deals with packaging and raw materials in general, and my desire was to step into something new and different. Apparently, I wasn't wrong in making that move,'' said Siric.

He added that the global coronavirus pandemic, although it halted the entire society and economy over the past year, has led to enormous growth in the e-commerce segment that has surprised them as well. Due to the exponential growth of the business, the Croatian Modepack company decided to embark on a new investment and to go for double capacities in 2020. In one month, construction work should begin on their new plant in Velika Gorica which will total at a massive 50 million kuna. The plant will be in the immediate vicinity of their important customer, Croatian Post (Hrvatska posta) which has its own logistics and distribution centre located there.

The project, which should be completed by the summer of 2022, was also helped by the EU with handsome funds in the amount of 7.5 million kuna.

"We're currently working on five production lines, which is actually insufficient for us. In addition to moving the existing ones, we're going to install three new production lines in the new plant, which will have the same capacity as these five put together, but will have much greater technological possibilities, especially in terms of paper packaging, which is increasingly in demand due to trends,'' said Siric. Of the total investment, more than two thirds of it will be invested into equipping the plant's production, while the rest will go to construction works.

The new plant will employ about 20 new workers, which will mean an employment growth of about 50 percent, given that they currently have 42 employees. The director of this company explained that the new plant will have a capacity of 12 to 14 production lines, if market conditions require it, and about 80 employees.

"As ecology and the green agenda are generally a very important topic in our business, we've even decided to apply this model when planning investments. To be more specific, we decided not to go into a greenfield investment, but to recycle an existing facility. We soon found what we were looking for in the unfinished project of the failed construction company Tempo, which started building its sales headquarters in Velika Gorica back in the mid-1990s, but due to business difficulties ,the project was halted and the company ended up going bankrupt,'' explained Siric.

As it is a large area, a building of 5500 m2 and land covering 32,000 square metres in total, further expansion is possible. Flying on the wings of e-commerce and volume growth, the Croatian Modepack company has been recording constant growth in terms of revenue that amounted to 50 million kuna last year, which represented growth of 60 percent when compared to the year before when they grew by 30 percent, while this year they expect additional growth of 20 percent and revenue of about 60 million kuna. With this new plant and the expansion of their range, they expect that in 2025, their revenue should reach the 150 million kuna mark, if not more.

“Global e-commerce is growing unstoppably, and even before the coronavirus pandemic, during 2019, global growth stood at 21 percent. Data for last year shows that countries with more developed e-commerce achieved significant, but still lower growth, while countries like Croatia measured growth in literal hundreds of percentage points. The statistics at our disposal show that e-commerce at the EU level increased by 31 percent last year, and if we look at some of the most important member states, then we can see that in Germany it is 22 percent, in the United Kingdom 31 percent, and in Spain 75 percent. Estimates for Croatia are over 200 percent,'' stated Jure Siric.

The Croatian Modepack company otherwise truly represents the pinnacle of technology in its sector and exports as much as 92 percent of its production.

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