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FEATURE STORY May 21, 2020

"Eco Cheese PuđA": Better Accounting and Planning Helped Us Face the Pandemic!

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STORY HIGHLIGHTS

  • The impacts of COVID-19 are rippling through Bosnia and Herzegovina, restricting movement of people and affecting businesses.
  • With support from the Business Management Advisory Support Project, small and medium-sized firms are strengthening their accounting practices and business planning.
  • This has helped about 40 companies, including the Eco Cheese Puđa, better cope with the challenges brought on by the pandemic.

The impacts of COVID-19 are rippling through Bosnia and Herzegovina – restricting movement for people, shuttering restaurants, and limiting the capacity of nearly every business that depends on mobility and the ability to gather in groups. Hotels, shops, salons, and many other businesses remain dark while the country continues to grapple with the effects of social distancing and other measures designed to combat the Coronavirus.  

Tomislav Puđa, the founder and CEO of the Eco Cheese Puđa company, is among the countless small business owners feeling the economic pressures brought on by the COVID-19 pandemic.

"With COVID-19 now in BiH, and even when it was in is our neighboring countries, there has been a significant decline in sales of our products. The main reasons for this decrease are restrictive measures of movement among citizens, stalled operation of shops, plus a complete suspension of catering for hotels and bridal salons - which are the main channels for selling our products,” says Puđa.


"With COVID-19 now in Bosnia and Herzegovina, there has been a significant decline in sales of our products. "
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Tomislav Puđa
Founder and CEO, Eco Cheese Puđa

The pandemic restrictions came at a particularly challenging time for the dairy sector, as the production of milk from cows, goats, and sheep is rising at the same time that sales of cheese and other products from this milk has drastically declined.

"By analyzing the data and comparing April revenues from 2019 and 2020, we found a drop in sales of more than 50 percent. The biggest ‘X’ factor for us is lack of information about when the restrictions might end, especially for shops and restaurants, but also general restrictions on the movement of citizens,” notes Puđa.

Sales were further depressed during the Easter Holiday – traditionally a time of increased revenues – as many people traveling home from abroad experienced difficulties returning to Bosnia and Herzegovina.

Although times are tough at the moment, Tomislav is convinced that they could have been even worse had his company not worked on developing business and planning mechanisms prior to the onset of this pandemic. The company, based in the Western border town of Livno, was able to improve its accounting practices and analyze distribution and sales segments, with support from the Business Management Advisory Support Project - a pilot funded by the World Bank and the Embassy of Sweden and implemented by the consulting firm Deloitte.

The project – intended to support SMEs in the country – was implemented over the course of one year benefitting 41 SMEs. The firms received business counseling services, diagnostics through assessment of business performance and job creation potential, and coaching support in the implementation of their respective recommended mix of solutions.

These measures proved instrumental in helping the firm cope with the ongoing challenges it is now facing.

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“We analyzed all aspects of our sales and detected certain weaknesses in our system, which we began to address by purchasing Pantheon business software and changing our accounting services, with the goal of establishing appropriate sales planning and monitoring to eliminate problems. This support has certainly paid off during these difficult business circumstances, since it also allows us to do better analysis of the situation and have ‘early warning systems’ to address the challenges ahead,” says Puđa.

He emphasized that this is a crucial time for businesses, which must ensure corporate liquidity, reduce the worst impacts of the pandemic, and return to normal business activities when possible.

"In the event that the measures and restrictions are not eased, we will be forced to significantly reduce our milk purchases and adjust production to meet the decreased demand in domestic and foreign markets, which could lead to huge challenges for our primary milk producers," he said.

The company, founded in 2001, has production facilities in the foothills of the Tušnica mountain and along the banks of Lake Buško – making it an important part of the local economy, buying cow, goat, and sheep milk from local farmers for cheese production. The traditional ways of farming, with animals roaming mountain pastures in summer and feeding on hay and grain in barns in the winter, is an important part of Eco Cheese Puđa’s production.

"This provides our products with recognizable quality. All our cheeses are made from whole milk, in the traditional way, with the highest standards of hygiene and food safety, and we are proud to have certificates for ISO, HACCP and HALAL standards,” concludes Tomislav.

Although new challenges lay ahead for this local economy, the story of Eco cheese Puđa is a happy reminder that proper planning and solid business foundations can help businesses weather any economic storm – even the one brought on by an unforeseen pandemic. 

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