EMCC European Monitoring Centre on Change

Orljava

Company/Organisation:
Orljava

Geographic Location

Country: Croatia
Region: Požeško-slavonska županija; Kontinentalna Hrvatska; Hrvatska
Location of affected unit(s): City of Pozega

Company

Sector: Manufacturing
Manufacture of textiles, apparel, leather and related products
13.92 - Manufacture of made-up textile articles, except apparel
Number Employed: 172
Group: Orljava

Employment Effects

Announcement Date: 12-08-2021
Planned Job Reductions min: 170
Planned Job Reductions max: 172
Type of Restructuring: Bankruptcy/Closure
Employment Effect Start: 09-08-2021
Foreseen End Date: 19-08-2021
Direct Dismissals: 170

Additional Information

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.