Business News

New Paloma Boss Counts on Tissue Maker's Brand (interview)

Sladki Vrh, 08 August (STA) - Tadej Gosak, who took over as chairman of tissue maker Paloma in the beginning of August, told the STA on Thursday that the financially troubled company's brand was the key factor on which to count when introducing changes needed to turn the company around.

Gosak highlighted as positive the increase in orders the company has received for the second half of the year, which makes part of the production capabilities almost fully booked until the end of the year.

However, internal processes will need to be optimised to improve efficiency and profitability, he said, adding that the company was also working hard on improving liquidity.

In part, Paloma is not responsible for its current trouble, since the sovereign rating downgrades resulted in some of the guarantees previously open to the company being stopped, Gosak noted.

"Paloma has a strong market and many orders," he said. "Sales are good, also taking into account all the problems on the we should be satisfied in a way. But of course our plans are more ambitious."

The company's plan for this year envisages revenues of EUR 90m and volume sales of 68,000 tonnes of tissue products.

Gosak said the plan was ambitious and although the result of the first half of the year was negative, he believes the company could come close to meeting the plans and thus close to breaking even.

Last year, Paloma generated a loss of just over EUR 1m on EUR 84m of revenue despite major efforts for climbing out of the red.

Among the measures, the new chairman said he did not wish to speak of layoffs, but he said this possibility could not be ruled out.

The majority state-owned Paloma has been listed by the government among 15 companies slated for the upcoming first round of privatisation.

Gosak, who was chosen to take the helm of Paloma by the company's supervisors in May and previously headed the Slovenian branch of the multinational Ecolab, said he had not been acquainted with any new developments in this respect, nor has he been authorised to address potential investors.

While previous attempts at finding a strategic partner for the tissue maker have failed, unofficial information shows the decision for privatisation has raised much interest.

Gosak said he was happy about such information, since Paloma deserved a good owner with fresh capital and a vision of development.

"My wish, and probably the wish of most of the employees, is for this to come as soon as possible, especially in the view of stabilisation of business," he said.

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