Foreign trade From January to November 2009, Croatian exports stood at $9.5 billion, and imports at $19.4 billion
Gas prices rise Nobody is completely satisfied with the result, which tells us we are heading in the right direction
Ivan Ergović, Board President, Nexe Group According to our 2010 plan, we anticipate a 5%-10% increase in some areas
CROATIAN TRADE
ENERGY
INTERVIEW
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Croatian Business & Finance Weekly Established in 1953 Monday / 18th January / 2010 Year III / No 0093 www.privredni.hr
S U P P O R T E D
B Y
pvinternational pv international T H E
C R O A T I A N
C H A M B E R
O F
E C O N O M Y
GOVERNMENT DECISION
The economy needs a boost of €1.36 billion Projects will be protected under a business but not a political umbrella, promised vice-president Šuker Vesna Antonić
“W
e will faithfully fight for every job and support every company with a chance of survival. Using measures for economic development and recovery, the government intends to create the prerequisites for overcoming the effects of the global
In co-operation with private capital, the state will establish funds for economic co-operation, which will invest in the ownership structure of the company crisis on the Croatian economy and for enabling long-term sustainable economic growth. The state will actively subsidise credit for entrepreneurs with the goal of increasing liquidity and strengthening the business sector, which will result in a rise in economic activity, and consequently economic growth. These measures are a framework for deals which I believe, we will successfully complete this year.” Most of them will start at the end of January or the beginning of February, pointed out Prime Minister
Jadranka Kosor during a recent session of the government where two decisions were adopted that are supposed to boost economic recovery. Two models and lower interest rates There are two models of state active participation in aiding companies. They are based on a working partnership between the government, the Croatian National Bank (HNB), the Croatian Bank for Reconstruction and Development (HBOR) and other business banks. As the government Vice-President and the Minister of Finance Ivan Šuker said, last year the government created the conditions for the state to obtain favourable HUP: We welcome the measures, even though they are a drop in the ocean The President of the Croatian Employers’ Agency (HUP), Damir Kuštrak, welcomed the government measures, even though he evaluated them as merely a drop in the ocean of what should be done. HUP did not participate in the measures taken by the government, but it does regard them as a good, proactive policy move, even though their real effect can be discussed only when the exact criteria for implementation are known. The unofficially announced 7% interest rate on new loans from the Croatian Bank for Reconstruction and Development, Kuštrak evaluated as extremely high, at least 3% higher from the rate for similar Eurozone projects. The economy needs additional unburdening precisely because interest rates are so high in Croatia, if not for the cost of capital, than at least on taxes and contributions, pointed out Kuštrak.
loans abroad in order to finance its current obligations. Therefore, Croatian bank liquidity currently exceeds €0.54 billion, whilst HNB is prepared to release part of the reserves, some €1.37 billion. In collaboration with HBOR, these funds would be offered to the Croatian economy under more favourable conditions. The measures are harmonised with EU regulations, and they refer only to those companies that, at the beginning of the crisis (30th July 2008) were not in difficulty, said Šuker. No political umbrella Furthermore, in co-operation with private capital, the state will establish funds for economic cooperation, which will invest in the ownership structure of the company. The government will match every kuna (up to €0.14 billion) of private capital (investment funds and risk capital funds). The funds would remain within these companies for five years, after which they would be withdrawn from the ownership structure. Projects will be protected under a business but not a political umbrella. “Politics cannot determine who will get loans, and we also ask the business banks do not to solve their own dubious lending through these models,” stressed Šuker.
2 VIEWPOINT
Privredni vjesnik Year III No 0093
Leo Petrov, Combis Board Member
SOCIAL RESPONSIBILITY IS NOT JUST A PHRASE BUT A NECESSITY Despite the current economic conditions, every company should contribute to its utmost
S
ocially responsible business is an oft-exploited subject. All companies would like to be perceived and regarded as socially responsible, but the question is who really deserves this title. Many believe their donations and sponsorships directly link them to a degree of social responsibility. However, this is only a small aspect of what the term fully implies. Some companies, for example, make donations and grant sponsorships, yet at the same time are not in balance with the community in which they are active. On the other hand, there are companies that pay full attention to employee satisfaction. They try to have good relationships with their clients, customers and competition, but do not make donations to the community. Who is the more socially responsible? It is difficult to consider social responsibility through only one aspect of a company or an organisation. We in Combis start from a discourse based on the systematic development and enhancement of socially responsiIMPRESSUM: Privredni vjesnik Kačićeva 9 10000 Zagreb +385 1 5600020 uprava@privredni.hr www.privredni-vjesnik. hr/subscription
ble practices. We know nothing can be achieved overnight, and that positive changes should be made with careful consideration, within possibilities, and yet continuously, regardless of economic conditions and problems with which we are faced. Moreover, there is never an ideal moment for socially responsible business, since sustainable development is not a train we can jump on and off whenever we choose. It is quite the opposite in fact. Social responsibility, as a precondition for sustainable development is a priority today. Therefore, Combis is considering a strategy of investing in socially responsible long-term business, as the original theory of socially responsible business and sustainable development is deeply rooted in our fundamental values. We have always recognised the value of our employees and are systematically working on developing our relationships with users, partners and the community within which we are active. We have invested 1% of our profits last year in donations and sponsorships through the tender ‘Reliable Support’. In order to be more transparent, we defined terms and criteria according to which we considered each of the 635 applications received for donations and sponsorship. These examples also show there is room for socially responsible business in the current economic conditions, and our goal is to continue our good practices during the forthcoming period, whatever the circumstances.
FOR PUBLISHER Nikola Baučić +385 1 4846661 uprava@privredni.hr
IMC MANAGER Dea Olup +385 1 5600028 olup@privredni.hr
EDITOR IN CHIEF Darko Buković +385 1 5600003 bukovic@privredni.hr
TRANSLATION Tr@duco traduco@zg.t-com.hr
EXECUTIVE EDITORS Andrea Marić maric@privredni.hr Vesna Antonić antonic@privredni.hr
COUNSELLOR, INTERNATIONAL OPERATIONS, LANGUAGE EDITOR Ray Fletcher fletcher@privredni.hr
(
% reduction in imports from the EU
FOREIGN TRADE
The crisis impac From January to November 2009, Croatian exports Igor Vukić
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he economic crisis brought Croatia at least one positive result. Its foreign trade deficit has decreased by 30% over 2009. During an eleven month period of 2009, the export/import ratio stood at 49.1%, which is three percentage points higher than at the end of 2008. However, this is a Pyrrhic victory. The positive movements mostly resulted from the crisis peak in 2009 that influenced the weakening of economic activities in Croatia and other countries with which it traditionally trades. During this period, Croatian exports also plummeted, by some 21.8%, whilst imports decreased by some 26%.
In the third quarter the total fall in exports amounted to 30.7%, but when ships and oil are stripped out, the deficit was 20.1% According to data provided by the Central Bureau for Statistics, total Croatian exports from January to November were valued at €6.93 billion, whilst imports stood at almost €14.11 billion. The foreign trade deficit, expressed in US dollars, was $9.8 billion . A positive February In euro terms, exports amounted to €6.9 billion, and imports €14.11 billion, whilst the deficit totalled €7.1 billion. The value of exports from Croatia exceeded €0.68 billion only in February. The highest export/import ratio (59.5%) was recorded in February 2009. In that month, exports totalled €0.74 billion and imports €1.23 billion. Imports were al-
most €0.41 billion lower than the year before. According to the Centre for Macro-economic analysis at the Croatian Chamber of Economy, the fall-off in exports was mostly influenced by the decreased export of ships and oil derivatives, as well as metallic ores, metal waste and other metal products. The drop in exports is softened when oil, oil derivatives and ships are deducted. As is pointed out by analysts at the Croatian National Bank, the total fall in exports amounted to 30.7% in the third quarter, although the deficit totalled 20.1%, excluding ships and oil. A drop was also recorded in statistical analyses of most sectors. Those which increased their exports related to grain and related products, especially wheat and corn, which was limited by export duties in 2008. Fish and fish products were also positive, where the export of cured and salted fish to Italy and Albania increased. Food exports increase An increase in the export of sugar and sugar products influ-
www.privredni.hr Business & Finance Weekly
3
( from HRK39 billion down to HRK30 billion exports to the EU during 11 months of 2009
cts the import/export balance stood at $9.5 billion, and imports at $19.4 billion. The foreign trade deficit reached $9.8 billion Austria crashed from €0.51 billion to €0.37 billion. Exports to CEFTA countries also decreased, resulting in 34% fewer exports to B&H. The value of exports dropped from €1.35 billion to €0.89 billion. Exports to Serbia decreased from €0.47 billion to €0.36 billion. Imports from CEFTA countries also decreased and it is here where Croatia still registers a foreign trade sur-
Significant fall registered in the import of motor vehicles from €1.64 billion in 2008, to some €0.8 billion in 2009 enced positive export results to the EU and Bosnia and Herzegovina. Exports of food and live animals increased by 9.7%, from €0.60 billion to €0.67 billion in 2009. According to data provided by the Central Bureau for Statistics, during eleven months of 2009, total exports from the processing industry decreased from €7.94 billion to €6.16 billion, some 23%. Within these figures, the export of food products remained relatively stable, totalling €0.51 billion, 4% lower than in the same period of 2008. The export of beverages at €87.94 million, decreased by 3%, whilst the export of tobacco products at €56.57 million, decreased by 5.8%. Amendments to the tax laws relating to tobacco products, which were passed due to harmonisation with EU regulations, encouraged greater imports of tobacco products. In this category, €25.34 million of goods were imported during the eleven months of 2009. In the same period of 2008 their value stood at €18.63 million. This is
a 35% increase in their import. The import of pharmaceutical products is doubly higher than exports. In 2009, trade grew from €0.49 billion to €0.52 billion. The export of chemicals suffered dramatically, plummeting by some 25%, primarily due to the export of chemical fertilisers tanking by 50%. Rather than €0.19 billion in exports, fertilisers accounted for just €106.8 million. Taken with decreased exports of plastic matters in primary forms, this decreased total exports from €0.86 billion to €0.66 billion. The value of ships exported decreased from €1.15 billion to €0.61 billion, but ship imports also decreased. HGK explains this relates to the import of ships for reprocessing. A serious fall was registered in the import of motor vehicles; from a figure of €1.64 billion in 2008, last year only €0.81 billion of vehicles were imported. The total drop is just under 50%. Fewer vehicles, a drop in consumer spending and an overall weakening of economic activity resulted in de-
creased consumption, particularly the import of crude oil, derivatives and metal. HNB analysts add that the drop in the import of capital goods (machines and transport) is on-going. In the third quarter such imports decreased by a quarter in relation to 2008. Imports of meat and meat products increased. For example, the export of frozen pork from Chile and the Netherlands was far higher. Slower pace EU countries account for some 60% of Croatian exports, and it is here that the greatest fall in exports and imports have been recorded. Exports to the EU dropped from €5.34 billion to €4.10 billion during eleven months. Exports to Italy, the main foreign trading partner, decreased by 19.5%, from €1.66 billion to €1.34 billion. Some €0.77 billion of goods were exported to Germany, compared with €0.93 billion in 2008, a drop of 27.8%. Exports to Slovenia decreased from €0.67 billion to €0.51 billion, and exports to
plus (€1.48 billion of exports over €0.69 billion of imports). Croatian companies saw a rise in exports to Asian countries; from €0.44 billion in 2008, exports increased to €0.47 billion (6.7%). However the overall deficit was high. Notwithstanding a decrease of €2.33 billion in 2008, €2.01 billion of goods were imported from Asia last year. However, the fall in imports from the EU was greater than the fall in Croatian exports. Some 27.6% less goods by value arrived from the EU. 2009 imports from Italy were valued at €2.16 billion, compared with €3.26 billion in the same period of the previous year. Imports from Germany dropped at a slower rate of 24.5% compared with the overall EU rate, amounting to €1.92 billion, with Slovenian and Austrian imports decreasing at similar rates, 23.8% and 23.1% respectively. All this has influenced the reduction in last year’s foreign trade deficit. Nevertheless the export/import ratio is still on extremely thin ice.
4 ::: news Fall in the consumer price index In relation to November 2009, the prices of goods and services for personal consumption, measured by the consumer price index, were 0.6% lower than in December 2009. They were 1.9% higher year-on-year, and the annual average is 2.4% higher. Regarding consumer intentions, in relation to November 2009, the drop in consumer prices in December was mostly as a result of the prices of clothes and footwear, 7.2% lower (seasonal sales), furniture and equipment for houses and regular maintenance (0.8% lower), traffic (0.6% lower due to a price reduction of cars and petrol) and telecommunications, which are on average 0.1% lower, according to data published by the Central Bureau for Statistics. Nexus Alpha invests in Aqua Maritime At the end of 2009, Nexus Alpha invested additional capital in Aqua Maritime, which designs and offers a product line intended mostly for tourists. The main idea behind Aqua’s concept is to offer tourists quality practical items of Croatian design. The products are sold through a network of stores or franchises at 39 popular Aqua locations in Croatia, the wider Mediterranean, and in Australia and the Republic of South Africa. Additional capitalisation for HPB According to an announcement and plans for a gradual increase and strengthening of the capital base of the Croatian Postal Bank (HPB), the Croatian Institute for Pension Insurance together with the Fund for financing the decomposition and management of radioactive waste and spent nuclear fuel of the Krško nuclear energy plant, invested €13.69 million of additional capital in HBP in the form of hybrid deposits at the end of last year. This investment guarantees the level of capital required for rendering all reserves in accordance with the Bank’s risk profile. It also creates the preconditions for a steady and stable start to 2010, according to the Office for Corporate Communications in HPB.
Privredni vjesnik Year III No 0093
Gas prices rise
EVERY THREE MONTHS WILL SEE NEW NEGOTIATIONS ON GAS PRICES We note that no one is completely satisfied with the result, which tells us we are heading in the right direction, evaluates the State Secretary for Industry, Ruđer Friganović
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During the next three months the price of gas for end-users will range between €0.37 and €0.41 per cubic metre, depending on the distributor, an increase of some 20%
prices for companies of €0.25 per cubic metre. With the addition of VAT and other additions, the price for end-users could increase by 30%. Representatives from the Ministry of Economy used their influence by agreeing with all interested parties on a basic gas price of €0.23. “We note that no one is completely satisfied with the result, which tells us we are heading in the right direction”, evaluates Friganović In future, prices will be negotiated every three months. During the next three months the price of gas for end-users will range between €0.37 and €0.41 per cubic metre, depending on the distributor, an increase of some 20%.
direction to government policy on energy resources. The move towards a stronger impact from the market will be gradual, adds Friganović, and the Ministry of Economy will act as a mediator between suppliers and consumers, in order to mitigate the effects of high prices. Recently the idea was put into practice. Ina, (or rather its natural gas company Prirodni plin), set new basic gas
Minimally more expensive for entrepreneurs The new prices relate to 13% of total consumption in Croatia, (or rather those companies that pay for the gas by payment order). This impacts on a wide crosssection of entrepreneurs, from law offices and restaurants to industrial manufacturers. The basic gas price for them will be marginally higher than that supplied to households; however,
e need get used to the fact that gas is a market good, and its price should be determined by the market. This is the announcement made last week according to which the new State Secretary for Industry, Ruđer Friganović gave a new
for entrepreneurs there are no subsidies similar to those which the government provides to poorer households. According to Vladimir Ivković, president of the Association of Gas Distributors at the Croatian Chamber of Economy, there is no reason for the price of gas to entrepreneurs to be much higher than that for private individuals. He did mention that there are various solutions for individual distributing areas. Some local authorities in co-operation with distributors (which they mostly own) determine new prices for entrepreneurs in order to encourage them, whilst others are more oriented towards private individuals. A single, unique solution does not exist in the EU, says Ivković. Last week’s agreement does not regard high consumers, for example Petrokemija, HEP and others, which purchase gas directly from Ina. In their cases, formulae have been previously discussed concerning a gradual movement towards market levels. “We need to become aware of the fact that we cannot base our development on an unrealistically low energy price”, concludes Friganović. (I.V.)
www.privredni.hr Business & Finance Weekly
INTERVIEW 5
IVAN ERGOVIĆ, BOARD PRESIDENT, NEXE GROUP
BUSINESS IS MOST DIFFICULT IN BOSNIA AND HERZEGOVINA According to our 2010 plan, reducing revenues will halt whilst we anticipate a 5%-10% increase in certain business areas Our business projections over the medium-term include the expansion of our network of concrete manufacturers. In Serbia, we are expecting a rise in the sales of stone and aggregates due to the construction of Corridor X. Therefore we see a possible increase in the sales of stone from Jelen Dol. New investment is in progress regarding our factory for lime and stone aggregates in Jelen Dol in Serbia, worth almost €12 million. The capacity of the furnace will be some 350 tonnes of burnt lime, which is around 125,000 tonnes per year. With this investment, Jelen Dol will become the leading producer of lime.
Boris Odorčić
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he Nexe Group from Našice is one of the leading producers of construction material in the region. It consists of a structure of 29 companies in Croatia, Bosnia and Herzegovina and Serbia, and includes production facilities in Kenya, Pakistan and Uganda. Ivan Ergović, Board President of Nexe Group, says the company’s business has been made difficult in all countries hit by the crisis.
How do you evaluate local business during the current crisis? We have felt the influence of the crisis, but it has varied in all segments. The most significant problems emerged in the sales of bricks, stone aggregates and tim-
A cement factory in Russia is in progress ber. In addition, unpaid claims for delivered goods represent a huge burden on the business. What about Serbia and Bosnia and Herzegovina? If we compare the business, it would be the most difficult in
Bosnia and Herzegovina. The market there has undergone the greatest decline. There are no infrastructure projects and the consequence of this most certainly reflects the lack of projects in which our member company for low-rise construction GP Put
Sarajevo could have participated. On the other hand, Serbia has better prospects for fighting the crisis and we believe it will exit the crisis faster. In general, we think we have good prospects for strengthening our business in both countries.
Will you invest in any other parts of the world? We are constructing a cement factory in Russia. We are currently making inquiries with our Russian partner for obtaining a new exploitation licence. In roughly a year, we will have a clearer picture of the direction of this project. Do you plan to expand further in the local market? According to our 2010 plan, reducing revenues will halt whilst we anticipate a 5%-10% increase in certain business areas.
What is the purpose of tenders? In June 2009, a Law on Mining was passed, which is harmonised with the Law on Concessions. People in the business of mineral extraction suggest they are in a more difficult situation than before. There are considerable objections to the Law on Mining that has been passed. Firstly, the deadline of six moths during which concessionaires need to resolve their legal property relations is extremely short. For many entrepreneurs this deadline is not realistic, since the concession can be taken away as a sanction. In addition to an unregulated situation within the land re-
gistry, a greater problem concerns state bodies that solve such cases. The Central Administration for State Owned Asset Disposal, which solves most of them, is overloaded, whilst the government committee, which has the final word, has not had a meeting for several months. High fees for leasing state-owned land, provided by the concession, are also a problem. For example, the price for leasing land that we use for extracting gravel and brick clay amounts to €4.10 per square metre, whilst the market price of the same land is less than half that figure. In addition, the procedure for tender invitations for the
concession is not clear. The law prescribes that when you apply for a concession you have to have evidence of resolved legal property relations. We then ask ourselves what is the purpose of the tender when this evidence can only be submitted by one applicant. The same land cannot be owned simultaneously by more than one company, nor can they own a concluded contract on servitude for the same land. This means that only one bidder with resolved legal property relations can apply for the tender. There can only be one such bidder. Therefore, I repeat, what is the purpose of the tender?
6
Privredni vjesnik Year III No 0093
CROATIAN FOREIGN CURRENCY MARKET Currency
Kuna exchange mid-rate
AUD CAD JPY CHF GBP USD EUR
4,684611 4,931853 5,583137 4,934524 8,245233 5,065174 7,288786
Source: HNB
EUR
HPB extends personal lending The Croatian Post Bank (HPB) has expanded its personal lending. It now offers an all-purpose loan for closing all existing obligations, in addition to regular all-purpose loans. Loans for closing existing obligations will be issued in kuna with a currency clause tied to the euro. Clients may request a loan of between €1,500 and €50,000, of which up to 10% of the sum can be issued in cash, without any documented purpose. The deadline for repayment, depending on the sum, ranges between 12 and 180 months, with a possible grace period of 3 months. The interest rate will be 10.99% (12.08% of EIR), according to the Office for Corporate Communications of HPB. Hospitalija trgovina successfully refinances bonds The company Hospitalija trgovina successfully arranged with its investors a long-term bond refinancing from 5th October 2009. The long-term refinancing was achieved by issuing a tranche of commercial bills on 23rd December 2009 for €7.715 million due 23rd March, which is also the date for issuing 7-year bonds which will refinance this commercial bill. This move should continue the company’s successful business record, as it achieved the highest level of profitability in its history during 2009. Moreover, this importer and distributor of medical equipment, including equipment for orthopaedics, cardiology, diagnostics, microbiology, haemodialysis, enteral and parenteral nutrition, consumables and chemicals, preliminary concluded 2009 with €12.46 million in income and €1.46 million in operating profit, representing an EBITDA of 11.7%.
USD
5.08
12.1.
13.1.
14.1.
15.1
CHF
4.96
7.30
5.06
4.95
7.29
5.04
4.94
7.28
5.02
4.93
7.27
5.00
4.92
7.26 11.1.
WEEK ENDED JANUARY 15, 2010
::: news
7.31
4.98 11.1.
12.1.
13.1.
14.1.
15.1
4.90 11.1.
12.1.
13.1.
14.1.
15.1
INSURANCE IN 2009
€1.3 billion achieved premium Gross written premiums for non-life insurance down 2.9% over 2008 and by 2% for life-insurance
Vesna Antonić
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ast year, according to cumulative data from the Croatian Office for Insurance (HUO), the 27 Croatian Insurance Agencies achieved gross written premiums totalling €1.3 billion, some 2.7% less than in 2008. Gross written premiums for non-life insurance reached €0.94 billion (2.9% less than in 2008), which is 73.55% of total premiums (73.73% in 2008). The most popular policy is insurance for the responsibility for the use of motor vehicles, where gross written premiums stand at €0.4 billion. Gross written premiums for this type of insurance remained at the same level last year, as well as the year before, having a
42.21% share in non-life insurance premiums, and 31.05% of the total calculated premiums. Premiums covering mandatory insurance against automobile responsibility reached €0.39 billion, the same as two years ago. It should be noted that the number of contracted insurance policies declined by 38,307 or 1.9%, resulting in an increase of average premiums from €199 to €203. Life-insurance Life insurance dropped by 2% last year, with gross written premiums of €0.34 billion, a 26.45% share of total premiums (26.27% in 2008). The number of insurance policies remained at the same level as the year before. According to structure, classic life insurance
gained the biggest share, with premiums of €0.29 billion (the same as two years ago). The share of non-life insurance was 86.14%, and of total premiums 22.78%. Last year, annuity insurance achieved written premiums totalling €1.08 million, some 7% less than the year before. Regarding complementary insurance with life insurance, the written premiums were 1.5% higher than in 2008, amounting to €22.465 million. Insurance covering weddings or births recorded premiums of €1.39 million during the past year, a 2% drop year-on-year. Life annuity insurance, where the insured takes on the risk of investing, achieved written premiums totalling €22.35 million in 2009, a 27.1% drop year-on-year.
www.privredni.hr Business & Finance Weekly
WE PRESENT 7
BETAFENCE HRVATSKA, ZAGREB
One-stop-shop for all fencing requirements Betafence customers are mostly construction oriented
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he owner of Betafence Hrvatska is the Belgian company Betafence, Europe’s leading producer and distributor of ready-made fencing systems. The General Manager of Betafence Hrvatska, Mario Ergović says the company, founded in 2008, specialises in the fitting and distribution of Betafence fencing systems for private houses, schools, factories, warehouses, nurseries, sports facilities and playgrounds amongst others. Ergović says their customers are primarily construction companies, and there is a growing number of investors who contact the company direct requesting Betafence Hrvatska in particularly to fit their fencing. The greatest achievement of this company, which employs five people, is the Fencing Centre, which opened last year. The idea for this centre came soon after the company opened in Croatia. The Fencing Centre is designed so that customers can see the appearance of the fitted fence. They can also receive any expert advice necessary for fence fitting. The Centre also makes technical drawings which can be used in designing and, naturally, they also sell fences. “Companies selling custom-made kitchens use a similar concept. It is interesting that Croatia is the
first country that uses such a concept in sales, and at the moment we can confirm that the opening of the Centre was an excellent opportunity. Fencing Centre will soon open in Prague and Madrid, and a second will open in Croatia in Istria”, explains Ergović. Free playgrounds for indoor football According to their estimations, the annual turnover from the fencing systems in Croatia ranges between €15 million and €17.8 million. However, Ergović says it is impossible to estimate the value of the market covering private houses, at present dominated by the DIY approach. It is their opinion that house owners will start turning towards simpler, long-lasting and, finally, more favourable solutions. They expect this market to expand by some 50% when Croatia joins the EU and accepts safety norms that clearly define perimeter fencing. The company is also preparing a plan according to which fenceowners will be able to replace their old fence with a new one, with an addition that will be calculated per kilo of old fencing. Moreover, they plan to offer free playgrounds for indoor football to various cities in Croatia, where fencing will be used for advertising. (B.O.)
MONTANA PLUS, ZAGREB
Healthy take-away meals
The highest quality ingredients are used in sandwich preparation. They are packed without food preservatives in an atmosphere which keeps them fresh
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he sandwich was made popular by an English 18th century aristocrat John Montagu, the fourth Earl of Sandwich. He liked to have a snack during playing cards, and on one particular occasion his butler served him meat placed between two slices of bread. The Earl of Sandwich liked this, since he could play cards and keep his hands clean. Legend has it this is how the sandwich was created, whilst the facts show that one of the most popular brand of such take-away meals is definitely Montana plus. Špiro Vučičić, director of Montana plus says this company was founded in 1998, and that it is actually the first Croatian producer of take-away sandwiches, as well as the only producer of sandwiches with long-lasting freshness without food preservatives. The company employs 50 people, and it is a part of the Atlantic Group, operating within its Health and Care division. Montana plus offers several categories of sandwiches within their product line. Montana triangle long-life sandwiches are the most popular and with the longest tradition on the market. They are the only such sandwiches in Croatia
and the region. In addition to nine types of Montana triangle sandwiches, great success has also been achieved through Montana classic sandwiches (six types), which have been showing an impressive growth rate since their launch two years ago. There is also the Montana mini classic sandwich, intended for sale in vending machines, says Vučičić. Sweet product line On the occasion of the 10th anniversary, Montana is launching a sweet product line. It will include two types of Montana muffins (chocolate with cherries and apples) and two kinds or pies (cherry and apple). According to Vučičić, they use the highest quality ingredients in the preparation. They are packaged without preservatives, in an atmosphere that keeps them fresh for more than 10 days. It is also important to point out the company has harmonised its production with HACCP (Hazard Analysis and Critical Control Points) and ISO standards. Their future business plan involves further development of the sweet product line and the expansion of the Montana brand on regional markets, which currently do not offer take-away sandwiches. (B.O.)
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Privredni vjesnik Year III No 0093
MARITIME PROPERTY
A common good in general chaos Maritime property is defined as a general good, property outside legal transactions, which cannot be sold or leased causing extremely complex consequences Drago Živković
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aritime property is one of the most legally complex areas, since it is treated differently by various social systems and therefore remaining disordered. In Croatia, a preliminary attempt to introduce some degree of order was made six years ago, when the Law on Maritime Property and Sea Ports was passed, subsequently undergoing two changes, mostly for “cosmetic” purposes. Next year will see a completely revised text that should be harmonised with the Law on Concessions. No compensation Maritime property is defined as a general good, property outside legal transactions, which means it cannot be sold or leased, causing extremely complicated consequences regarding coastal property, used for centuries for various purposes. The draft Bill on the Law on Maritime Property and Sea Ports has already been the subject of two public discussions. It will bring important changes regarding the definition of the border of maritime property, which should mean a transfer of jurisdiction to the State Geodetic Directorate, rather than county committees as is the current situation. The possibility for the prolongation of concessions on maritime property will be annulled, together with other concessions which will be replaced by licenses for performing activities on maritime property. Sea ports will be given the right to charge fees for accepting waste; the management of this will be in two parts: one fixed part which all incoming ships will be obliged to pay, and a second, flexible part that will depend on waste unloading. The State Attorney’s Office played an important role in drafting the Bill on the Law, suggesting a solution to possibly the most sensitive issue,
that of the right of companies formed through transformation, on the maritime property they use. It regards mainly tourist companies (hotels, campsites) which acquired maritime property through a concession during the transformation process. When a concession expires and
The possibility for the prolongation of concessions on maritime property will be annulled, together with other concessions which will be replaced by licenses the Law forbids its prolongation, operators believe the state should compensate for the investment they have made. However, the Deputy State Attorney, Snježana Frković, promotes a different view. Upon the expiry of a concession, any rights over maritime property have been finalised, investment has been amortised and the concessionaire has no right to any kind of compensation. The same prin-
ciple might well be applied to utility companies, although compensation on maritime property would be allowed for those who registered their ownership in accordance with the public administration Act, published before 1961. Snježana Frković believes this would eliminate the general legal chaos surrounding maritime property, since at present the courts make different rulings on the same issues. The State Attorney’s Office is the recipient of violent reactions from the representatives of companies using maritime property. The Board President of Ilirija from Biograd, Goran Ražnjević, compares this kind of legal solution with confiscation and nationalisation, using his hotel as an example. The Ilirija Hotel has already lost a pool in which they had invested €5 million, and over a 10 year concession, his profit has reduced by a factor of ten. Ilirija has in the region of €13.75 million of investment in maritime property, and if it does not receive compensation after the expiry of the concession, it will most certainly go bankrupt, claims Ražnjević. Hence, he is
advocating some kind of subsequent procedure, where it will be possible to estimate the value of company investment in the maritime property. Small shipyards in jeopardy This Bill might also shut down a series of small coastal shipyards, presently working without a concession on maritime property, warns the deputy mayor of Šibenik, Petar Baranović. This is the reason why he has suggested a period of transition, during which such shipyards could harmonise operations with the new law. He mentioned as an example Vinici Marine on the island of Murter, whose owner Marko Bašić, has requested the state to allow him to continue his work on maritime property, since he has been fulfilling all obligations to the state and has trained ten new shipwrights. However, Snježana Frković says that the real problem with Bašić is that he has breached at least five or six laws by in-filling the seafront to his shipyard without a licence. In many other countries an inspection would have closed this shipyard a long time ago.