INTERVIEW - Serbian Food Wholesaler Kvin Eyes 15% Rise in 2009 Turnover Despite Crisis

“Based on our eight-month results, we predict we will increase turnover by 15% this year, as planned. Unfortunately, due to the plunge of the dinar our net profit will be slightly lower,” Paunovic told SeeNews in an e-mailed interview.

The Serbian dinar traded at 93.3323 per euro on Wednesday, weaker than 77.1451 per euro a  year ago, according to Serbian central bank statistics.

“We are not a major player in the country but we are, with no doubt, the biggest client of local bakeries and dairy houses, in addition to relying on other suppliers,” he said.

“In 2010 we plan to raise our current market share of 15% by three percentage points. We plan to achieve this by investing in more retail stores and raising the turnover of the existing ones.”

The company, which employs about 150, raised its operating revenue to 1.3 billion dinars (14 million euro/$20 million) in 2008 from 1.1 billion in the previous year. It also increased its net profit to 7.5 million dinars last year from 3.9 million in 2007. 

Kvin, founded in November 1989, was among the pioneers of private ownership during the breakdown of communist Yugoslavia in the last decade of the 20th century. Its 6,000 square metre wholesale store in the town of Kragujevac, in the heart of the heavily forrested, fertile region of Sumadija in central Serbia, serves a market of around one million people.

“We operate mainly on the market of Kragujevac and central Sumadija’s seven municipalities. Our biggest competitor here is Delta Maxi, then Metro, Idea and local chains Dis and Trnava Promet,” Paunovic said. 

“About 8,000 retailers buy products from our stores, and we plan to raise their number to 12,000 over the next six months,” he added. 

Delta Maxi is part of Delta Holding group owned by Miroslav Miskovic, a Serbian tycoon who emerged in the early 1990s during the rule of ex-Yugoslav strongman Slobodan Milosevic. German retailer Metro operates five hypermarkets in Serbia, while Idea, set up in 1992, is a subsidiary of Croatian food concern Agrokor.

Kvin invested exclusively in developing its retail network last year and plans to start producing hothouse vegetables in 2010.

“We are feeling the crisis mainly through the anxiety of some business partners, on the one hand, and the government’s inability to adjust to long-term requirements, on the other. But we are operating at our usual pace at present because people have to eat. So, the crisis will affect us at the very end, if it comes to that at all,” Paunovic said.

(1 euro=93.3323 Serbian dinars)