Announcement of the BoD of the company 13.Jul-Plantaže

Plantaže – Prompt Response to Covid-19 Pandemic 

Besides the members of the Board of Directors, the executive director and the members of the Management as well as the employees who are at the head of  certain operations in the company or have an important part in their performances, took part at the meeting of the Board of Directors of the joint-stock  company 13.Jul-Plantaže A.D., presided over by prof.dr Veselin Vukotić,chairman of the Board of Directors.

In the first part of the meeting, attended by the members of Board of Directors : prof.dr Božo Mihailović (Investment Development Fund – IRF), Dušan Perović (Pension and Disability Insurance Fund- PIO), Anica Hajduković (representative of minority shareholders), MA Sead Šahman (Employment Agency of Montenegro), Samo Jovićević (Podgorička banka CKB) and executive director Verica Maraš, the Report on the Realisation of the Management Contract, submitted by the executive director, was considered.This report for 2019 , adopted unanimously, stated that the presented positive result has been achieved in spite of numerous obstacles in the operation of the company, mentioning that the harvest last year was one of the hardest in the history of the company, primarily for extremely unfavourable weather conditions. Some specific issues related to the company operation were also stated. 

The Management Contract is the contract between the Board of Directors and the executive director. All rights and obligations related to running of the company by the executive director have been defined in the Management Contract. Therefore, the executive director has been given full authority by the BoD and the Management Contract to work on the implementation of the adopted business strategy and is completely responsible for its realisation. It is one of the first Management contracts , made in the companies in Montenegro and it is a usual practice in the companies , operating on the global market, such as Plantaže. Management Contract has been realised for several years and prolonged every year if the executive director has fulfilled the obligations, provided by this Contract. Management Contract is extended on the base of the results, achieved in previous year and these results have been evaluated on the base of: (a) structural-organizational changes in the company and (b) four quantitative indicators of operation which the executive director should achieve in the business year.

Due to the economic crisis, caused by Covid-19 pandemic and expected results in this year, BoD has brought a decision to reduce the salary of the executive director for 2020 from 8 to 4 average monthly salaries in the company.

The members of BoD receive compensation, stipulated by Law. Chairman of the BoD receives the compensation up to one average salary in the company and members of the Board receive the compensations up to 70% of one average salary in the company.By Law, chairman of the BoD received €728 monthly, on average  last year and members of BoD received €528. We mention that the Chairman and members of BoD have not been in the full time working relation with Plantaže.

In the second part of the meeting, in extended composition, Board of Directors, together with the Management and other employees, performing relevant operations in the company, analysed the new situation, caused by Covid-19 pandemic and considered simultaneously introduction of measures which will contribute to giving an adequate response to the current business challenges and risks. The focus of the discussion was on the creative overcoming of problems, new ideas and new opportunities. The essential issue was how to provide the survival of the company through its development. 

It was stated that the company will have to face huge and real difficulties in its operation equal to economic inferno, considering particularly anticipated crisis trend of the world economy, comparable to the crisis  in 1929. 

According to its law position, Board of Directors has evaluated the situation and given the following recommendations:

• Board of Directors has positively evaluated the agreement between the Management and Trade Union of the company regarding the reduction of the calculated value of the point at this moment for 30%, paying a particular attention to the employees with the lowest salaries in the company, ie to those with the salaries below € 500, mentioning that the salaries shall be calculated exclusively on the basis of the incomes, that the company will achieve on the sales market during 2020. 
• Board of Directors has also considered that the settlement of total obligations regarding the tax and contributions, realised in the first months of this year (until pandemic) and entry of Plantaže to the ’white list’ of Tax Administration of Montenegro are an important basis for further successful business operations of the company on which it based its business plan in 2020.
• Board of Directors considers as a very favourable fact that the company planned production chain will be performed without any problem, continuously, thanks to the intermediate goods, provided duly by the management of the company.
• Board of Directors has considered that the the vineyards and peach plantations on the company property, covering all 2.500 ha are in extremely good and proper condition. Each grapevine of 10 million vines is tied and each vine has been cultivated. Protective measures have been implemented and all is ready for the next stage for which it shall be necessary for the engagement of the additional  labour force. It shows power and health of this company. 
• The employees of the company, working full time in the company and engaged in other tasks, as well , performed the current tasks in Plantaže vineyard, adhering to the measures, prescribed by National Coordination Body, by which they showed co-operation, built corporate culture and care for further successful development of the company. In that sense, solving the lack of the labour force in the vineyards shall be done, among other solutions, by an adequate engagement of full time employed who will spend a part of their working time in the vineyard and it is also their working obligation in the conditions of actual crisis. 

Regarding it, the Board has given the recommendation that the company, in co-operation with the Employment Agency as well as with the student organisations, anounces the public call for the engagement of the labour force, necessary for performing harvest and other working operations on Plantaže vineyards. 

• Board has recommended to the Management to pay a particular attention to preserving existing markets and finding the new ones, because the crisis will influence considerably, depending on its duration, on the reduction of revenues. The need to accelerate the negotiations with the business partners from China has been particularly pointed out as well as to try to realise the agreement, reached before pandemic in China regarding the sales of the products of the company in the amount of 2 to 3 million euros. The actual negotiations are hard, but we have to be persistent. It is also necessary to work on the intitiated activities of opening the Russian market which has been closed lately for the products from Montenegro  due to well -known political reasons  and regarding the anticipated annual revenue of 3-4 million euros, jeopardized considerably the business operation of Plantaže. 
• Plantaže is the company, dealing at the global market and about 90% of the annual production has been purchased by foreigners. Foreigners are either purchasers as any tourists in Montenegro or as a buyer-consumer in other 43 countries of the world in which Plantaže wines have been sold.  Dependence of Plantaže by the tourist industry has been huge. 

Plantaže wine has a status of one of the most important products from Montenegro. The tourist season in Montenegro will bring a particular uncertainty because that market covers about 40% of the revenues of the company.. For this year, Plantaže has planned in the business plan, made in January this year, the increase of the total revenues up to cc 33-34 million euros. By this crisis, such a plan has been brought into question.Unfortunately, it is likely that it will not be reached in 2020, at least. That is why the challenges have been great for the company to cope with. … First of all, it is necessary to reduce total costs and adjust them to the level of the revenues by making special arrangements with the banks, namely, looking together for the solutions with our business banks.

• Despite all difficulties which we cannot all anticipate, the Company can survive in the long term period only through development.Board of Directors insists on this business philosophy: ’ Survival through development’! In that sense, BoD has recommended to the Management to accelerate the process of launching the new products as well as to work urgently on the investment in new business, ie diversification of the products and services of the company in order to reduce the risks, first of all from anticipated, further pandemics and disasters . It is related particularly to the food business, new types of fruit, wine tourism business as well as networking into global food chains and distributors. The investments should be made intensely into further development of olive growing and increase the number of olive plants from actual cc 15.000 to cc 30.000 plants in the next decade. 
• The development funds – development loans, not only by the Government of Montenegro, but also by EU, European  Bank for Development, World Bank have been announced. The private investors from all over the world have also announced the funds. Board of Directors has recommended particularly to accelerate the work on the preparation of the initial business ideas, ie projects, so that the company could be ready to react fast to the potential offer of the new development projects. It relates particularly to the projects covering the fields of: energy, ecology, new fruit plantations, food….
• The current crisis of the Montenegrin economy, due to general ,global crisis, caused by the pandemic, has imposed the urgent issue to Plantaže, as well, how the available resources could be exploited. Besides the power of the size of the company and its global ranking, one of the important resources is its land. The Board of Directors has given the recommendation to the Management to define, in the shortest time possible,the legal framework of the so called company-private partnership in accordance witht he laws of the State of Montenegro, for establishing new business, specially start-ups. 
• The investments have been made for many years in the company Plantaže, in the development of scientific-research activities within the Development Dept. (’Institute’) and company Plantaže has a status of scientific-research organisation in the classification of the Ministry of Science of Montenegro. It is one of rare companies with such a status in Montenegro which gives it a possibility to take part in the international, scientific reasearch. Research, made so far ( of the new varieties of the grapevine, rayonization of viticulture in Montenegro, influence of climatic changes on the future of viticulture in Monteengro and similar) prove seriousness and responsibility of the company Plantaže regarding future development.  By that policy, Plantaže takes part not only in the national projects but also in the cross-border projects, EU projects as well as rare participant in the project Horizon 2020. The objective of all projects is the increase of technological and organisational capacities of the company, starting from the Israel experience that agriculture, science and technology cover 90% and 10% is other.
• By the initiative of BoD, the project ’Digital Transformation of the Company Plantaže’  began 6 months agoand Plantaže is one of the first companies in Montenegro that started the digital transformation of whole business model of the company.Board of Directors leads this project and it is in charge of it.It is the project which will follow both the vision and mission of Plantaže. It demands the investment into education by all employed, from the Management to the vineyard worker. 
• This is one of the first announcements for public by the Board of Directors of Plantaže. We want the public to realise that the Board of Directors consists of very credible people who have serious results in their professions. We want to point out  not to affect the international market image of one of the most important and most serious companies in Montenegro, for any political reasons and political ambitions and any other non transparent intentions; not to affect the market image of the company that employs about 1.200 people and which is globally known as the brand of Montenegro. We should realise that the logic of politics and logic of business are not the same. 
• Board of Directors of Plantaže, executive director of Plantaže as well as all employed have the courage and knowledge to struggle against huge uncertainties, brought by this crisis…. The outcome is certainly uncertain… But, Plantaže is the company that was born in the struggle against the rocks of Ćemovsko polje…. The company that has been developed in the constant fight on the global market, heading to future. That is why we will keep on fighting not only for the new markets, better revenues, but also against all adversities, brought by this hard crisis time. We know that it will not be easy, at all!