The relentless Article 87 Croatia needs to create a result acceptable to the EC, and EU practice, cutting aid to shipbuilders
Mate Jujnović, owner, Promet Makarska Those who are filling the state budget are in a serious position
1.2% reduction in GDP in 2010 The first two quarters will continue to show negative growth rates with mild positive trend later
SHIPYARDS
INTERVIEW
GDP ANALYSIS
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Croatian Business & Finance Weekly Established in 1953 Monday / 1st February / 2010 Year III / No 0095 www.privredni.hr
S U P P O R T E D
::: news HGK: Entrepreneur revenues decrease by 9.1%, profits by 30.1% Over nine months of 2009, the Croatian economy, due to the financial and economic crisis, registered considerably negative financial business results compared with the same period in the previous year, according to an analysis from HGK, based on data provided by the Financial Agency. This is quite evident from a 1% decrease in employment, a 9.1% fall in entrepreneurs’ total revenue, a 7.7% drop in total expenditure, a gross profit decrease of 30.1% and investment reduction of 15.4%. Growth was registered by several entrepreneurs (4.2%), and average nett salary (3.1%), according to analysts in the Macro-Economic Analysis Centre of HGK in the latest edition of Economic movements. GfK: 90% of the general public change consumption habits due to the crisis A survey from Shopping Monitor 2009/2010, conducted by the Agency GfK Hrvatska shows that only 10% of Croatian consumers have not changed their habits during the crisis. Most have registered visible changes, mainly regarding the monitoring of prices and special promotional sales. Over 60% of consumers monitor prices, and some 50% special promotional sales. According to types of stores, consumers spend 44% of their money in supermarkets, the most popular type of stores. Compared with last year, hypermarkets registered higher growth (from 19% to 26%), and discount stores from 2% to 6%. Only small stores registered a fall, from 24% to 18%.
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RBA ANALYSIS
Economic recovery not before the second half of the year Real economic fall for 2009 could reach 6% with average inflation at 2.4%
he third quarter of 2009 was also the third consecutive quarter during which the Croatian economy registered a fall on a year-on-year basis. Consequently, real GDP reduction amounted to 5.7%, which shows the trend is slowing. As opposed to the first two quarters, GDP movement during the third quarter was negatively influenced by decreased state consumption (for the first time since the fourth quarter in 2003), whilst other components registered a milder fall during the first half of the year, partly due to the base effect. Data from the real sector and labour market point to continuing negative movements. Therefore, the economic fall for the whole year could reach 6%, according to RBA analysts. During the first half of 2010 economic activity will continue
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to reduce, especially when the climax of negative movements on the labour market are yet to happen. Foreign demand, without significant changes in the local sector, is not strong enough to support industrial recovery, or to boost the investment cycle. Positive influences, which to date have
been achieved by decreasing the import/export deficit, will slowly disappear as import/export levels begin to balance themselves, whilst the growing prices of raw materials and energy create pressure of increasing the deficit. The beginning of any recovery is anticipated during the second half of next year at the earliest. (V. A.)
Inflationary pressure continues to increase After the inflation rate as measured by the consumer price index had registered a fall in the third quarter of last year, inflation pressure slightly intensified in the fourth quarter. In addition to the base effect, a surge in the price of energy resources contributed to the majority of anticipated price rises. Inflationary pressure will possibly continue during the forthcoming period, due to higher prices for gas, which will have a knock-on effect on the fluctuation of prices of other products, specifically the price of electricity. Energy prices are still below real market prices. Therefore, during Croatia’s EU accession period over the next two years, administratively agreed prices will need to be harmonised, conclude RBA analysts.
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Privredni vjesnik Year III No 0095
Ralf Blomberg, German-Croatian Chamber of Industry and Economy
GREAT EFFORTS FOR SMALL IMPROVEMENTS Fields of interest, concerning partnerships between German and Croatian companies, include energy, environmental protection, construction and furnishing hotels ccording to regular surveys, conducted throughout the members of the German-Croatian Chamber of Industry and Economy and ongoing dialogue with company representatives, Croatia’s advantages, compared with other countries of the region include employee productivity, a qualified work force, political stability, well-developed public infrastructure and efforts invested in the EU accession reforms. Low levels of effectiveness within the public administration, economic and political uncertainty, as well as a lack of engagement in the fight against crime and corruption have been most criticised. Fields of interest for partnership between German and Croatian companies, include energy, environmental protection, construction and fitting-out of hotels, according to the Chamber. German partners play an important and ever-welcome rôle in these fields. Partnership with German companies that have experience in these fields and their references from across the world may be helpful in finding effective and permanent solutions. In Croatia production may be enhanced in certain fields, which successfully and competitively achieve added-value at an international level, and this partly relates to the metal processing industry. German products and technologies are
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IMPRESSUM: Privredni vjesnik Kačićeva 9 10000 Zagreb +385 1 5600020 uprava@privredni.hr www.privredni-vjesnik.hr/ subscription
( €2.2 billion
over 2 years awaits Croatia after accession
EU COMMISSIONER PAWEL SAMECKI VISITS CROATIA
Preparation for EU funding of projects should have started We are worried about the weak financial ability of regional administrations in Croatia
highly regarded in many fields. In spite of the frustrating circumstances, the German-Croatian Chamber of Industry and Economy has been supportive of its members, but also non-members, offering many events and services, thereby encouraging German-Croatian economic relations. Last year, great interest was expressed in five important projects, of which projects on renewable energy sources and energy efficiency were implemented with the help of the German government. Additionally, within the framework of various projects, the Chamber has also successfully encouraged partnership between German and Croatian entrepreneurs in other fields. Together with its partners in Croatia and Germany, the Chamber will continue to advocate rapid advancement for the finalisation of important investment projects valued at several billion Euro. These projects are of special interest to Croatia, since they can act as economic activity enhancers, financed externally.
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
Igor Vukić fter joining the EU, Croatia will have the opportunity to receive some €2.2 billion from EU funds between 2012 and 2014. The degree to which these funds will be used depends on the capability of state administrations to accept and manage these funds, as well as on project quality. Last week, the Regional Policy Commissioner, Pawel Samecki, visited Zagreb in order to inspect the preliminary work. “It is crucial that all levels of government prepare the ground well so that this investment delivers an impetus to the whole economy,” stated Samecki.
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What areas did your talks with Croatian officials cover? lthough funds will be available for use in two years, projects should be selected now, and the documentation planning and design should start as early as possible. With big infrastructural projects, in addition to drafts and technical documentation, it is also necessary to draw up extensive studies on their implementation, studies on the impact on the environment, and other preliminary
work that takes considerable time. Do you have you specific projects under consideration? We did not discuss specific projects. It is necessary for Croatia itself to decide on projects and then compete for them. Concerning big infrastructure projects, they could reach hundreds of millions of euro. What are Croatia’s weaknesses in this area? We are concerned, for example, about the weak financial ability of regional administrations. We have discussed the possibility of generating these funds from the state budget. I think we have found mutual understanding regarding this problem. Many trained officials are required to manage funding, and the crisis prevents Croatia from expanding public administration. How can this be overcome? It is crucial for each new EU member to regulate imbalances with reference to the development through cohesion funds. Therefore, this sector needs additional employment if that is necessary for EU funds to be received and managed in an appropriate manner. (I.V.)
www.privredni.hr Business & Finance Weekly
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( 0.5 %of GDP
relates to state aid during average years
( 93% of all aid
in the EU goes to problematic companies
BRUSSELS VIEW OF THE CROATIAN SHIPPBUILDING INDUSTRY
THE RELENTLESS ARTICLE 87 Croatia needs to go back to the beginning so that the result, acceptable to the EC, and EU practice, definitely cuts shipyards from state aid, and that new investment, whatever the arrangement, secures their long-term business sustainability. This will not happen without inevitable painful cuts which presume closure and reducing the workforce Lada Stipić-Niseteo he problem with Croatian shipyards, in terms of being a laggard in EU harmonisation, is a two way street. The first aspect regards fulfilling obligations - the restructuring of shipyards is the only element of negotiations that, applied in Croatia, turned out to slow progress on the Market Competition chapter. Other obstacles solely depend on the goodwill, or mood, of the member countries. The blocking of the only chapter for which Croatia is responsible is additionally supported by the fact that the responsibility for restructuring was taken over with the Stabilisation and Association Agreement, and that its fulfilment has been several years overdue. The second element of the story is that EU membership is not harmonised with the current practice of state aid. Article 87 of the Agreement explicitly forbids giving aid to companies and/or problematic branches if this results in them gaining an unjustified advantage over competitors. The Agreement is brutal here – either you will continue, since you are responsible for your survival and you need to restructure, or you will perish.
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Cat-and-mouse game In general, state aid is a cat-andmouse game between member countries and the European Commission as the “protector of the Agreement” (in this case, full implementation of Article 87). During average years, around 0.5% of GDP relates to state aid. Some countries do not have it. Others are above average, and some register a steep rise if the state modernises sectors, for example the
The experience of the EC shows that in over half the cases of approved state aid, this actually concerns marginal situations, where states showed a high level of creativity in order to make the arrangement appear legitimate energy industry, through aid. The balance of systematic economic growth, acquired over years, was disturbed by the crisis. Irrespective of this, state aid is allowed in this instance, since it meets the criteria, helps recovery and re-
structuring, and is approved only once, but to credible projects. It is exactly these elements that were lacking in the first Croatian package for shipyards. The plans proved unrealistic and impossible to implement, especially since the economic crisis occurred concurrently, additionally aggravating the situation. It also reminded that restructuring should have been performed much earlier and thus less painfully, more for shipyards than for government and election arrangements.
Once and never again Criteria of the EC are contained in the statement of the former Competition Commissioner Neelie Kroes, who said we need
less, but more structured aid. In practice, 93% of all EU aid goes to problematic companies, and the majority of the programme is agreed on an ‘as and when’ basis and according to circumstances. The emergency has proved to be effective regarding the first reactions to the financial collapse, when banks were given enormous state aid funding. The criterion is yet again “once and never again”. The experience of the EC shows that over half the cases of approved state aid actually concern marginal situations, where states showed a high level of creativity in order to make the arrangement (unjustified according to EU regulations) appear legitimate. Political pressure and blackmail have left the EC frigid to the case of the French car industry and East German ironworks. It seems that the EC has carefully dissected Croatian proposals according to the same criteria they inspect others, and weak spots were found. Croatia was in a hurry. The job was not performed successfully (contributed to by the economic crisis), and it needs to be repeated, so that the result, acceptable to the EC, and with EU practice, finally cuts shipyards from state aid. Additionally, new investment, despite the arrangement (since this is of no interest to the EC) needs to secure long-term sustainability. This, according to current information, will not happen without painful cuts, including closure and workforce reduction, admits our contact from the EC, directly responsible for dealing with questions concerning Adriatic shipyards in the Commission’s ad hoc team for the evaluation of the Croatian concept of restructuring.
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Privredni vjesnik Year III No 0095
( over €15 million ( some 20% fewer coach travellers
of new investment
INTERVIEW: MATE JUJNOVIĆ, OWNER, PROMET MAKARSKA
Those who are filling the state budget are in a serious position I do not object to the arrival of new investors from abroad, under the condition they are not speculators. The money I have invested had been earned abroad services are more important than the quality of the transporter. I feel the safety and comfort of passengers as well as the quality of the coach need to be seriously considered when assigning work. Prices are also important, but maintenance costs are high, and yet it contributes to the safety of passengers and guarantees the reputation of the company as being serious. Therefore, the quality of maintenance should also be taken into account. When someone opts to save at the expense of maintenance, this could jeopardise passenger safety, and so a small change in price could become fatal for passengers.
Jozo Vrdoljak fter 30 years of living and working in New Zealand, Mate Jujnović returned to Croatia in 1995. He continued his business after his return, taking over the company Promet Makarska together with its Makarska terminal and the terminal in Sinj, as well as 59% of the shares of the bus terminal in Split. Privredni vjesnik discussed with him the problems he is facing in his work and new plans.
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What is the situation with Promet Makarska? I took over the company in 1995, when it had 50 workers and a fleet of 24 old coaches. Today, the company I own employs 250 workers, and has 95 modern coaches. We also own three coach terminals in Split, Makarska and Sinj, three service stations for technical inspections, and Promet Makarska has recently been authorised for the servicing of Chinese King Long coaches. Why did you opt for purchasing Chinese coaches? They are more cost-effective than those made in Europe and their quality is the same. They are not cheaper because of poor quality, but because the work force cheaper. If this coach was manufactured in Europe, it would cost €270,000, whilst coaches imported from China cost €170,000. The Chinese producer Xiamen King Long has so far manufactured and exported over 100,000 coaches to the majority of global markets. In 2005, the company obtained European ratification, issued by VCA, which enabled conformity and importation into Europe. Promet Makar-
Good young work force What is the quality of the Croatian work force? We have no problems with younger workers. There are sometimes problems with the older ones who have not learned in their former companies how to work in the interest of the company. Nevertheless, there are older workers in my company that I would entrust with my own private assets without any problem. I am always ready to pay severance wages to elderly workers who do not wish to work anymore. There are new and young people who are interested in working for my company, but I am not the type of a person who would force someone go. ska purchased three models of King Long coaches (tour bus, minibus, and city low-floor bus). What is the state of passenger transport? Our company transports over half of all passengers travelling from Split and Makarska to Zagreb, and vice versa. The situation in transport is becoming more difficult. Therefore, my estimate is that the number of passengers dropped by 20% due to the recession and the difficult financial situation for the general public. Coach transporters find it a problem that the state is funding non-profitable rail transportation through the budget,
which puts us, who fill the budget, in a less favourable position. Moreover, salaries in Croatian Railways are so high that we, as private companies, cannot keep up with them. It would be normal that those who are profitable have higher salaries than those receiving aid. However, despite the crisis and wide-ranging and aggravating circumstances, we are making profit. Are you satisfied with the way the state invites tenders for issuing concessions? I must say that in the case of tenders for concessions there are cases in which low prices for
Do you plan to take over some competitive companies that are in an extremely difficult situation? Currently, I am not planning any significant takeover, since I fund my Croatian companies from several business facilities in New Zealand. I do not object to the arrival of new investors from abroad, under the condition they are not speculators. The money I have invested had been made abroad. Do you plan to invest in the development of the country? Our company is planning over €15 million of investment. We plan to move Makarska Coach Terminal, which means another one will be built in a different location. In Sinj, we are reconstructing the existing terminal with all accompanying catering facilities. We are also currently constructing new technical service stations in Sinj and Makarska. Therefore, we are not stagnating, we are investing.
www.privredni.hr Business & Finance Weekly
5
CONSUMER LENDING
Trades people still dependent on banks As a result of the new Law on Consumer Lending, traders find it difficult to organise credit for customers National Bank and the Croatian Bank for Reconstruction and Development, and traders who issue loans for purchasing goods an services in four instalments at the maximum. The State Inspectorate monitors the implementation of the Law. Unfortunately, we do have information that some traders use the possibility of consumer lending. They organise deferred payment and consumer lending with banks via credit cards. As a result almost everyone offers the possibility of paying for goods over a longer period of time, possibly up to 24 months, whilst payments to traders are guaranteed, says Šimić. Additionally users have the advantage, under the new Law, to terminate the contract within 14 days, without explanation. Therefore they are protected from any small print contractual provisions. The Law applies to loans between €205 and €137,000, and creditors can no longer charge exorbitant interest rates for early repayment nor can they change the interest rate without informing the client. Charges for the early repayment of a loan are limited to between 0.5% and 1%.
he new Law on Consumer Lending, which came into force at the beginning of the year, is maintaining parity with the latest solutions in the area of consumer lending and is harmonised with European regulations. Consumer safety is additionally strengthened and now the possibility of the type of lending where banks often appear as creditors, seems even more impossible to traders. The Law on Consumer Lending is designed in such a way that banks and other financial institutions can work within it, but which traders find more difficult to do. Information, start point and conditions under which consumer lending can be offered are so convoluted for traders it is a consequence that if one of them opts for such lending, they need to significantly increase their sales in order to justify the costs of organising this approach, points out Mijo Šimić from Tekstilpromet. He adds that if the creditor wishes to approve five or more instalments for the payment of goods and services, the possibility of giving consumer loans becomes more complicat-
ed due to the provisions under which the Ministry of Finance approves the loan to the creditor. Šimić ventures that the creditor needs to invest considerable time in administration and the verification of the credit rating in order to obtain approval from the appropriate ministry. In addition, the process of concluding
::: news
CALL FOR PROPOSALS FOR THE EUROPEAN NETWORK OF FEMALE ENTREPRENEURSHIP AMBASSADORS
Nava banka requires additional capital
Female entrepreneurs in the front line
Nava banka, one of the smallest in Croatia, finished 2009 with a deficit of €0.96 million, according to its annual report. However, this loss is significantly smaller than the €7.87 million loss at the end of 2008. Assets of the bank totalled €45.2 million at the end of last year, a decrease of some 10% over the year. The bank announced that it will require additional capital of between €6.2 and €6.9 million in the first half of 2010, after an additional recapitalisation in 2009, when the majority shareholder became the construction company GIP Pionir.
ithin the Entrepreneurship and Innovations Framework Programme (EIP), which is the first component of the Competitiveness and Innovations Framework Programme (CIP), a call for proposals has been issued for the European Network for Female Entrepreneurship Ambassadors. The call for proposals aims at expanding the European Network of Female Entrepreneurship Ambassadors to other countries included in the CIP, which are not currently members. The call for proposal aims at encouraging female entrepreneurship and is intended solely for organisations active in the field of fostering, promoting and/or supporting en-
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the deal and monitoring payment creates additional expense. User benefits Consumers can obtain finance from those who manage to acquire a three-year approval from the Ministry of Finance, with the exception credit institutions, which have the approval of the Croatian
trepreneurship, with the aim of setting up a Network that would include successful entrepreneurs across Europe, and encourage women to recognise entrepreneurship as a desirable career. Replies to this call should identify the ambassadors, the target groups (prospective women entrepreneurs) for each participating country and the types of promotional activities the ambassadors should partici-
pate in. The indicative amount allocated for this call is €545,000. Funding from the budget of EIP is limited to 50% of total eligible costs of the project. The average amount of funding is in the region of €50,000 per project. The estimated number of national projects that will be funded is limited to 10, with an average of 10 female entrepreneurship ambassadors per network and the deadline for applications is 12th March 2010. The text of the call for proposals is available at ENT/CIP/09/E/ N08S003 - European Network of Female Entrepreneurship Ambassadors.
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Privredni vjesnik Year III No 0095
CROATIAN FOREIGN CURRENCY MARKET Currency
Kuna exchange mid-rate
AUD CAD JPY CHF GBP USD EUR
4.682483 4.925643 5.805892 4.985753 8.453476 5.236361 7.313102
Source: HNB
EUR
€5.84 million profit from Metronet In 2009, telecommunications company Metronet achieved EBITDA totalling €5.84 million. According to a company statement, the EBITDA margin increased by 20% meaning that Metronet earned some €29.17 million in 2009. Atlantic Group - a step away from prime market The signing of an agreement between Atlantic Group and Erste brokerage house has turned Atlantic Group’s stock into the first on the Croatian market that will have market servicing available at any time to buy or sell stock at a specific price. According to announcements, this specialist trade will begin in February. Ingra begins restructuring Ingra is in the process of a restructuring, which will include the short-term financial obligations of its companies, with the intention of reprogramming them to medium or long-term arrangements based on a structured collateral financial instrument. In addition to banks as creditors, special care will be given to those who invest in unsecured debt, and the selected consultant for the implementation of the restructuring programme will be KPMG Hrvatska.
USD
5.24
26.1.
27.1.
28.1.
CHF
5.00
7.32
5.22
4.98
7.31
5.20
4.96
7.30
5.18
4.94
7.29
5.16
4.92
7.28 25.1.
WEEK ENDED JANUARY 30, 2010
::: news
7.33
29.1
4.14 25.1.
26.1.
27.1.
28.1.
29.1
4.90 25.1.
26.1.
27.1.
28.1.
29.1
PBZ ANALYSIS
1.2% REDUCTION IN GDP IN 2010 The first two quarters will continue to show negative growth rates. The second half of the year could bring stagnation or at least extremely mild positive movements
n the basis of GDP movements during the first three quarters of 2009, and according to high volatility indicators in October and November, PBZ analyst Ivana Jović estimates that last year ended with a 6% fall in GDP on a year-on-year basis. “Considering the fact that negative trends in retail, industrial production and construction will continue during the first half of 2010, whilst state intervention measures remain vague, in terms of their implementation and effect over time, we anticipate that the first two quarters of 2010 will continue to record negative growth rates. The second half of the year could bring stagnation, or at least extremely mild positive movements”, she points out. According to current estimates, she stresses that real GDP will fall by 1.2% in relation to 2009. Additionally, movements of specific economic indicators and consumer and entrepreneur sentiment inspire little optimism. However, positive or negative risks, which could change our expectations in the forthcoming period must not be overlooked, points out Jović. She explained that positive risks, whose effects could reduce the anticipated fall in GDP, or result in mild growth over 2010 as a the best case scenario, primarily relate to more rapid and extensive recovery
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MACROECONOMIC INDICATORS (DATA TO 1.15.2010.)
2009
2010
GDP (Actual) (annualised %)
-6.0
-1.2
GDP (Nominal) (annualised %)
-3.6
1.6
Inflation (yearly avarage)
2.4
2.8
Source: PBZ
within EU countries. This could have a positive effect on Croatian exports, especially tourism. Naturally, positive movements could also be encouraged by a rapid and efficient implementation of government measures for economic aid, or by withdrawing
the crisis tax before the end of 2010. Nevertheless, the development of the situation in the opposite direction represents a series of negative risks, which could additionally exacerbate a fall in GDP, concludes Ivana Jović. (V.A.)
www.privredni.hr Business & Finance Weekly
WE PRESENT 7
KAPLAST, KUPLJENSKO
PLANT NURSERY ŽIŽEK, SVETA MARIJA
Flexible plastics The largest share of production relates to return packaging for beer and soft-drinks and the company has received two awards for packaging material
Tender loving care for fruit They are especially proud of the production of saplings of grafted walnut trees that have already started to bear fruit after two or three years. According to the owner they are leaders in this area he market for plastic packaging is extremely competitive which, due to the recession, increased considerably. Only the best and the most flexible can survive and they have been forced to save and reorganise. Kaplast has been amongst the fastest growing packaging producers for the past three years.
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Kaplast operates in an area of Special State Concern, where unemployment is high and every job counts The highest share of their production and some 90% of income relates to return packaging for beer and soft-drinks, especially carriers and cases. Over the past year, the recession cut their orders by half, and the company expects a similar situation this year, says the company’s director and owner Želimir Feitl. They are registering declines in income in all three markets in which they operate, Croatia, Serbia and B&H. Fighting the crisis As with many other companies, Kaplast was forced to cut expenditure, which included cutting employee sala-
ries, and unfortunately letting go 12 of their 62 workers. Although this does not seem a high figure, it is in fact, since Kaplast operates within an area of Special State Concern, where unemployment is high, and every job counts. In addition to letting people go, Kaplast reacted to the crisis by reducing investment, although this could not be completely avoided. As a consequence we invested €1 billion last year, says Feitl. The positive side shows a considerably high level of payment, since Kaplast mostly works with reliable and financially strong partners, and any debts they fail to collect are turned into assignments. Nevertheless Kaplast did feel the effect of the crisis in terms of liquidity, mainly through the extension of payment deadlines. Over the past three years Kaplast has received two awards for their packaging; in 2007 for best technical packaging of the new splitbox carrier, and last year for thin packaging of ice-cream. Kaplast has its own in-house design team but are unknown to the wider general public. Judging by their awards, they should be. (D.Ž.)
n a situation when most producers talk about the crisis and stagnation of work, the story of a producer who is relentlessly improving production does sound quite exceptional. Moreover, he has not increased prices for several years. This is the situation of Žižek Plant Nursery in Sveta Marija. Its owner and director, who is also an agronomy engineer, Ivan Žižek, has been working in plant nurseries for over 30 years and says their competitiveness is based on applying state-of-the-art technologies and processes, and that they have not raised their prices for 10 years.
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Personal production Žižek graduated at the Faculty of Agronomy in Zagreb, and he is currently attending postgraduate studies in Maribor. He has directed all his expertise, family tradition and love for the profession to producing fruit saplings and grafted vines. He is especially proud of the production of seedlings of grafted walnuts that have already started to bear fruit two to three years after planting. According to the owner they are the leaders in this type of production. In addition to him, there are perhaps two or three producers such saplings, but they mainly import, in addition to their personal production. Žižek, on the other hand, is developing personalised production, and does not even
consider importing, but rather exporting. The nursery produces a wide range of red and white wine varietals from saplings, as well as varieties of table grapes. Saplings and free advice We are always at the disposal of our customers, offering them expert advice, says Žižek. He ventures that he treats customer satisfaction as being of the utmost importance. He pays special attention to product quality, the development of a quality system, and meeting delivery deadlines. “Our customers come from throughout Croatia, since
In addition to customer satisfaction, Žižek also encourages employee motivation they have recognised our work and quality.” Naturally, the company has been hit by the crisis, but they have managed to collect outstanding debts, since they have become very careful when selecting with whom they work. In addition to customer satisfaction, Žižek also finds it important to motivate his workers and this he has achieved by guaranteeing secure jobs, through the constant improvement of working conditions and by awarding good work and high quality. (J.F.)
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Privredni vjesnik Year III No 0095
enterprise europe
::: news Laško Brewery to sell Jadranska Brewery The CEO of Jadranska pivovara, Nenad Buljan, announced that Pivovarna Laško the majority owner of the brewery, have decided to sell Jadranska pivovara, but if they cannot succeed, the factory will close. The majority owner decided on this course of action, since he does not feel Jadranska pivovara is able to survive in the long term. Buljan concluded that if the company closes, all employees would receive severance wages, as is required by law and the collective agreement. In 2009, Jadranska pivovara recorded a deficit of some €5.75 million, and it will be no different this year, says Buljan. He said they had already contacted local and foreign potential buyers of Jadranska pivovara, but did not wish to reveal their names. Zagreb: nett salaries stand at €845 after crisis tax Average nett salaries of employees in companies in Zagreb stood at €887 in November of 2009. This is reduced by €42 or 3.2% when the crisis tax is deducted, to €845, according to data provided by the Statistics Department of the Zagreb Office for City Strategic Planning and Development. In November, the average nett salary in Zagreb stood at €887 (without the special tax), an increase of €46.50 or 5.5% compared with October, mostly due to the Christmas bonus. On a year-onyear basis, mild nominal growth of nett salary was recorded. Nett salary in November 2009 was 0.8% or €7 higher than in November 2008. Mercator in Croatia: three new stores opening soon This year, Mercator-H plans to open three new stores in Croatia, specifically in Zagreb, Rovinj and Biograd. As with other Mercator stores, the range on offer will include over 60% of locally produced products and those with their trade mark, according to announcements from Mercator.
IVA JANDRIČEK, CIP CO-ORDINATOR, CROATIAN CHAMBER OF ECONOMY
Direct and indirect help for company development In HGK – Enterprise Europe Network, we have decided to promote the CIP programme as much as possible. Info-days will be organised in several Croatian cities to present the potential to entrepreneurs Krešimir Sočković he European Framework Competitiveness and Innovation Programme (CIP) directly and indirectly supports the development of small and medium-sized enterprises. The aim is to encourage the competitiveness of European companies. An amount of €3.62 billion has been provided for its implementation between 2007 and 2013. Privredni vjesnik discussed the programme with Iva Jandriček, CIP co-ordinator at the Croatian Chamber of Economy (HGK).
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What are the elements of the CIP programme? The CIP is divided into three operational programmes - the Entrepreneurship and Innovation
We would like more applications this year Programme (EIP), the Information Communication Technologies Policy Support Programme (ICT PSP) and the Intelligent Energy Europe Programme (IEE). The CIP is a fundamental part of EU programmes. This means that non-member countries, including Croatia, have to pay a membership fee in order for Croatian companies to apply for tenders to this programme. Therefore, HGK - Enterprise Europe Network has decided this programme requires high visibility and co-operation on two to three CIP sub-programmes with the appropriate authorities, more specifically, the Ministry of Economy, Labour and Entrepre-
neurship. The goal of the promotion is to obtain a large number of programmes that would, to a great extent, compensate for the amount paid as membership fees. What is the plan for promotion? We are discussing with the Ministry of Economy to hold a series of info-days on the CIP programme. We will organise such events in several Croatian cities, where the three sub-programmes will be presented, as well as the potential. Which CIP programmes might be of interest to companies? The first sub-programme CIPEIP includes interesting tenders, such as Financial Instruments and Eco-Innovations, areas in which Croatia has failed to achieve satisfying results. The tender for Financial Instruments will last the entire year. It is indented for financial institutions/ intermediaries that can, through this programme and under specific conditions, obtain more favourable loans and turn them into
even more favourable loans for companies. The second interesting tender, Eco-Innovations, will ask for invitations in April, when HGK is planning to organise an info-day as we did last year. To what extent have companies participated in these programmes? Eco-Innovations will be the third tender for this programme. There were seven applications in 2008. However, none were selected for funding. Even though last year HGK promoted the programme through info-days and publications, only ten applications arrived in 2009. We hope some will be funded, but we are not satisfied, and would like many more applications this year. In order to illustrate more clearly, of 614 participants from 32 countries, the 202 applications that arrived last year, the largest number came from Italy (133) and Spain (128), and from non-member countries, Turkey (29). Serbia, Albania and Iceland participated for the first time, with fourteen, three, and one participant.