Talks are Underway Over the Possible Merger of Two of the Biggest Bosnian Tobacco Companies

Source from:  worldtobacco.co.uk 08 November 2007 11/09/2007

The director of the struggling Fabrika Duhana Mostar tobacco company in Mostar, Bakir Pekusic, has confirmed that negotiations are underway about a strategic partnership with Fabrika Duhana Sarajevo in the Bosnian capital. He said that experts from Fabrika Duhana Sarajevo had arrived at the Mostar company to make a complete financial study of it. "The last phase of talks with Fabrika Duhana Sarajevo is underway," he said. Fabrika Duhana Sarajevo has reportedly drawn up a plan to restructure the company in Mostar by using new technologies that will make it more competitive in the market. Officials at Fabrika Duhana Mostar have said that the company had a business loss of 1.1 million pounds in the first six months of the year. At the same time, Fabrika Duhana Sarajevo reported a profit of 5.0 million pounds last year. But officials at Fabrika Duhana Sarajevo hinted that the talks were moving slowly. "Fabrika Duhana is losing a lot of time," one of them said. Fabrika Duhana Sarajevo has made no official comment on the potential merger but, speaking off the record to the local newspaper Nezavisne Novine, one manager said: "We would be interested in investing in Fabrika Duhana Mostar, but we do not have enough information regarding its business results and the financial situation of the company." Fabrika Duhana Sarajevo spokesman Mladen Vujic has said to Central European News: ''I have been informed by the cabinet of the general director that we will come up with answers after this issue has been clarified. At the moment, I can't tell you more''. The government of Bosnia and Herzegovina owns a majority of shares in both Fabrika Duhana Mostar and Fabrika Duhana Sarajevo. Fabrika Duhana Mostar employs 136 people, and its officials say that the firm will have to sell 35 tonnes of cigarettes a month to have a positive economic result. Fabrika Duhana Sarajevo sells 300 tonnes of cigarettes a month. Enditem