Croatia's Podravka starts to wind down production operations in Poland

Production operations based in the Kostrzyn–Slubice special economic zone, in western Poland, will be discontinued as of March 31, 2015, the company said in a filing to the Zagreb bourse.

The move is part of plans to relocate manufacturing of EU-bound products to a single site in the Croatian northern town of Koprivnica.

At its factory in Poland, Podravka manufactures products under its Vegeta universal spice brand, according to information available on the company's website.

The Croatian company said discontinuing production in Poland will have a positive effect on business performance in 2015 as it would lead to an increase in the rate of utilization of production capacity at the Koprivnica site, a lower cost per unit of production and reduced staff costs.

The negative impact from the decision in 2014 is estimated at around 20.6 million kuna ($3.4 million/2.7 million euro), mainly related to asset write-offs and severance payments for around 45 workers.

Podravka opened its 11,000 square metre factory in Poland in 2000, employing 180 people.

(1 euro=7.6618 Croatian kuna)