INTERVIEW – Bosnian Juice Producer Bony Sees Sales Rising 20% Next Year

“For us, the only way to overcome the crisis next year is to boost exports to Sweden and Germany,” Colic told SeeNews over the phone from the northeastern city of Tuzla, where the company is based.

Privately-held Bony has signed a five-year deal to start bottling juices under the Swedish brand Rio and distribute them on the markets of Slovenia, Bosnia, Croatia, Montenegro and Serbia. The Rio juices will be marketed in five different packages.

“The production will start on January 15 and the volumes will depend on demand,” Colic said, adding the company is targeting a 10% market share in some of the five countries in five years.

He also said the Swedish firm has conducted a research on these markets, showing there is room for grasping shares of 7.0% to 10.0% in some of them.

Bony sells its own products, Bony-branded soft drinks and Vitalis-branded juices, in Slovenia, Montenegro, Switzerland, and at home.

“We are trying to enter the German market through a big German distributor with our tetrapack Vitalis juices,” Colic said. Bony hopes to sign a distribution contract for 2010 after missing this year’s deadlines.

Colic said the company is expecting to receive a water bottling concession in the second half of 2010 and start selling bottled water in Bosnia soon after. In the soft drinks segment, Bony controls between 7.0% and 10.0% of the Bosnian market.

“We started producing Vitalis juices a year and a half ago and we’ve seen a yearly growth of 30% since then,” Colic said.

“Our plan is to account for 10% of all juice sales in Bosnia next year.”

Colic also said some 70% of the juices sold in Bosnia come from abroad, mainly from Serbia. Bony sees in this domination of imports a chance for its own development, modernization and introduction of new products because, especially in times of crisis, local producers have lower transport costs and fewer other expenses compared to importers.

Just like many other Bosnian firms, Bony has faced liquidity problems, finding it hard to get access to credits. Strained liquidity, however, has had no impact on the company's production volumes this year.

“We will end the year with a profit, though not as good as planned,” Colic said.

The firm hopes to qualify for a credit from the European Bank for Reconstruction and Development to finance its investment programme next year.

“We expect these funds in March,” Colic said, adding Bony plans to use the investment for the launch of a juice production line for two-litre tetrapack packs and for modernization of its production process aimed at energy saving.

“The European funds are much more favourable and this is the only chance for us to develop,” Colic said.

He added Bosnian commercial banks are lending money at interest rates of 10-12 percent, "which is very expensive and no production sector is able to earn enough to repay the loans".