Finnish paints group Tikkurila is selling its loss-making operations in the Balkans. The entire share capital of its subsidiaries in Serbia and Macedonia is being transferred to local management for an undisclosed price.

Tikkurila said its Balkan operations have been unprofitable for a long time. “The market development in the Balkan area has not met our expectations. Tikkurila has a strong focus on premium products, the demand of which has not developed as well as hoped in Serbia and the countries near-by,” said Jukka Havia, interim president and CEO. The company added that the divestment is part of a more extensive program to boost its profitability and competitiveness.

The combined revenue of the two companies being sold was around €13 million in 2016, with the number of employees totaling 130. The transaction is expected to close during the first quarter, subject to the fulfillment of agreed preconditions. The new owners will continue to distribute Tikkurila-branded products in the region.

Tikkurila entered the Balkans in 2011 by acquiring the business operations of Serbian paint company Zorka Color. In addition to Serbia, the company also operates in Macedonia, Bosnia and Herzegovina, Montenegro, Croatia and Kosovo.