Manufacture for European markets Slavonian companies assembling aircraft for Alpi Aviation
Low-cost companies to boost fresh start The financial crisis represents an opportunity to prepare new air traffic projects
An eye in the sky €15 million investment in a vast market Croatian manufacture of sky photogaphy
INNOVATION
AIR TRANSPORT
NEW PRODUCTS
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Croatian Business & Finance Weekly Established in 1953 Monday / 12th April / 2010 Year III / No 0104 www.privredni.hr
S U P P O R T E D
B Y
T H E
pvinternational pv international C R O A T I A N
C H A M B E R
O F
E C O N O M Y
CROATIAN NATIONAL BANK COMMENTS ON GOVERNMENT MEASURES
Economic activity may increase by 0.5%
CNB analysts estimate that in 2010, €1.23 billion in new loans could be available to the private sector Vesna Antonić
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overnment measures, intended to support the Croatian economy through models A and B, could increase economic activity by 0.5% in this year alone, especially when compared with the situation where no measures are applied. Higher GDP growth as well as higher incomes should increase personal consumption by a similar percentage. Considering the fact that an element of increased investment and personal consumption will be compensated through imports, a slight increase in the trade deficit is also expected. This evaluation, conducted by the Croatian National Bank, is based on a simulation of expected measures having an influence on the economy. CNB analysts stress that at the end of January the government adopted two papers containing incentive measures for economic revival and development. The documents determine two models (A and B) which encourage lending activity to the economy, together with the active participation of the government, CNB and commercial banks. CNB estimates that, in such a manner, more than €1.23 billion of new loans could be advanced to the
private sector. According to CNB analysts, the expected influence of the measures from models A and B on the economy itself is based on a simulation which includes a stochastic model of Croatian general equilibrium. The simulation results solely present the anticipated influence of measures in comparison with the situation where no measures are applied. Total lending increase They do not represent the absolute level of expected economic growth or changes in other macroeconomic variables. The first evaluation results on the influence of measures, which are, at the same time, the basic incoming element in the model simulation, relate to the expected decrease of
weighted interest rates for total corporate lending by around 0.5 percentage points. Such a result is based on several assumptions. Firstly, interest rates for some company loans in 2010 will correspond to interest rates valid at the end of the previous year. Secondly, all funding, as foreseen by specific measure programmes, are to be used by the end of the year, including €0.68 billion of loans which are to be co-financed by the Croatian Bank for Reconstruction and Development as well as €0.55 billion granted under government guarantees. Additionally, of the €13.56 billion for companies, €7.67 billion of loans are to be received by the end of the year, this including €2.88 billion of long-term and €4.79 billion of short-term loans.
Loans which are a part of the measures programme, are to be used for the funding of long-term loans (€1.23 billion as foreseen by the programme) whereas the rest of long- and short-term loans are to be re-funded according to that market rate of interest valid at the end of 2009. This simulation has also shown that the expected decrease of weighted interest rates by 0.5 percentage points will increase total corporate lending by around 5%. This indicates that half the funds from the programme are to increase the nominal amount of corporate loans (new loans) whereas the other half is to be used by companies in order to replace current, more expensive bank loans which are to be repaid this year, according to CNB analysts.
2 VIEWPOINT
Privredni vjesnik Year III No 0104
LJERKA SEDLAN-KÖNIG, OWNER, SCHOOL FOR BUSINESS COMMUNICATION KING, OSIJEK
MANUFACTURE FOR EUROPEAN MARKETS
CROATIA PROVIDES Negotiation skills as AIRCRAFT FOR THE a key to success Successful negotiation depends less on talent WORLD and more on being competent in negotiation theory and practical skills wo people are engaged in negotiations. One manages to accomplish their set goals whilst the second ends the process in disappointment. Does this sound familiar? Successful negotiation depends less on talent and more on being competent in negotiation theory and practical skills. It is just one of the many strategies used in solving conflict situations, based on interests and should be considered as one of the key business processes, being valuable both for a company as well as its clients and business partners. The fact that negotiations are a part of everyday life – we negotiate with our spouses, children, mother-inlaw, colleagues, boss and friends - does not mean they are conducted appropriately. It is important to remember that whether a private business is being started, a job change or a new car being bought, negotiation skills may well be a key to success. Interestingly, despite having to negotiate at work on an everyday basis and being aware of how important the preparation process is, many negotiators do not devote sufficient time to preparation. Professional athletes spend much more time preparing for a competition than at the competition itself. Why should the negotiation process be any different? Successful negotiators first think of themselves and consider what they want to achieve, what they are going to do if they do not reach the final agreement, what
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Two companies from Slavonia are currently assembling of aircraft for the Italian company Alpi Aviation emarkably, the Croatian, or more specifically the Slavonian, economy can today manufacture aircraft and successfully sell them on the European and international market. Naturally, production is not of some supersonic combat aircraft or large commercial planes which rival the American Boeing or European Airbus types. However, the irrefutable fact is that two companies from Croatia are currently assembling aircraft for the Italian company Alpi Avi-
strip is sufficient for take-off or landing. Hence, these aircraft are very much sought after among business people and are mostly marketed to all EU country members as well as Australia and New Zealand. The first Pioneer 400 constructions, ultra-light aircraft with four seats, were manufactured in Štitar last year. With the consent of the Italian partner, a co-operation agreement with Shaft, an Osijek based company, has been established and they will assemble engines with the aircraft. This company specialises in the
ation, which, for several years now, has managed its Croatian subsidiary for the production of their ultra-light Pioneer planes in Štitar. According to Mijo Ćosković, the manager of Alpi Aviation Croatia, some 530 wooden aircraft constructions of this type have been manufactured in Štitar over the last several years. Subsequently, they have been shipped to the parent company in Italy for completion and final distributed worldwide. The wooden construction of every aircraft in the range Pioneer 200 and Pioneer 300 costs between €7,000 and €9,000 with the cost of a fully completed aircraft amounting to €35,000 and €75,000. Each has a range of 1,000 kilometres and is very fuelefficient requiring only 7 litres of Eurosuper. A 300 meters landing
manufacture, maintenance, distribution and representation of ultra-light aircraft engines, motorised hang-gliders and ultralight aircraft as well as other types of light aircraft. Shaft is also the general agent and licensed repair service centre for the Rotax programme, a world renowned manufacturer of aircraft engines BRP-Powertrain GmbH from Austria, a member of the Bombardier corporation. Additionally, Shaft has a new, modernised, refurbished workshop and office space with specialised and standardised tools and equipment, which includes all the original spare parts plus expendable supplies. Through the co-operation of these Croatian companies, the first completed aircraft are scheduled to fly back to Italy.
Svetozar Sarkanjac
R their BATA (the best alternative to agreement) is, as well as the lowest or highest limits to which they would agree. Thereafter, data, arguments and information need to be gathered. External factors and unbiased criteria, to be used for supporting demands and confirmation whether the offer is fair and reasonable or not, are both to be considered. The next step involves an evaluation of the opposite party. The factors, such as the most convenient outcome, possible alternatives, the impact of an unsuccessful negotiation process, their previous engagement in the negotiation process, use of fair-play as well as showing understanding and honesty, should be all taken into consideration. The main goal may be to gather as much information about the opposite party as possible, as well as to determine their view of a specific problem. If the alternative is not as strong as it should be, appropriate improvements need to be determined. Finally it should not be forgotten that successful negotiators are not born – they are developed through thorough and high-quality preparation.
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
www.privredni.hr Business & Finance Weekly
( 9.1%
3
fewer passengers
compared with 2008
( 5.5%
reduction
in cargo transport in 2009
AIR TRANSPORT
Low-cost companies to boost fresh start It is believed the financial crisis represents a great opportunity for the preparation of new air traffic projects Drago Živković
tion of a new terminal building.
he EU-Croatian accession negotiations include Chapter 14 covering Transport Policy which is to be closed by the middle of 2010. Dražen Breglec, State Secretary for Traffic, says that air traffic, being an important aspect of this chapter, has shown significant improvement. He also stresses that the capacities of air traffic in Croatia have been upgraded to such a level that they can be compared with current EU states. The Croatian Civil Aviation Agency has established itself as a credible regulatory body. According to Breglec, the government has fulfilled the preliminary conditions relating to its ability to efficiently control Croatian air space, operators and airports, according to EU standards. The air traffic market, as part of the EU accession process, has to date been mainly based on the implementation of the ECAA treaty, which is currently in force. Various governmental bodies are proceeding with further efforts through bilateral negotiations with several countries which will implement the treaty. This would provide new opportunities for airport operators and air carriers in Croatia. Breglec is convinced that not only passengers but also the airports will reap the benefits, due to an increase in the number of travellers.
Zadar airport believes in its advantages Peović says that management is aware of providing the necessary adjustments for low-cost companies, with which the introduction of most new lines is currently being negotiated. SpainAir is to introduce a new flight to/from Barcelona and easyJet is to introduce six new flights. Norwegian Air Shuttle is to connect Zagreb with Copenhagen although the OsloZagreb flight is still under negotiation. Germanwings has announced the introduction of a new flight to Düsseldorf. The airports in Pula, Zadar and Osijek are facing a grim situation, although their management believe they can maintain their international ranking. Zadar airport promotes tourism development in the area, which has also been recognised by the local community, according to Katica Pupić-Bakrač, General Manager of Zadar airport. The long-term plan includes infrastructure and technological development with the goal of permanently increasing traffic to its maximum capacity. When considering governmental investment, especially in infrastructure and equipment, Pupić-Bakrač believes that they are justified as long as management can generate profit. The Management of Pula airport also believes they should keep their status as a regional international airport. Consistent with trends worldwide, its General Manager, Bruno Rogović, expects that airport security measures will intensify. Thus a higher investment into security systems will become a necessity.
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Adaptation to New Circumstances According to statistical data, both Croatian and European airports experienced crises during the previous year. When compared with 2008, the total number of passengers using Croatian airports
in 2009 decreased by 9.1%, the number of planes by 3.5% and the amount of cargo transported by 5.5%. European airports noted a 6% decrease in the number of passengers and a 14% decrease in the amount of cargo transported. However, it is believed the financial crisis represents a significant opportunity for the preparation of new projects in air traffic as it is expected that the total number of passengers will double by 2030, a challenge for which Croatia needs to prepare, according to Breglec. Olivier Jankovec, Director General of ACI Europe, believes that low-cost airlines are becoming a more dominant business model for European destinations. In his opinion, such companies will take more than 50% of the European market by 2013. According to Jankovec, such a situation offers a great opportunity for Croatia but under one condition – that
airport management should take appropriate decisions relating to their future. The Ministry of Sea, Transport and Infrastructure seems to be following the same route especially when considering Breglec’s announcement that all seven Croatian airports, with the government as majority 55% owner, intend to set development plans. The future seems bright for airports at Zagreb, Split, Rijeka and Dubrovnik, especially taking into consideration the size of the cities and tourist attractions. Tonči Peović, General Manager of Zagreb Airport, claims that the changes, as described by Jankovec, are already taking place at this airport. Hence, the company itself is being restructured in order to increase productivity and flexibility. Further investment into the existing terminal building and runway are being implemented as well as final preparations for the construc-
4 INTERVIEW
Privredni vjesnik Year III No 0104
( 1,057
( €1,005
employed by dm
Average nett salary
Gordana Picek, member, dm Management Board
PEOPLE AS THE MOST IMPORTANT FACTOR Permanent employment is the most valuable asset we can provide for people with disabilities as work supports the concept that any individual is a valuable member of society ous seminars, workshops and development events in different areas, such as management skills, team motivation and team building skills, to name but a few.
Jasminka Filipas he company dm (Drogerie Markt), Croatia, manages 121 stores and has 1,057 employees. It is renowned not only for its high quality products and successful business operations but also for providing substantial salaries to its salespersons, almost double the salary paid by other employers, as well as for its extraordinary approach to employees. According to a recent survey, conducted by the portal MojPosao.net, dm is the most sought-after employer in Croatia. Gordana Picek, a member of the dm Management Board, pointed out the specifics of how dm employees are treated, how personnel policy is created and what future plans will be adopted.
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dm is renowned for employing people with disabilities and supporting various humanitarian causes. There has been an almost permanent increase in sales. In a time of global financial crisis, new stores are being refurbished and new people employed. What is the secret behind its successful business operations? The secret lies in the special care for people and their needs, in the remodelling of the educational system as well as in encouraging each and every employee to contribute to company success through their individual strength and contributions. These fundamental guidelines distinguish us from other employers. How do you motivate your employees? Among other things, our employ-
ees are offered the possibility of internal promotion, which implies that they can be promoted to very high positions, including the Management Board. Furthermore, our dm intern magazine publishes public acknowledgments and commendations. Individual stores which achieve the best sales results, as well as salespersons that correctly solve our knowledge quiz, are rewarded on a regular basis. Employees are presented with quality dm brand products four times a year as well as with a €400 gift certificate for a new born baby. All members of staff and their families are invited to attend a family day. Every year, dm traditionally organises a carnival, where the best mask receives a special prize. dm also employs people with dis abilities. Our company does not measure its success exclusively by revenue growth. On the contrary, as the quality of the relationship towards employees and customers is very important for us, dm
has been providing necessary and significant contributions to people with disabilities for several years. Permanent employment is the most valuable asset we can provide for such people, as work supports the notion that an individual is a valuable member of society. We believe that dm sets a good example for all other market operators. Since 2002, dm has been co-operating with the Association for the Promotion of Inclusion and has been employing people with disabilities on the regular basis. Companies rarely invest into the lifelong education of their employees. How does dm develop its employees? Our employees are regularly offered the possibility to attend specialised seminars, such as an eco-seminar on the estate owned by Željko Mavrović. This specific seminar enables our employees to answer customer queries through more competent answers in the area of healthy food. Moreover, our members of staff attend vari-
What is the average salary of a salesperson? The largest number of staff is employed in stores, with an average nett salary amounting to €1,005. In order to encourage our employees further, we provide them with two additional extra salaries. Extremely well organised business operations as well as excellent relations with our suppliers ensure the fundamentals for such high salaries, which differ considerably from other retail stores. What are dm plans for the future? We intend to retain the leading position among variety stores as well as to maintain the same spreading dynamics of our business operations. The plans mostly relate to opening new stores and a new distribution centre, to the employment of new staff members as well as to support from neighbouring countries. Both qualitative and quantitative expansion is to be supported, which includes the extension of current locations, the introduction of new brands and focusing on organic food products, cosmetics and biodegradable cleaning agents. dm, as a market leader, will set new standards in the years to come. Nevertheless, if the current financial crisis aggravates further, its effects will be felt for sure. However, dm is not overly concerned and believes that it will, together with its customers, find appropriate solution for such a situation.
www.privredni.hr Business & Finance Weekly
5
Mobile Advertising
MOBILE TELEPHONY AS A POSTER Croatia, being ahead of its time, provides an attractive market for advertising Boris Odorčić obile telephones, as one of the most personal of all appliances, have recently become a convenient base for various advertising activities. Aleksandra Schmid, IQ Mobile Regional Manager for South-Eastern Europe, claims that place and time, as the two most important factors, play a crucial role in such advertising. Should a company wish to advertise its products or services on a mobile telephone, it can reach the desired target group at any time and place by sending its marketing message in a simple and direct manner. When considering the Croatian market for mobile telephony advertising, Aleksandra Schmid says that several facts need to be highlighted. Firstly, an average Croat sends 4.2 text messages per day whilst the European average is three short messages. Secondly, within Croatia there are on average 1.38 devices per citizen whereas in Austria this figure is 1.33. Finally, for some time in Croatia, mobile telephones have been used for payment transactions. “Croatia is very much ahead of
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its time in the area of mobile telephony and the media. Hence it provides an attractive market for advertising”, according to Schmid. She also adds that a serious target group, which is open to advertising activities, already exists in Croatia as almost every mobile t e l e phone company allows advertising to appear on its web pages rather than using banner headlines, which
WORKDAY STRESS
OVERCOMING ANXIETY THROUGH SELF-MANAGEMENT cute stress exhausts organs as well as impairing our vital functions. However, such a state of chaos can be overcome and we can start “breathing” in order to regain our life balance. It is important to think positively and develop confidence in oneself and one’s own resources, according to psychologist Jasminka Mužinić Sabol from the company Točka promjene. In order to help employees manage stress at a personal level, a group of experts has developed a multimedia DVD course entitled Stress Management in the Workplace. The course emphasises the importance of efficient stress management in various organisations with the main goal of developing managers in the effective control of both personal and organisational stress in order to prevent and fight off stress caused by work. Stressed employees are less efficient and less motivated which
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causes a decrease in the competitiveness of an individual company, says Sonja Prišćan from Incremedia, the company publishing the DVD. She adds that those companies using this DVD as part of their employee training and development, note a reduction in the level of sick leave, less pronounced fluctuations and an increase in the level of motivation of their staff, improved efficiency and productivity, a higher percentage of talented employee retention, satisfied users as well as an improved image and reputation of the company. (S.P.)
can be read via mobile telephones. IQ Mobile specialises in conducting complete marketing campaigns, which includes the management of micro sites optimised for mobile telephony as well as the transmission of data and details on the number of visits. Its regional manager believes that applications, such as the Apple ‘App Store’ and Nokia ‘Ovi Store’, as well as other forms of banner advertising show great potential among new trends in the area of mobile telephony advertising. Therefore, further growth in the marketing sector is expected in Croatia. According to Schmid, companies should grasp the advantages of advertising in this manner and through text messages more seriously. Although such forms of advertising have noted a certain increase in Croatia, it has not yet reached its full potential. “Advertisers should display more courage and test out the advantages of mobile telephony advertising” concludes Aleksandra Schmidt.
CENTRE FOR MANUFACTURING MECHANICAL ENGINEERING AND TOOLS
EXPORTS AND COMPETITIVENESS INCREASED he revival, development and protection of the Croatian metal working and electrical industry and trades are the primary goals for the Centre for Manufacturing Mechanical Engineering and Tools. This cluster, founded in March 2009, encompasses some 30 members, including several major companies, which are predominantly exporters, such as Končar, Đuro Đaković, Gredelj and Elektrokontakt, to name but four. It also includes some smaller but promising companies and trades as well as the scientific community; the Faculty of Engineering from Rijeka as well as the Mechanical Engineering Faculty from Slavonski Brod are also members. “A significant amount of knowledge still awaits its application in real life. As the synergy of production and science is of major importance, co-operation between industry, research institu-
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tions and development as well as scientific and educational institutions is being developed”, says Vanja Jurić, CMMET manager. Jurić also added that this cluster should contribute to an increase in exports and enhance the competitiveness of the Croatian metal working and electro industry globally which will gain in importance once Croatia enters the EU. One of the goals is also to accelerate and modernise the technological development of its members as well as to create a database to help with local and international networking. Jurić finally stated that the cluster encourages innovation and commercialisation as well as connecting industry and trade. (E.D.)
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Privredni vjesnik Year III No 0104
CROATIAN FOREIGN CURRENCY MARKET Currency
Kuna exchange mid-rate
AUD CAD JPY CHF GBP USD EUR
5,050764 5,424839 5,794281 5,066966 8,329736 5,427675 7,266029
Source: HNB
EUR
USD
5.48
6.4.
7.4.
8.4.
9.4.
CHF
5.09
7.27
5.46
5.08
7.26
5.44
5.07
7.25
5.42
5.06
7.24
5.40
5.05
7.23
WEEK APRIL 10, 2010
::: news
7.28
4.38 6.4.
7.4.
8.4.
9.4.
5.04 6.4.
7.4.
8.4.
9.4.
DUN&BRADSTREET
Crobenz sold to Croatian Petrol INA has sold its 100% share in Crobenz to Croatian Petrol Stations, an associate unit of Progress Trading, a member of the Slavia Capital Group. Crobenz deals in the wholesale and retail trade of oil derivatives. Its retail network includes 14 petrol stations carrying the brand of Crobenz. INA representatives add that the Croatian Competition Agency needs to issue its approval for the sale of Crobenz, with the transaction being completed thereafter. INA: convertible bonds worth €0.20 billion The INA General Assembly has suggested the issue of €0.20 billion of convertible bonds. The majority holders – Mol and the Croatian government – would be entitled to subscribe these convertible bonds, enabling them to trade bonds for shares. Other shareholders would not have priority rights for subscription, as suggested by INA management for the General Assembly, called for May 18. The nominal value of an individual convertible bond would be determined by INA Management. M SAN Group profit of €2.7 million The M SAN Group nett profit for 2009 amounted to €2.7 million, a 34% decrease when compared with 2008. Total income for the Group totalled €0.23 billion, a reduction of 19.2%. M SAN Group total expenditure came in at €0.22 billion, a 19.4% decrease in comparison with the previous year. The company representatives add that the IT products and services market in Croatia showed a decrease of 24% whilst M SAN Group turnover dropped by 7.4%.
Croatia to face further debt Croatian external debt in 2009 amounted to US$60 million according to D&B n the current edition of Dun&Bradstreet monthly periodical International Risk and Payment Review, this provider of credit information for businesses and corporations maintained its rating for Croatia at DB3d, which classifies it as
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D&B foresees that foreign direct investment will not produce the required influx of capital, hence forcing the Croatian government into further indebtedness a country with a low business risk. According to D&B data, 23.5% of payment transactions by Croatian firms to foreign companies were more than 30 days overdue. 65% of payment transactions had been conduct-
ed on time whereas 8.9% were more than 60 days overdue. In addition, 2.2% of transactions were more than 120 days overdue. Hence, D&B recommends foreign investors to secure their business activities with Croatian companies. Due to the loan crisis and a reduction in corporate profitability, payment transactions to foreign partners remain a challenge for Croatian companies. External risk relatively high It is emphasised that Croatian external risk is relatively high, due to the seriousness of the fiscal deficit and the deficit in the balance of payments, which have to be financed on a year-by-year basis, thus exacerbating foreign indebtedness. According to D&B, Croatian external debt in 2009 amounted to US$60 million, and is estimated to increase further during the next two years.
D&B foresees that foreign direct investment will not produce the required influx of capital, hence forcing the Croatian government into further indebtedness. In addition, should the global markets happen to face the same situation as in 2008, Croatia will be forced to require additional help from the International Monetary Fund. This would ensure an influx of fresh capital, but under several conditions, one of which would be a harsher fiscal discipline, which will prolong the economic decline. Convertibility risk, as estimated by D&B, remains low due to interventions by the Croatian National Bank whose role is to maintain a stable kuna/ Euro exchange rate. Slovenia, with DB2c, still holds the highest rating position, followed by Hungary (DB3d), Albania (DB4a), Macedonia (DB4b), Serbia (DB4d) and Bosnia and Herzegovina (DB6a). (V.A.)
www.privredni.hr Business & Finance Weekly
WE PRESENT 7
JUŽNI PROLAZ, ZAGREB
CLAUDIA ZLATO, SVETVINČENAT
A “treasure trove” from Istria In order to brand their own as well as the Croatian trademark in jewellery, the owners wove a story around Croatian motifs
Pure air as a good partner Croatian companies need to become more competitive on foreign markets through developing new welding technologies he metal and welding industry is facing a bright future, regardless of the global financial and economic crisis, which significantly affected the local market. Moreover, Ivo Belan, the manager of Južni prolaz, a company specialising in the distribution of welding machinery used in the absorption of smoke and dust particulates created through welding, grinding and cutting processes in production plants, believes that Croatian companies can become more competitive on the European and international markets through the development of new welding technologies. “The current market situation reflects the influence of the recession which has deeply affected many production industries as well as demand for supporting equipment. In addition to the recession, companies are reluctant to invest into improving their working conditions. Considerable efforts are being made to present all the benefits that investment in this segment can bring. Regrettably, a severe disadvantage lies in the fact that the machinery used for the absorption of smoke and particulates, is usually rather expensive”, explains Belan.
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Banks reluctant to invest into small and medium enterprises This company, founded in 2006, has seven employees, including mechanical engineers and
electricians, who provide current and future clients with help when selecting the most appropriate equipment. They also look after welding technology used in the construction of main pipelines and bridges as well as in the shipbuilding industry. In addition, they also prepare project documentation for ventilation in both new and old production plants. Belan also stresses that this particular aspect of the business is very competitive which motivates his employees to constantly consider and implement work improvements. In terms of banks and their attitude towards enterprises in Croatia, he states that they are reluctant to invest into small and medium enterprises. “We finance all our projects from our own funds, which seriously aggravates our further development. However, such a situation places the company on a healthy and reliable footing. The government provides no incentives for this area of entrepreneurship”, he adds. Their future business activities include more thorough education and development in the area of robotics as well as the opening a small centre for the development of new technologies. “This centre could connect Croatian manufacturers who can apply their knowledge in the development of new products in order to increase their overall level of competitiveness”, concludes Belan. (B.O.)
f your road ever takes you to the small renaissance town of Svetvinčenat in central Istria, which takes exceptional pride in its Grimani fort, two dance festivals and an amusing contest for ‘Miss Goat’ (the goat being the symbol of Istria), be sure to visit a very special jewellery store Claudia zlato. This store is often referred to as a “treasure trove” as the interior, although originally being intended for the sale of gold jewellery, very much resembles a cave. The craft business Claudia zlato was founded in 1994 and currently employs three members of staff. Its business activities primarily relate to the manufacture and sale of gold jewellery as well as retail sales of jewellery, souvenirs, wrist watches and sun glasses, as told by the owner, Jasminka Benazić. The owners were determined to brand their own as well as the Croatian trademark in jewellery and have therefore woven a story around Croatian gold motifs. The idea came to them after they had been commissioned to create the first miniature pendant in the shape of a kažun (a traditional Istria stone storage hut for tools usually found in fields). Eventually, they created other souvenirs and jewellery in the shape of Istria motifs, such as roženica (a traditional pipe instrument), spona (a type of buckle) and an accordion. The innovative designs were introduced in order to represent and protect a part of the Croatian
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tradition. Hence, the craft owners have created 18 carat gold pendants in the shape of Glagolitic alphabet script as well as replicas of traditional Croatian jewellery. Investment into training and development The owners have channelled considerable investment into the training and development of young staff and use both contemporary and traditional manufacturing technologies in jewellery production. “We were convinced that our contemporary, but at the same time traditional products would be of interest for our customers. We also believe that costumers would not only be encouraged to present individual jewellery pieces to people who are important to them, but also that they would promote Croatia worldwide. Our goal is to manufacture all our products locally, which decrease imports and increase exports and employment” says Jasminka Benazić. She also added that they would like to manufacture a new, creative brand whose creative force would bring traditional Croatian products and contemporary elements together. “Our careful observation of market trends ensures a professional and high quality support and enables us to provide advice to our partners and customers. We are proud to point out that our innovative products have been awarded numerous prizes at various local and international exhibitions and fairs”, concludes Jasminka Benazić. (S.P.)
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Privredni vjesnik Year II No 0104
An eye in the sky
€15 MILLION INVESTMENT FOR A €9 BILLION MARKET
::: news €26 million loan for Croatian judiciary The World Bank has granted a €26 million loan to Croatia which is to be used to increase the efficiency of the judiciary, a process which is a prerequisite for accession to the EU. The funding is intended for the modernisation and improvement of three key elements - courts, prosecution and the Ministry of Justice. More specifically, these funds will increase the efficiency of court networks in Split, Karlovac and Pula as well as to modernise court IT systems, accelerate trial procedures and decrease the number of cases which have not been processed, Croatian innovators achieve extraordinary success at “Archimedes” Croatian innovators attended the 13th International Salon of Innovation and Innovation Technologies in Moscow and have been presented with the highest award – a gold statue of Archimedes, as well as with 6 gold and 3 silver medals and 7 special awards. Croatian innovators have now attended the salon for ten consecutive years. The statue of Archimedes was presented to the Croatian Association of Innovators for their entire presentation as well as for organising activities in the area of innovation. Car sales plummet by 29.5% 3,429 new passenger cars were sold this March in Croatia, showing a 16% increase when compared with February this year. However, when compared with the same period previous year, these figures show a decrease of 21.5%, according to the Promocija Plus agency, which based its information on the number of newly registered vehicles. 8,984 cars were sold in the first quarter of 2010, showing a 29.5% decrease when compared with the same period last year.
The founders of Hipersfera maintain it would be easier to attract financial support from the military industry but would like their product to be used for civil purposes and possibly manufactured in Croatia Igor Vukić promotional video, with an hypnotic musical rhythm in the background, shows people in white overalls with anxious expressions on their faces. Suddenly, a fairly large white orb lifts in front of them, which is subsequently directed towards the sky through remote control. This scene is not taken form some SF movie. On the contrary, it is a real event, recorded as promotional material for Hipersfera, a company from Zagreb, run by astrophysicist Bojan Pečnik and economist Robert Grilc. They, with the help of 16 highly educated colleagues, are developing an aircraft which could replace airplanes and satellites used for air surveillance and photography. This promotional video shows their first model which reached a height of a few hundred meters above Zagreb. The final version of the aircraft, which is in fact a balloon filled with helium and powered by four propellers, will be lifted up to 20 kilometres above ground level. According to them, such “an eye in the sky” already has the capacity to hover directly above one spot on Earth and “watch” for a period ranging from two to six weeks.
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Final product to reach the market in three years The orb, with a diameter of 40 meters and weighing about one tonne can carry 100 kilograms of photographic equipment. The final price would be around $3 million. The estimated costs of taking photographs with the orb would amount to €3 per square kilometre whereas satellite and airplane photography costs between €16 and €80 per square kilometre respectively. A further €15 million of investment is required to prepare the aircraft for commercial purposes over the next three years, when
the international market for air photography is estimated to be worth €9 billion. Bojan Pečnik was the first to come up with the idea of the concept, which he developed together with Robert Grilc. They gathered the rest of the team around them and for the last two years these 18 experts in aeronautics, computer science, physics and related scientific branches have been diligently working for some 10 hours per day. €0.68 million has been invested in the project thus far, of which €0.48 million have been invested by BICRO (Business Innovation Centre of Croatia), with the remainder coming from private sources. Mass production in Croatia The project has been kept secret for a considerable time and it was first introduced very recently at the VentureXchange conference. Since then, a few potential local and foreign investors have shown interest in the project. Several external audits have positively graded the whole project. After the first successful experimental photographs taken above
Zagreb, they constructed a new model, which is to break the current world record of 1,850 meters by at least 150 meters. The orb, with a diameter of 40 meters will be the jewel in the crown - it should be able to endure the thin atmosphere, extreme temperatures and UV radiation, which are common at a height of 20 kilometres above the Earth. It is constructed in such a manner that it can be safely landed even if its engines fail. The aircraft itself is patent-protected. The founders of Hipersfera maintain it would be easier to attract financial support from the military industry, although they would like their product to be used for civil purposes. If possible they would like to find financial support in Croatia, where the orb (its components) would be mass-produced locally. This project would also be an incentive to other researchers and entrepreneurs, proving that top results can be achieved in Croatia. They ‘merely’ need to find an investor willing to provide a further €15 million that is necessary for the project to be continued and completed.