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1 <p align="center"><b>PLIVA to reduce workforce by 608 employees by the end of
2 2000</b></p>
3 <p> PLIVA d.d. ('PLIVA') announced today that it will significantly reduce its
4 total workforce by the end of the year. </p>
5 <p>The downsizing will occur across all production sites, involving a total of
6 608 employees or 8% of PLIVA's current workforce. The layoffs will include 410
7 Croatian employees (PLIVA d.d.) by 30 June 2000, 68 Czech employees (PLIVA-
8 Lachema, Brno) by 01 June 2000, and 130 Polish employees (PLIVA Krakow) by 01
9 November 2000.</p>
10 <p> In line with existing collective agreements, PLIVA has offered the affected
11 employees severance packages upon termination of their employment contract by
12 mutual consent. </p>
13 <p>Total downsizing costs are expected to amount to HRK 68 million. With labour
14 cost savings in the second half of the year, net downsizing costs would amount
15 to HRK 46 million for the year. Further positive results of the downsizing process
16 will become clearly evident in 2001, and in subsequent years. </p>
17 <p>Zeljko Covic, PLIVA's CEO and President of the Management Board, commented:
18 "Efficient cost management requires the introduction of new technologies and
19 the optimisation of business processes. With the implementation of the SAP-R/3
20 system, changes in the supply chain and the exploitation of post acquisition
21 synergies, PLIVA is continuing its process of optimising staff numbers and job
22 structures. Equally, PLIVA recognizes the growing need for highly educated employees
23 and specialists in the pharmaceuticals field and continues to improve the company's
24 overall skill level." </p>
25 <p>For further information, please contact:</p>
26 <p> Erika Kaspar <br>
27 Vice President, Communications and Corporate Affairs <br>
28 Tel: 385 1 6120 755 <br>
29 Fax: 385 1 6114 413<br>
30 E-mail: <a href="mailto:erika.kaspar@pliva.hr">Erika.Kaspar@pliva.hr</a></p>
31 <p> Marija Mandic<br>
32 Financial Analyst<br>
33 Tel: 385 1 6160 355<br>
34 Fax: 385 1 6120 634 <br>
35 E-mail: <a href="mailto:marija.mandic@pliva.hr">Marija.Mandic@pliva.hr </a></p>

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