Type
Bankruptcy
Country
Croatia
Region
Hrvatska; Kontinentalna Hrvatska; Požeško-slavonska županija
Location of affected unit(s)
City of Pozega
Sector
Manufacturing
Manufacture Of Material For Textiles, Apparel, Leather And Related Products
Manufacture Of Textiles
13.92 - Manufacture of made-up textile articles, except apparel

170 - 172 jobs
Number of planned job losses
Job loss
Announcement Date
12 August 2021
Employment effect (start)
9 August 2021
Foreseen end date
19 August 2021

Description

Orljava, one of the most famous state-owned Požega-based textile factories, is shutting down, after its 75 years of operation in Croatia. The company has confirmed that most of the workers will be laid-off.

The factory ended up in bankruptcy due to huge debts. The final blow was by its German partner, OLYMP Bezner KG, which cancelled further orders. Orljava worked for a long-time sewing clothes, primarily shirts, for OLYMP Bezner KG. However, production costs were not covered for long, which eventually led to the massive losses. 

In the meantime, the state, which owns the factory, has not reacted to the accumulated debts and the deteriorating situation for years.

The Croatian state got involved in the settlement at the end of June 2021 and paid the affected workers three legally guaranteed payouts in one payment from the Fund for ensuring workers’ claims in the event of an employer’s bankruptcy (Fond za radnicka potrazivanja) after their protests. According to the local media Telegram, Hemco, a Đakovo-based company specialised in manufacturing protective clothes, once expressed its interest in taking over Orljava, provided that the government covers the existing debt in the amount of HRK 30 million (€4 million).

Currently, the bankruptcy trustee is still in the search for a strategic partner, however, hopes are dwindling every day.

President of the Novi sindikat (New Trade Union) believes that workers have low possibility to obtained legally stipulated severance pay due to the limited financial resources and that it is devastating to close the last textile factory in Croatia.


Sources

Citation

Eurofound (2021), Orljava , Bankruptcy in Croatia, factsheet number 105130, European Restructuring Monitor. Dublin, https://restructuringeventsprod.azurewebsites.net/restructuring-events/detail/105130.