Up to 110 jobs will be created next year at a new leather shoes department at leading Croatian footwear maker and retail chain Borovo, the company announced on Thursday.

The firm, based in the eastern town of Vukovar, said it expects the new unit to produce up to 700,000 pairs of shoes a year by 2005, when it hopes to have taken on another 300 employees.

The company's factories suffered major damage during the 1991-1995 war in the Balkans and now employs only 1,300 people compared to the 26,000 before the war broke out.

Meanwhile, local textile company Vuteks, has been declared bankrupt due to debts totalling $4.5 million debt and all of its 500 employees laid off.