Damir Grbavac, President, Raiffeisen pension fund A system where 100 employed work for 73 pensioners is unsustainable
Innovation from Split company Banko sharpening tool conquers the European market market including Germany
Croatian-Swedish meeting This will be an opportunity to intensify negotiations between Swedish and Croatian business partners
INTERVIEW
INOVATION
TRADE
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Croatian Business & Finance Weekly Established in 1953 Monday / 15th February / 2010 Year III / No 0097 www.privredni.hr
S U P P O R T E D
DUN&BRADSTREET external debt becomes a bigger problem According to Dun&Bradstreet’s monthly publication International Risk and Payment Review, this month Croatia kept its DB3d rating, which rates it amongst countries with mild business risk, according to the report by the credit reporting agency BonLine. There were no country rating changes. Regionally, Slovenia maintained the highest rating (DB2c), followed by Hungary (DB3d), Albania (DB4a), Macedonia (DB4b), Serbia (DB5a) and B&H (DB6a). According to D&B data, 24.5% of payments by Croatian companies to foreign companies exceeded the deadline by more than 30 days. A total of 64.2% of payments were settled within the deadline, whilst 9.9% were paid after 60 or more days. Unsettled debts, more than 120 days overdue, totalled 2.7%. Due to the credit crisis, pressure on the exchange rate and other circumstances, D&B estimate that payments to foreign companies will remain a challenge for Croatian companies in the forthcoming period. Therefore, D&B still recommend foreign investors to secure business with Croatian companies through a letter of credit. D&B point out that foreign debt accentuates exposure to external shocks. According to data provided by the Croatian National Bank, foreign debt increased to $55.9 billion, which is 15.1% more than in 2007. D&B estimate that debt, during the previous year, reached US$58.8 billion, notwithstanding the restrictive credit policy. (V.A.)
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pvinternational pv international T H E
C R O A T I A N
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E C O N O M Y
ECONOMIC ASSISTANCE LENDING
START OF AUCTIONS FOR €0.68 BILLION Cost of lending for entrepreneurs should range between 5.12% and 5.72% and granted with a three-year term Igor Vukić he first part of the government measures for aiding the economy should bring Croatian entrepreneurs loans totalling €0.68 billion. The first auction for maintaining liquidity according to the ‘model A’ should take place this week. According to the government Vice-President and Minister of Finance, Ivan Šuker, the cost of lending for entrepreneurs should range between 5.12% and 5.72%. The exact amount of the interest rate will be given at auction, where available loan quotas will be issued to banks which offer the lowest effective interest rate to entrepreneurs. Financing is provided by the Croatian National Bank, releasing to banks funds from reserves (some €0.41 billion). Banks have thus transferred, using a syndicated loan, €0.27 billion to the Croatian Bank for Reconstruction and Development (HBOR), at 3% interest. Loans will be created through 40% of HBOR funds and 60% of banks funds, creating a potential €0.68 billion. Approved loans will be for three years and the interest rate to entrepreneurs will be set as a weighted average of the HBOR interest rate of 3.8% and the bank offer at auction.
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If two or more banks offer the same conditions, credit quotas will be divided between banks, proportionally to the amount of their offer. “I invite banks and entrepreneurs to rapidly prepare projects, so that funds from the first auction may be fully taken up”, said Prime Minister, Jadranka Kosor. Crafts
people and companies of all sizes are eligible to apply. Minister Šuker announced that the first credits issued at auction will reach entrepreneurs much faster than had been unofficially stated in the Press. If loan applications are well prepared, the first could be ready for use 15 or 20 days after the first auction.
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Privredni vjesnik Year III No 0097
Ivana Drčec, owner of Cyclops
DO WE NEED GLOBALLY RECOGNISED INVENTORS This year our company has won five prestigious international awards for innovation from Moscow, Taiwan and London. Unfortunately there are still difficulties to getting funding in Croatia n 2005 I created the IT company Cyclops from my study with two servers bought with a quite unfavourable bank loan. The aim was to develop software solutions that fit each individual user. Even though much bigger companies for developing applications already existed on the market, inventiveness was one of the basic guidelines for penetrating the market. This battle was exhausting and it still is. Year by year, I have managed (with the help of my colleagues, all top professionals) to maintain a minimum of 30% profit growth. We work exclusively with private users since it was impossible for us, being a young company, to enter the state sector, which is the greatest generator of IT work. The long payment deadlines of the state would most certainly ruin us, since we are such a small company. This year our company has won five prestigious international awards for innovation, from Moscow, Taiwan and London. This year, with our own funds, we have expanded our business into new service (infrastructural) activities, closely linked to our main field of work. Recently we returned from a tour of North America where we negotiated with some of the leading American companies about using our consulting services and software solutions in their industry. The last three awards for innovation came from London a month ago from the British Invention Society. All in all, our five years of work have been extremely cre-
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IMPRESSUM: Privredni vjesnik Kačićeva 9 10000 Zagreb +385 1 5600020 uprava@privredni.hr www.privredni-vjesnik.hr/ subscription
( 8.7%
return on mandatory funds in 2009
DAMIR GRBAVAC, BOARD PRESIDENT, RAI
ANY SYSTEM IN W WORK FOR 73 PE
From both professional and technical po this does not guarantee that the primary Jasminka Filipas
ative and positive, but we remain alone in this battle. Not only do we develop new products with our own initiative and funds, open new markets and ultimately promote Croatia as a country of innovative solutions, we struggle with collecting debts on a daily basis. We rush every month to pay VAT and taxes, in order to avoid receiving notifications, and we kindly ask our customers to pay us on time, since this is our daily bread. Despite their good will, our customers cannot always meet the deadlines, since they work with the state, and it is well-known the state does not pay in a timely manner. State institutions have long been working for their own sake, and when you approach them with a concrete proposition, they simply cannot find time. As we have been told in agencies responsible for state aid, the activity of our company is not applicable for any type of assistance. Is it not then normal to ask, what type of activities are applicable for obtaining aid, and which companies meet the criteria if ours is not one of them?
FOR PUBLISHER Nikola Baučić +385 1 4846661 uprava@privredni.hr
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EXECUTIVE EDITORS Andrea Marić maric@privredni.hr Vesna Antonić antonic@privredni.hr
COUNSELLOR, INTERNATIONAL OPERATIONS, LANGUAGE EDITOR Ray Fletcher fletcher@privredni.hr
he announced progress on pension reform was the basis for Privredni vjesnik interviewing the Board President of the Raiffeisen mandatory pension fund, Damir Grbavac, who is also President of the Association for Pension Fund and Pension Insurance Agencies Management in the Croatian Chamber of Economy (HGK).
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The State Secretary for Labour has recently announced the continuity of pension reform. Where did it stop and in which direction will it continue?
Three portfolios are planned to be introduced on the basis of varying levels of risk sensitivity for different age groups Reform started in the late ‘90s and continued in 2002, when pension funds began operations. From both professional and technical points of view, the introduction of pension funds has been highly successful. However, this does not guarantee that the primary task of pension funds, that of satisfying future pensions, will be achieved. Concerning the basic aims of reform, system development halted, and some fundamental goals of the reform have been abandoned. Which ones precisely? For example, encouraging a longer working life, since the average working life of our present pen-
sioners is unsustainably low, as well as the percentage of those working in relation to the total general public of active working age. On average our life span is longer, but it is also a great problem to build a sustainable pension system that necessitates an adequate living standard for pensioners. Moreover, the Bismarck system of generational solidarity is ideal, but unsustainable bearing in mind current demographic and economic conditions. This system should be changed. Its reforms are both a global and a European process, not only specific to Croatia. Are we lagging regarding this process? It might be better to say we are lagging even though we have successfully developed institutions and mechanism which partly represent solutions to these questions. However, some social circumstances and our specific features have considerably affected the gravity of our situation. For example, during the war in Croatia, and later during transition, the number of unemployed and pensioners significantly increased, whilst the working life-span of early pensioners had decreased. The present situation is that 100 employed individuals finance the pensions for 73 pensioners, which is simply unsustainable in the long term. For years you have been promoting higher contributions to the second pension pillar? Contributions of 5% are really insufficient. This was suitable when pension reform started, since transitional expenses of the reform
www.privredni.hr Business & Finance Weekly
INTE ERVIEW 3
( 0.75%compensation rate for pension funds management in 2010
IFFEISEN MANDATORY PENSION FUND
WHICH 100 EMPLOYED PEOPLE ENSIONERS IS UNSUSTAINABLE
oints of view, the introduction of pension funds has been very successful, but y task of pension funds, that of satisfying future pensions, will be achieved
also had to be taken into account. That is why the plan was to gradually increase contributions to 10%. However, the economic crisis occurred and it was quite difficult to plan additional contributions. It is a fact that members of pension funds - the future pensioners - are in a difficult position with this level of contribution rate and
It is possible to anticipate in the future that pension funds will also invest in the stock market, hedge funds and more intensively in property calculation of pensions. Future pensioners set aside only 5% of their gross salaries for what they can, with certainty, regard as the source of their future pension, and 15% goes to solidarity. However,
of this 15% no one can guarantee a satisfactory pension from the first pillar, primarily due to demographic problems and the ongoing processes. This is precisely the reason that the rate for the second pillar should be augmented. The need to cut administrative costs for the second and third pillars has also been announced. Could you explain what type of costs? Costs have been decreasing comparatively for the second pension pillar for years. Moreover, the maximum legal contribution rate for pension fund management is 1.2% per annum, as it was at the start. With a decision from the Croatian Agency for Supervision of Financial Services (HANFA), this annual rate amounts to 0.75% for 2010. This means that growth of income has created room for a relative decrease in this greatest cost.
You have suggested portfolios of varying risks. Did you define this and when could it start? This is extremely complex work and it will take five years to complete. We have defined the basics and presented them to HANFA. Currently, I can say the plan is to introduce three portfolios on the basis of varying levels of risk sensitivity for different age groups. For example, it is more suitable for younger people to be in a riskier portfolio, which is expected to result in a higher return, whilst people who are approaching retirement should be in a more conservative portfolio. Furthermore, the latter could have serious problems if there are one or two bad years. Therefore, in such circumstances their funds should be secured appropriately with more conservative investment rules. The legal procedure might last up to the end of the year, and its implementa-
tion will be gradual, since a series of adjustments will be required. It is evident there is still ample room for improvements in the current system of pension funds Definitely. Regarding the liberalisation of investment, certain provisions from the amendments of the Law from 2007, which lead to considerable liberalisation, will not be applied until Croatia joins the EU, and some will be applied only after the Euro is introduced. What we are missing now is protection from interest rate risk. We expect the entire system of limiting investment will gradually occur in accordance with reasonable rules, to EU standards. Consequently it can be expected that pension funds will in the future invest in the stock market, hedge funds, and more in property, although these will never be dominant types of investment.
2008 was difficult for funds. What was 2009 like and what can we expect this year, considering the aggravated economic circumstances? Last year was extremely difficult in terms of the real economy. Regarding the capital market and the business of pension funds, this was actually a good year. Mandatory funds achieved a return of 8.7%, and quite a large percentage of the negative returns from 2008 were compensated. Assets continued to grow more rigorously, and pension funds, despite the problems of 2008, achieved a 5% return since the beginning. This means that we have actually completed and exceeded our initial goals, which predicted a real return of 2%. Our return in 2008 was better and less negative than those globally. However, since we have a short history of pension funds, this drop affected us more deeply. We do not normally make predictions, nor are we allowed to. However, under the conditions of a dramatic crisis and problematic trends in both macroeconomy and growth rate terms, which will range around zero, we anticipate relatively solid business. I would also point out that the business of pension funds should be observed over a long time-scaale, and not on a monthly level, nor on a year-on-year basis.
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Privredni vjesnik Year III No 0097
CROATIAN FOREIGN CURRENCY MARKET Currency
Kuna exchange mid-rate
AUD CAD JPY CHF GBP USD EUR
4,749593 5,110406 6,012588 4,995306 8,427315 5,402364 7,319123
Source: HNB
5.44
5.00
7.32
5.40
4.99
7.31
5.36
4.98
7.30
5.32
4.97
7.29
5.28
4.96
7.28 8.2.
WEEK ENDED FEBRUARY 12, 2010
::: news
7.33
9.2.
10.2.
11.2.
12.2.
5.24 8.2.
9.2.
10.2.
11.2.
12.2.
4.95 8.2.
9.2.
10.2.
11.2.
12.2.
CO-OPERATION BETWEEN HBOR AND EDB
CCDA shares valued at €31.89 billion In January, the market value of 993 shares of Croatian companies included in the depository of the Central Clearing Depository Agency (CCDA) increased by 3.8%, in relation to December 2009. CCDA statistics showed that the shares market value totalled €31.89 billion, which is €1.17 billion more than at the end of December 2009. Additionally, the market value of shares included in the depository increased in January, whilst the market value of commercial bills decreased. At the end of January, the market value of all 1,156 securities of the CCDA depository reached a value of €39.98 billion.
HPB allocates €41.09 million for housing loans The Croatian Post Bank (HPB) announced it has set aside €41.09 million for housing loans this year, and that it would present this week a range of competitively-priced lending for private individuals and entrepreneurs.
€50 million to small and
medium-sized enterprises SME’s are the lifeblood of the economy and these funds will enhance on-going economic regeneration. Overall, both banks regard past performance as more than successful ecently in the Head Office of the European Development Bank, Anton Kovačev, Board President of the Croatian Bank for Reconstruction and Development (HBOR) and Imra Tarafas, vice-governor of EDB, signed a framework loan contract with a value of €50 million. The approved funds will be used for financing new investment in small and medium-sized Croatian enterprises, thereby reinforcing its competitiveness and help create new jobs and preserve existing ones, according to the statement from HBOR. Small and medium-sized entrepreneurship plays a crucial role in the economic growth of
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Last week, the Board revealed it would actively engage in the government programme for economic recovery and development, according to which entrepreneurs will be approved funds for overcoming difficulties caused by the global crisis.
Croatia, and through its lending programmes intended for this segment of the economy, HBOR offers medium and long-term funding at favourable interest rates. In addition to its active participation in the implementation of the government measures for economic recovery, HBOR is continuing with its regular programmes for financing the economy, and has ensured additional finance through this contract for assisting small and medium-sized entrepreneurs. The signing of the framework loan contract additionally confirmed the long-term and successful co-operation between HBOR and EDB, which had started in 2001, and continued
with the signing of the framework contract in 2008. The implementation of this contract from 2008, under which HBOR obtained €50 million for the requirements of small
Signing of the agreement confirms the long-term co-operation between the two banks with 77 projects financed to date and medium-sized enterprises, and financed 77 projects, was evaluated by EDB as successful. (V.A.)
www.privredni.hr Business & Finance Weekly
5
FUNDS IN CROATIA
::: news
Consistent trends In January, of 96 active open funds, 67 showed a surplus with returns ranging between 9.72% and -6.73% Iztok Likar
Over €1 billion for renewable energy sources Considering the sector of renewable energy sources is expecting over €1 billion in investment during the next ten years, local producers will play a major role. Specific obstacles relate to complex procedures and a lack of regulation, which make it impossible to identify the rôle of the local producer.
anuary 2010 yielded better results for funds than during the last three months of 2009. Moreover, the trend from the end of 2009, which pointed to positive monthly results of more and more funds, continued. From a total of 96 active open funds, 67 showed positive in January (59 in December, 50 in November, 39 in October). Share funds are not oriented towards the region, as well as some mixed, ended up in deficit. Money and mandatory funds achieved positive results. In January the Crobex stock index of the Zagreb Stock Exchange
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Over the past 12 months returns have ranged between 54.34% and -39.13% increased by 9.95%. Crobex10 increased by 10.84%, and the mandatory Crobis by 1.49%. January is the fourth consecutive month during which funds have achieved wide variations in results. Consequently, their monthly changes range between 9.72% and -6.73%. Some 31 funds increased by over 1%, with 18 generating a return of over 3%. 39 funds have registered a fall (36 in December, 45 in November, 56 in October), most by 3%. Eleven funds finished with a 2% deficit and seven by over 4%. Share funds and two mixed funds are in the top 10, headed by OTP indeksni fund. In addition a further six mixed funds finished in the top 20. Regional investing guarantees success Amongst the top 66 share and mixed funds, the majority are those investing in the region, more precisely, on the local
Category
*best results Dec. 2009.
**best results over 1 year
share
OTP indeksni
+9,72
PBZ I-Stock
+54,34
mixed
Erste Balanced
+5,35
OTP uravnoteženi
+26,10
bonds
Erste Bond
+1,94
Raiffeisen Bonds
+15,97
* from 31.12.09. to 29.01.10.
** from 29.01.09. to 29.01.10.
Source: www.hrportfolio.com
Stock Exchange, whilst almost all funds oriented towards global markets have been recording negative results. The biggest returns in the group of share funds referred to OTP indeksni (9.72%), Raiffeisen Croatian shares (8.08%) and Erste Adriatic Equity (6.04%). Regarding mixed funds, Erste Balanced achieved the highest growth, with a monthly return of 5.35%, followed by 4.11%, and 3.96% of Raiffeisen Balanced and ICF balanced. Concerning mixed and share funds, HPB Dynamic and Ilirika Bric recorded the biggest drop, 6.73%. All ten mandatory
funds increased, thus achieving a return within the range of 0.11% and 1.94%. Four mandatory funds increased by over 1%. During January, money funds also increased, with a return of between 0.09% and 0.73%. The most successful were HPB money fund (0.73%) and ST Cash (0.61%). Twelve of the twenty money funds achieved growth of over 0.30%. During the previous 12 months, fund returns have ranged between 54.34% and -39.13%, with 84 funds achieving positive results; 41 increased by over 10%, and 15 by over 20%.
Second tranche of Podravka commercial paper Recently, Podravka concluded the sale of its second tranche of commewrcial paper for a total amount of €17.8 million, an interest rate of 9.15% an issue price of 91.638%, with a maturity of 364 days, and RBA Bank as dealer. The funds were used for refinancing the first tranche issued in February 2009. Total value of the programme of issued commercial paper from Podravka amounts to €47.94 million. EBRD co-ownership of Geofoto Recently in Zagreb the Geofoto Group signed a contract with the European Bank for Reconstruction and Development (EBRD) for an investment of €4 million, making the EBRD the minority owner of the Geofoto Group. Through funds obtained from the EBRD, Geofoto will implement its plans for 2010 and 2011. The EBRD will be included, through its share in Geofoto, in making of the most significant strategic decisions. Geofoto consultant in negotiations with EBRD is InterCapital, the leading independent Croatian investment group, with which Geofoto continues co-operation to prepare this company for an initial public offering, scheduled for 2012.
6 WE PRESENT HRASTICO, PITOMAČA
Privredni vjesnik Year III No 0097
UNILINE, PULA
Designed oak brings DMC becomes tour high profit operator Last year, Uniline achieved gross profit of €20.72 million a slight uptick over 2008.
A range of 250 models of modern furniture has been developed over three years with half of production marketed abroad ocal timber plus modern design should be a winning combination for the market, as theoreticians of the Croatian timber industry have been pointing out for years. The Hrastico company from Pitomača have brought the idea to fruition. They have created a range of furniture made from solid local wood, predominantly oak (85%). The range consists of 250 standard products, including beds, cabinets, large and smallsized tables, chests of drawers, bedside tables, book shelves and mirror chests. A specific part of the range is intended for fittingout wine shops, wine cellars and restaurants. Finished products reflect simple lines and high qual-
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A specific portion of the range is intended for fitting-out wine shops, wine cellars and restaurants. Finished products reflect simple lines and high quality processing ity processing, and they can be used in contemporary residential facilities. All models are made of solid wood, and they are labelled as a totally wooden product, that can also be used in combination with related materials and patterns. Almost half the product
line finds customer abroad. “Our great advantage is flexibility when processing orders. As opposed to bigger systems, customers arrange the deal with the owner or director, who is quite familiar with current production capacities, and who can quickly answer all questions, says Mladen Balić, the owner of Hrastico, a 37-year-old timber industry engineer. Potential for new employment All this guarantees work for months ahead. Hrastico employs 11 staff, but despite the difficult situation in the timber industry, this year productivity could very well increase, and new workers employed. Their participation at fairs, for example Viroexpo in Virovitica, Ambijenta (the Zagreb Fair) and Gast in Split, brought them new deals. As exporters they have applied for funding to both the Ministry of Forestry and Ministry of Economy. They have already invested non-repayable funds into the development of new products, and also plan to build production plants, fit new machinery and boiler rooms operating on bio-waste. They are also working on developing their business organisation and implementing ISO standards. Our company philosophy is contained in our name Hrastico. It is comprised of the words hrast (oak), rast (growth) and co (cooperation). (I.V.)
niline was founded in 1997 with its headquarters located in Pula and branches situated along the entire Adriatic coast and in Zagreb. Although founded as an incoming tour operator, today this company encompasses a broad array of tourism-related activities. However, the main activity still remains booking and offering of services on the spot. It has also been providing rent-a-car services for the past three years, and this year its fleet will consist of 500 cars. Uniline employs 100 well-briefed and motivated professionals, and the figure rises to 200 during the season, says board member and director of the tourism sector, Sandra Gobin. Last year, Uniline achieved gross profit of €20.72 million, a slight growth over 2008. Sales of tourist packages via the Uniline web site, exclusively intended for individual tourists, recorded 30% growth last year. An additional element within the company is a department for destination marketing, which mainly offers services to Japanese tourists, and to a lesser extent to tourists form Thailand and China. “Last year, profit in this department soared by 16%, and since Croatia has become an interesting destination to visitors from the Far East, this year we anticipate a further boost in profits from these markets”, points out the director.
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China, India and Japan show interest Current booking indicators show better results on a year-on-year basis. However Sandra Gobin says it is too early for definitive estimates. According to Uniline, this year will be no easier than the last. Therefore costs should be carefully planned, markets marketed even more aggressively and the number of business partnerships increased, primarily in China, India and Japan. One of the most valuable strategic bases for Uniline is its integration with the DMC company (destination management), which assumes a close working relationship with the local tourist agency when creating a recognisable destination. One such programme is the joint project with the Tourist Agency of Istria regarding the design of special programmes for cycling and gastronomic tours across Istria. Our good relationship with all our partners is of inestimable value to us, since it is a precondition for creating a quality product for markets and guests who are becoming more demanding. Here we need to especially point out private accommodation, which is registering an increase in demand, said Sandra Gobin. This year, Uniline, already employing ten new workers, plans to employ almost a hundred seasonal workers throughout Croatia. (S.P.)
www.privredni.hr Business & Finance Weekly
7
INNOVATIVE PRODUCT OF A SPLIT COMPANY
BANKO PNEUMATIC PLANE CONQUERS THE EUROPEAN MARKET The first international showing of the Banko plane will take place at the Hardware Fair in Cologne at the end of February. A distributor has been agreed, to cover some of the European market, including Germany In the construction of a ship of 65,000 gross tonnes, valued at €50 million, Brodosplit might save €506,000 if their workers use the plane based on an innovative lamel machine manufactured by the company from Split. Banko’s plane has already been tried and tested by shipbuilders, and they will most likely purchase it, advised Aljoša Bošković.
Jozo Vrdoljak he Banko company from Split has commenced the production of an air-driven plane, which was tested from September to November 2009 in the industrial conditions of the Split shipyard, and testing will also continue in other shipyards. This innovative local product was developed with the financial and logistic support of the businesscommunication centre of Croatia BICRO. Aljoša Bošković, director of Banko, announced the start of a breakthrough into international markets this year. “We are showing our product at the first international exhibition of sharpening systems at the big International Hardware Fair in Cologne at the end of February. We have already organised a distributor to cover some of the European market, and we expect other interested EU partners will emerge after the fair through the references we obtain after testing. With help from the Croatian Bank for Reconstruction and Development and commercial banks, this year we plan to increase our production capacity according to preliminary announcements regarding the demand for our products”, pointed out the director. The plane is one of the positive examples of co-operation between the scientific and private sector, where BICRO funded the project. It relates to a product in which
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What the figures say An air-driven plane made by a foreign manufacturer, powered by a 2 kW motor costs €55,000; the Banko model is priced at €44,000. Servicing of a foreign sharpening tool is €60,000, compared with €30,000 for a local model. Rather than €1.8 million, planing with the tool from Split costs €1.3 million. For comparison, from 1 million working hours on a ship valued at €50 million, 100,000 hours is spent on the planing process.
the BICRO agency invested €1.04 million within the framework of the Razum programme, and an additional €0.5 million in a technically more advanced prototype version of the tool. Highly cost-effective This is a significant moment for BICRO, since it proves that applying knowledge and the innovative potential of entrepre-
neurs can create a joint quality product for industrial needs. “I believe the successful development of Banko planing systems and the anticipated market success for other innovative entrepreneurs is a waypoint for others, who are welcomed to contact our centre for support”, stresses the director of the business-innovation Croatian centre BICRO, Dalibor Marijanović.
Higher productivity “The test results were positive. The plane displayed all its advantages and we expect to close the deal for its purchase during 2010”, ventures Bošković. Compared with air-driven planes manufactured by leading global producers, the Banko plane boosts increased sharpening efficiency and durability. It enables environmentally friendly production and produces less vibration during work. Additionally, it is more energy effective. Its ergonomic design reduces strain for the operator and easier control during work, all at a competitive price. Our plane provides 60% to 100% more efficient sharpening, which increases productivity. Our goal is to offer it to industrial users, especially the shipbuilding industry, metal production and foundries. We also have plans to develop the global sales market, and to set up a servicing centre”, points out Bošković.
Intellectual capital
INTANGIBLE ASSETS AS SOURCE OF PROFIT roatian laws protecting intellectual property are integrated and harmonised within the global system, but there is no profitable use made of this intellectual capital. The first conference on intellectual property Intelektiv, which will be held in the Sheraton Ho-
C
tel in Zagreb, should be a step forward towards solving this problem. The organisers of the conference are the American Chamber of Economy in Croatia and the consulting company Vernexo. The moderator will be the Dean of VERN College, Goran Radman. Intelektiv is
intended for the senior executives of companies of all sizes and profiles who wish to improve the commercialisation of their intellectual property, and also to all who are in any way associated with management of intangible assets. According to announcements, lecturers will
be the Board President of the Atlantic Group, Emil Tedeschi, Director of the State Institute for Intellectual Property, Željko Topić, President of the Croatian Intellectual Property Office, Igor Gliha and the Director of the Ruđer Bošković Institute, Danica Ramljak.
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Privredni vjesnik Year II No 0097
Croatian-Swedish meeting
Ample room for improving co-operation
During the visit by the Swedish Minister of Trade, a seminar will be held concerning business in the European and global market. This will be an opportunity to intensify negotiations between Swedish and Croatian business partners Krešimir Sočković f all Scandinavian countries, Croatia has the best economic relations with Sweden. This is visible from import/export indicators, the number of Swedish tourists, and the amount of Swedish investment in Croatia. For the past ten years total trade between Croatia and Sweden has been continuously growing. Imports of Swedish products have been recording a slight rise, whilst the value of Croatian exports (especially over the past four years) has been oscillating, mostly due to the periodic exports of ships. This growth was interrupted in 2009 due to the global economic crisis. Preliminary trade data for 2009 show that Croatian exports amounted to US$45.5 million, representing a 35% drop compared with last year. In 2009, Croatia imported goods with a value of US$195.6 million, a 40% decrease in relation to 2008. However, Croatia’s foreign trade exchange still shows a US$150 million deficit, and the import/ export balance stands at 24%.
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Croatian exporters Croatian companies mainly export to Sweden electric transformers, static converters, boilers for producing steam, furniture,
Portland cement, alumina cement, cinder cement and men’s clothing. The most imported goods from Sweden are electrical devices for wire-line telephony and telegraphy, personal vehicles, medications, deepfrozen fish and petroleum oil. There is ample room for expanding co-operation between Croatia and Sweden. The prime possibilities concern the sectors of energy, shipbuilding, military production, environmental protection, tourism (health tourism), the food industry (ecological products) and the wood processing industry. Regarding the shipbuilding sector, there is the possibility to build ships in Croatian
For the past ten years imports and exports between Croatia and Sweden has been increasing shipyards for Swedish contractors, fitting state-of-the art Swedish technology in shipbuilding, as well as the potential for Swedish companies to participate in the privatisation of Croatian shipyards. Concerning the wood processing industry, the Croatian Chamber of Economy is trying to assist Croatian wood producers
to market their products in IKEA, which is scheduled to open in Zagreb in 2011. Working globally During the visit of the Swedish Ministry of Trade, Ewa Björling, on February 23, a seminar will be held at the Croatian Chamber of Economy on the topic Business on the European and Global Market. After the presentation by Minister Björling and the Croatian Minister of Economy Đuro Popijač, two separate discussions will be held. The first will cover the internal market of the EU, and will be based on the problems of business of Croatian companies within the unified EU market after Croatia’s accession. The second will concern trade policy and business problems on the global market. Representatives of Swedish institutions (Ministry of Foreign Trade, Ministry of Trade, Trade Council, and others) and experts in the above areas will share their experiences and methods used to solve their business problems. This will also be an opportunity for representatives of Croatian companies, Swedish companies in the Croatian market and Croatian institutions to openly discuss the problems they are facing and to receive answers to their questions.
::: news €5.3 million for waste management in Šibenik The Greek company Ergasis Techniki S.A will be constructing a new municipal landfill - a regional centre for waste management - as well as reconstructing the existing landfill in Šibenik and Knin. The contract, valued at over €5.3 million, was signed last week in Zagreb. The project will be funded with over €3.6 million from the pre-accession Ispa fund, and the remainder from national resources. The aim of the project is to create a modern and ecologically acceptable waste management system for Šibenik and Knin. Laško gives up on Jadranska pivovara in Split The Director of Jadranska pivovara (brewery) in Split, Nenad Buljan, received a request from his supervisory board to find a strategic buyer over the next few months since Pivovarna Laško, as the owner of the company does not wish to cover losses created by insufficient production capacity. Laško became the owner in 2000 but two years ago the production of Zlatorog beer was suspended, and with only Kaltenberg beer, there is no future for the remaining 65 workers. The balance sheet of Jadranska pivovara has been “weakened” by €30 million over two years. This cannot continue, said Dušan Zorko, Director of Pivovarna Laško. If it fails to find a buyer or rent the plant, Laško will halt production in Split. New wave of claims by uncompensated savers in LB The attorney office Jadek-Pensa, as the representatives of Croatian nationals, Andra and Alan Perić in the procedure before the constitutional court in Ljubljana regarding the provision on freezing court procedures for the return of savings to Croatian savers of Ljubljanska banka, has been annulled, do not believe that savers from ex-Yugoslavia will now come pouring in to Slovenian courts with new suits. They believe this could only happen if one of the savers wins a suit. During the freezing of the procedure, there were 110 active disputes before the appropriate courts, and three executive procedures against LB and NLB.