MMM Vukeliæ, a Croatian manufacturer, operates computerized production lines for parquet floors exported to Italy , Austria and other countries.
"Poduzetna Hrvatska helped me a lot with making this investment possible," said Mr. Vukeliæ. "We have the vision, the will and the product, but our problem is always the money. You can get the money, but not cheaply, and Ivan [Pilepiæ] helped us by opening the channel of fast and cheap money."
Financing for New Investment
USAID helps a small wood manufacturer secure a loan for a new investment that will employ 60 new workers and boost exports.
In late 2004, Marijan Vukeliæ, the owner of a small wood processing plant, saw an opportunity to expand his company beyond parquet floor production to veneer production in Novska, 60 miles east of Croatia 's capital city.
He had a plan to invest approximately $4 million in this venture that would create 60 new jobs, in addition to 90 existing employees. The venture would also add $2 million in total sales.
However, Mr. Vukeliæ had a problem. With interest rates on commercial loans running at 8 to 9.5 percent, he was looking at a tough road ahead for his investment to pay off and bring dividends.
USAID introduced a new financing solution. Finance experts from the Poduzetna Hrvatska project, realized that Mr. Vukeliæ was eligible for a number of government programs subsidizing interest rates for small businesses.
As a result, he was approved for a $2 million loan at a favorable two percent rate from the Croatian Bank for Reconstruction and Development (HBOR). With the refinancing of old loans, the overall savings would exceed $740,000, or 10% of annual sales.
The new plant is under construction and Mr. Vukeliæ expects to start production by the end of October. Small companies like this one will help Croatia compete in global markets and generate new jobs.
Story provided by: DAI/Nathan
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