Jadranska Plovidba Spearheads Privitization Drive in Yugoslav Shipping

As the shackles of state control are lifted from industry in Eastern Europe, the move towards privatization is gathering momentum. In Yugoslavia, the process has been given further impetus by a state edict, which has decreed that all companies are to have a substantial element of private ownership by the middle of 1992. Among the front runners in the transition to private investment is Jadranska Slobodna Plovidba (JSP) of Split, which has some radical plans on the drawing board, including the formation of four privately owned joint ventures. Each one will be registered overseas and will take over responsibility for a specific part of the JSP business.

The ambitious privatization scheme is the culmination of a radical restructuring program implemented over the past year, aimed at resolving serious financial problems. Last year, the Yugoslav government removed the national operating subsidy, based on 10% of turnover. Partly as a consequence, JSP lost $20m, and it became evident that the company could face further difficulties without state support. In order to ensure its continued survival, Miksa Giovanelli was drafted in as managing director to revamp the company, and more commercially orientated managers were appointed to replace the old guard. Significantly Giovanelli, despite his Italian name, is actually Croatian, as are all the other managers in the company. The commercial management has been introduced on an elected basis, with Mr. Giovanelli being given some four years to sort out the company’s problems.

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