The Czech magnate and finance minister Andrej Babiš is set to invest around CZK 1 billion in food companies in Poland, despite the fact that he has had bad experiences doing business with Poles in the past, Hospodářské noviny reported on Thursday.
In recent years Mr. Babiš, who heads the ANO party, has sharply criticised the standards of cheap Polish food imports to the Czech Republic. Such products are a strong competitor for the wares of the producers that come under his concern Agrofert.
Hospodářské noviny said the billionaire businessman had set his sights on the health food sector in Poland, with Mr. Babiš spending a figure estimated at close to CZK 1 billion on Good Food, a producer of rice and corn cakes.
But that will not be the end of his Polish acquisitions, the newspaper wrote. The tycoon’s people are now spending around CZK 100 million on adding new production lines to Good Food’s plant in Poznan.
In the next two years they plan to invest about twice that amount again in Good Foods, which expects revenue growth of around a quarter in 2015.
But the Babiš traffic is not all one way. Good Food’s products are already on sale in in the Kaufland chain here in the Czech Republic and joint projects between the company and Penam (which is the largest bakery in the country and is also owned by Agrofert) are being discussed, Mr. Janov told Hospodářské noviny.
Mr. Janov said Mr. Babiš’s interest in Poland could well see him investing hundreds of thousands more crowns on further acquisitions – again in the health foods sector – in the far larger neighbouring state.
Mr. Babiš’s investment in Good Food makes it less likely that it will purchase the major Czech foodstuffs producer Hamé, Hospodářské noviny said.
Its Islandic-Lithuanian owners have been trying to offload Hamé for over a year, partly because the firm’s expansion to Russia and Ukraine has proven a bad bet.
The newspaper Lidové noviny (also the property of Mr. Babiš) reported last week that the Chinese group CEFC had its sights on Hamé and could purchase the company for around CZK 4.5 billion.
Mr. Babiš’s interest in Poland is linked to his 2013 hiring of Mr. Janov. The former had done little business in the country but the latter had considerable experience there as an investment manager with Penta.
Andrej Babiš got his fingers burned dealing with Poles in the early 2000s. He privatised Czech company Unipetrol in 2001 for around CZK 12 billion but then returned it to the state saying it was over-priced.
In a second sale it was bought by Poland’s PKN Orlen for CZK 15 billion. Babiš helped the company, he said in exchange for the promise of daughter companies – which he never received.
His Agrofert filed four law suits against PKN Orlen, winning one when PKN had to pay a fine of CZK 2.5 billion. However, Mr. Babiš had been seeking a lot more – over CZK 20 billion – from the Polish oil-refining company.