The Agrokor skyscraper in Zagreb, Croatia © OPIS Zagreb/Shutterstoc
Starting as a consultant, Pavao Vujnovac quickly reached the top of economic power in Croatia: after having conquered the gas market with his PPD, he then purchased the “sick giant” Agrokor, and today boasts interests in the most varied sectors, both worth today a fifth of Croatian GDP
Pavao Vujnovac is not a name known to the Italian public and, until a few months ago, it wasn’t even known in Croatia. Soon, however, this 50-year-old entrepreneur will control a fifth of Croatia’s gross domestic product. After the exit of Ivica Todorić – the millionaire founder of Agrokor, who fell into disgrace together with his company in 2017 – a new tycoon, perhaps even richer and more powerful, makes his appearance in the political and economic panorama of Croatia.
The rise of the gas man
“I didn’t even have a cent. I have crossed thresholds all over Europe, looking for opportunities, and I am not ashamed of it.” In a recent long interview with the portal Telegram Pavao Vujnovac describes his first years of activity in this way.
Born in Osijek in 1974, Vujnovac graduated in Economics in the capital of Slavonia in 2005, at the age of 31. To the press, he told the press that he had gone through “difficult times” and had to do “several jobs as a student”. “At a certain point, in addition to a job on a construction site, I also tutored mathematics,” the entrepreneur confided to Telegram. In 2006 he began his working career in the gas sector, as a sales consultant within the local distributor PPD (Prvo plinarsko društvo) based in Vukovar. A few years pass and in 2009 PPD is submerged in debt. Vujnovac takes advantage of the situation and takes over the company, buying it (along with his debts) through his newly registered Energia Naturalis. Vujnonac was then 35 years old.
Then came the years of liberalization of energy distribution, a gradual process due to Croatia’s entry into the EU in 2013. “If in 2010 private companies held a market share of less than 10%, in 2015 they reached around 70%”, write Bajo, Primorac and Jurinec in a study published in 2016 in the journal Tax authorities of the Croatian Public Finance Institute.
“Responsible for this change in the market structure is Prvo plinarsko društvo, whose turnover grew from 51 million kuna in 2011 [circa 6,8 milioni di euro, nda.] to almost 4 billion kuna in 2015 [oltre 530 milioni di euro, nda.]making this company a dominant factor, controlling more than a third of the gas supply market in Croatia,” the three authors continue.
The rise of PPD also has another consequence for the Croatian gas market. If since 2011 Gazprom was no longer present in Croatia as a supplier, in 2013 it made its return thanks to a contract with PPD. “The partnership between this company and Gazprom since 2013 coincides with the growth of PPD and the company’s progressive exit from the scene [pubblica, nda.] Natural Gas”, concluded Bajo, Primorac e Jurinec.
The Agrokor crisis
Between the end of 2016 and the beginning of 2017 another crisis presents Pavao Vujnovac with a new and even more tempting opportunity. Agrokor, the largest Croatian company, is in serious financial difficulties. This agri-food giant, which controls around fifty companies and employs 60 thousand people in the Balkans (of which 40 thousand in Croatia), is burdened by debt. Its founder Ivica Todorić started in the 1970s by selling flowers and got rich during the privatizations of the 1990s, but is now forced to take a step back. By a special law, known as Lex Agrokorthe government appoints an extraordinary administration for the company in order to avoid an uncontrolled bankruptcy.
“This crisis marks the end of the negotiated economy in Croatia. Sooner or later we had to go through this catharsis, because the problem was only getting bigger and more delayed. The bubble had to burst at some point.” With these words he expressed himself, in the summer of 2017 Ante Ramljak, the special administrator appointed by the government to steer Agrokor out of the storm.
In an analysis published by the Friedrich Ebert Stiftung (FES) at the end of 2017 authors Klepo, Bićanić and Ivanković describe the development path of Agrokor as “the archetype of Croatian crony capitalism”: “there is a close connection with the state, which offers both visible and invisible support in business, and it The company’s final crash is caused by the government’s withdrawal of HDZ support,” the study reads.
What happened? In short, Agrokor has grown dramatically since the 1990s, buying one company after another in Croatia and the Balkans. But this expansion was financed by increasingly expensive and difficult to obtain credits and in a context of long recession in Croatia (six years, from 2008 to 2014). At a certain point, “unable to reach an agreement with Western creditors to refinance old debts, Ivica Todorić therefore turned to Russian banks”, continues Marina Klepo in the document published by FES. The result is that at the end of 2016 Agrokor had a total debt of 3.4 billion euros (of which 1.1 billion with the Russian bank Sberbank) and owed suppliers another 2.1 billion euros. The special administration, in the midst of a political crisis, manages to avoid the collapse of the group and in 2019 Agrokor is reborn as Fortenova.
The new boss of Croatia
It is at this point that Pavao Vujnovac enters the scene. Fortenova’s largest shareholder is initially the Russian bank Sberbank, which holds approximately 42% of the shares. But with the Russian invasion of Ukraine and the introduction of sanctions by the European Union, this property becomes a problem. “The sanctioned Russian participation has significantly limited our operations and further development, making sustainable, long-term refinancing practically impossible,” he said in late 2023 at the Financial Times the new administrator of Fortenova Fabris Peruško, before adding that “this situation is finally about to change”. In the following months, in fact, Pavao Vujnovac’s OpenPass company, which today controls around a third of Fortenova, will purchase other parts for 660 million euros until it controls around 54% of the property.
At that point, the portal writes Telegram , Vujnovac will have in its hands about a fifth of the Croatian gross domestic product. In 2022, in fact, his holding company Enna Group has registered a turnover of approximately 8 billion euros (with a growth of 62% compared to the previous year), while Fortenova is around 5.2 billion, to which must be added the fact that Vujnovac is also co-owner of the Pevex chain and that Enna controls 38% of the port of Ploče.
In short, with the math in hand, “the revenues of the companies that will be owned by Vujnovac last year were around 14 billion euros, or around a fifth of the value of the Croatian GDP last year”, he concludes Telegramaccording to which “Vujnovac is becoming more powerful than Todorić ever was” and “no government will be able to ignore him”.
Strategic investments
Energy, transport, infrastructure… there are several large construction sites in Croatia that aim to transform the country thanks also to the help of European funds and Pavao Vujnovac is present in many of these projects today.
For critics, the credit goes to Ivan Vrdoljak, Minister of Economy from 2012 to 2015 within the then Social Democratic government and childhood friend of the entrepreneur. It would be he who ensured the rise of Prvo plinarsko društvo (PPD) in the years of the liberalization of the gas market.
Vujnovac obviously denies this and on the other hand his rise did not stop when Vrdoljak moved to the opposition. Indeed, in 2016, within the new conservative government, “the number two at the Ministry of Economy became Leo Prelec, who, to take on this role, abandoned his managerial positions in three different companies of the PPD group”, as writes Petar Vidov in an article that appeared on Novosti in 2016 . Shortly before, between 2014 and 2015, PPD had lent over 500 thousand euros to the HDZ. In business, on the other hand, it is essential to know how to anticipate where the market is going.
Here today Vujnovac is among the key points of the Croatian economy. It controls the port of Ploče, the arrival point of the so-called European corridor Vc which from the Adriatic crosses Bosnia and Herzegovina and reaches Budapest. Many European loans (as well as loans from the World Bank and the European Bank for Reconstruction and Development) have contributed to developing this infrastructure axis. It arrived only at the end of 2023 just under one million euros from the European Union to make the port of Ploče the first “5G smart port” in Croatia with new automation systems.
The Vujnovac empire is also present in Rijeka, as part of the Rijeka Gateway project, declared “strategic” for Croatia by Minister Vrdoljak himself in 2014 . We are talking about a large modernization and (re)construction site for the port of Rijeka launched in 2003 and since total value of 187 million euros .
In 2021, ENNA – Vujnovac’s holding company – obtained a 50-year concession contract for the new terminal under construction at the Port of Rijeka in partnership with the Danish shipping giant Maersk. Like Ploče, Rijeka is also the arrival point of a pan-European corridor, the Vb. The European Commission has financed, among other things, the modernization of the Rijeka-Zagreb railway line (total cost of over 360 million euros) which will serve to increase the freight transport capacity arriving at the port.
A final example, perhaps the most current, is that of the regasification terminal on the island of Krk (Krk). A key project to diversify energy sources in Croatia and Europe, the regasifier inaugurated in 2021 has received important state and European funding (for a total of over 233 million euros ). After the outbreak of war in Ukraine, the government decided to increase the capacity of the facility from 2.9 to 6.1 billion cubic meters of gas per year. In the spring of last year, PPD leased all free capacities of the regasifier from 2027 to 2037 .
Until 2027, however, two Hungarian companies have rented the available capacities and they didn’t react well to the news of the PPD coup. Even in this case, Pavao Vujnovac only seems to have sensed the market in time and after having ridden the wave of Russian gas for years, he is now preparing to turn to American suppliers.
To put it with the word of Croatia’s new boss, “I don’t want to get into something tomorrow that won’t be in line with the dominant political agenda.”
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