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Slovenia Business Week no. 02/2005: Istrabenz Bidding for Serbia's Leading Beverage Producer

Istrabenz, the Slovenian energy and tourism company, is bidding for the majority stake in Rubin

Istrabenz, the Slovenian energy and tourism company, is bidding for the majority stake in Rubin, a leading producer of alcoholic beverages, wine and soft drinks in Serbia and Montenegro.

According to the Serbian Privatisation Agency two other companies are competing for 70 percent of Rubin: Serbia's Invej, and a syndicate of two Serbian companies, the Subotica-based wine producer Vinarija Coka and Kula-based Rodic M&B.

With a 39 percent market share in Serbia-Montenegro, Rubin is the leading producer of spirits. The company, which employs around 1,000 workers, is also the country's third biggest wine producer with a market share of 14 percent.

A decision about the winning tender is expected by the end of January.

Originally an energy and tourism group, Istrabenz is entering the food-processing industry both in Slovenia and SE Europe because it believes there is enough potential to create the value added, its CEO Igor Bavcar has recently said.

Aware of the process of consolidation in this industry, Istrabenz published a bid in December to acquire Kolinska, one of the largest Slovenian food-processing companies, in what promises to be one of the biggest mergers ever in Slovenia.

In line with its strategy to enter the food industry, Istrabenz expects its investment in Rubin to raise synergy in marketing and distribution on the Slovenian and SE European markets, chair of the management board Bavcar said after the bids for Rubin were opened on 30 December.

Istrabenz has already signed a cooperation agreement with the Slovenian wine producer Vinakoper if Istrabenz wins the Rubin competition.

Established in 1955, the Krusevac-based Rubin produced 11.6 million litres of beverages in 2003, with revenues totalling EUR 25.6m and operating profit EUR 3.8m. Brandy accounts for as much as 70 percent of its output. The book value of the company's capital is EUR 31m.

Source: Slovene Press Agency STA