PV International 0110 by NEstar

Croatian market has become too small Solaris has constantly embraced technology to move forward

Complying with a plethora of regulations Some 80 different local and international regulations apply to the paint and varnish trade

Boris Golob, EFQM (European Excellence Assessor) Anyone can learn how to be innovative and make money

SOLAR POWER

PAINT AND VARNISH TRADE

INTERVIEW

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Croatian Business & Finance Weekly Established in 1953 Monday / 24th May / 2010 Year III / No 0110 www.privredni.hr

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pvinternational pv international C R O A T I A N

C H A M B E R

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ECOFIN COMMENTS ON CROATIAN ECONOMIC SITUATION

SUPPORT FOR RECOVERY PROGRAMME The current situation in Croatia requires the rapid reform of the administration in order to provide the population with full value for money invested. Welfare reform is also suggested Lada Stipić Niseteo cofin, the Economic and Financial Affairs Council, is the only EU organisation in which EU candidate countries participate on equal terms with full members. Once a year, ministers discuss fiscal and economic policies in general. Interestingly, its conclusions are never made public. On the contrary, they, with very few others, are classified as confidential in EU Council archives.

Competitiveness and reform The main reason for such a situation is that the Republic of Turkey refuses to release the evaluation of its fiscal policies and economic situation. Council meetings are valuable as its members discuss the contents of the Pre-Accession Economic Programme for 2010 – 2011 as preparation for Croatia and future candidates for full EU membership. Croatia sent its programme to the European Commission in January, 2010. According to Ivan Šuker, Minister of Finance and Deputy Prime Minister, both this and the Economic Recovery Plan have been positively rated. The topic of fiscal policy has

been opened at the same time, as EU members discussed the various proposals of the European Commission on EU financial recovery and reconnection. The proposal contains some controversial points, such as suggestion that draft national budgets should be discussed within Ecofin before being adopted by national Parliaments, which has obviously been caused by the current situation in Greece. Some members have not welcomed the idea as they believe such a decision contests the sovereignty rights of individual countries. Šuker describes this decision as a “faux

pas”. However, if other members agree such a step is required in order to control budget expenditure in a more efficient manner, there is no reason why it should not be accepted by Croatia. Croatia will be ready to introduce a tax on banking transactions, providing that the EU adopts the same legislation. In this case, EU membership will oblige Croatia to abide by such a decision. The European Commission, as part of its spring assessment of economic trends, expressed its opinion on candidate countries. According to the report, Croatia awaits growth in GDP, which this year will remain

around zero. However, the analysis indicates the current budget will be very difficult to balance, requiring a new, more realistic revision. The report cautions that medium- and long-term plans are not adequate and states that the current situation in Croatia requires the rapid reform of the administration in order to provide the population with full value for money invested. Welfare system reform is also suggested, in order to introduce adequate measures for economic recovery. In comparison with other EU members, Šuker believes that the current situation in Croatia, as long as budget deficit and public debt are considered, is far better. The most serious problem Croatia is currently facing is further external indebtedness. He says that competitiveness “will depend on the willingness to implement structural reforms” and adds the Government Economic Recovery Programme plans to increase Croatian competitiveness. Croatia will know how to appropriately use financial help from EU funds and there is ample time for preparation. Šuker believes that EU funds will provide Croatia with a higher level of funding than estimated by several pessimists.

2 VIEWPOINT

Privredni vjesnik Year III No 0110

LJUBO GLIBOTA, OWNER, MA.CO.T GROUP

SOLARIS, NOVIGRAD

Solar energy for large warehouses Future plans include energy projects for various customers plus energy engineering he sale and demand for salt in the Mediterranean market during the winter months often leads to poor quality raw salt products containing a high percentage of humidity. Hence, salt treatment and its sale is considered a demanding process. The Ma.Co.T facilities for salt treatment therefore consist of large warehouses which are completely filled with salt during the summer months when salt is dried more quickly. The construction of a new warehouse in the Čaporice business zone, significantly improves and ensures a regular flow of salt for Bosnia and Herzegovina as well as some parts of Croatia. A change in deadlines regarding invitations to tender would most certainly facilitate easier business operations for salt manufacturers and suppliers. If such invitations are announced on time, business activities could be conducted in a more organised manner. Due to unpredictable weather conditions, consignees usually place orders for smaller salt quantities, causing their stocks to diminish rather quickly. One possible solution might be that the Government constructs central storehouses which would account for at least 30% of total consumption with the other 70% being regarded as the responsibility of suppliers. Ma.Co.T plans to expand its business activities into the energy industry and play a more significant role in this expanding market segment. New projects include the construction of

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rotating solar panels which follow the movement of the sun as well as the construction of classic solar panels on the roofs of the new buildings. The new pilot project includes the construction of a modern power plant using solar energy. Energy engineering and energy projects for various customers are also planned. Our optimism is based on the fact that solar energy in Croatia is currently not as wellcapitalised upon as it should be. Although similar facilities may be found near the Rijeka highway, this branch of industry is severely neglected, especially when one considers the potential in Croatia and the advantages Croatian markets have to offer. Ma.Co.T is just one example of good practice which should be recognised by the Croatian government and allowed its full potential. It is illogical that Spain, Bavaria and most Scandinavian countries already have a long tradition of using solar energy whilst Croatia, notwithstanding the enormous number of sun hours per year, has not seriously introduced this branch of industry. Ma.Co.T representatives have signed a contract with Spanish partners with the aim of introducing the latest technology for photovoltaic modules. The remaining problems are somewhat insignificant, as the price of currently rather expensive equipment will surely decrease. Return on investment depends on the number of sun hours and according to the Ma.Co.T studies this period should be between 8 and 11 years.

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

Croatian market has become too small Since 1999, Solaris has constantly embraced technological innovations and boosted production. This has resulted in the most modern and efficient photovoltaic modules on the market Jozo Vrdoljak he ‘Zlatni ključ’ (Golden key award) for 2009, recognition for the most successful Croatian exporter, has been awarded to Solaris, a just and appropriate gift for its 10th anniversary. This company which is under joint Italian-Croatian ownership, has been awarded as the Best Medium-sized Croatian Exporter as well as the Best Italian Exporter. Its business activities primarily cover the manufacture and sale of photovoltaic modules and equipment. Since 1999, Solaris has constantly embraced technological innovations and boosted production. This has resulted in the most modern and efficient photovoltaic modules on the market. The company employs 135 staff in the output of an annual production of 55 megawatts of photovoltaic modules. “We are currently implementing the second part of our investment plan, which will increase production capacity to 80 megawatts. As Solaris follows international ecological trends, its production of photovoltaic modules as well as the application of ecologically acceptable technologies contribute both to energy and to nature preservation”, says Branko Hanžek, Solaris manager. The manufacturing process is currently located within two plants and the construction of a

third is also planned. Total investment is estimated to be more than € 8 million. More success on the international market Although Solaris products are well-known in many countries in Europe and worldwide, they are not so popular in Croatia. “Despite the convenient geographic position, our manufacturing processes, knowledge, plus the educated professionals and legislative framework inside Croatia which could ensure solar systems are connected to the electric grid, there are still no power plants operational. In order to enhance our potential, it should be stressed that the Croatian Energy Sector Development Strategy foresees a total of 45 MW of energy from solar plants by 2020. As this would engage Solaris for only six months, it is no surprise that we are oriented towards exports”, says Hanžek. “Our company is flourishing as its business activities relate to renewable energy resources. The increasing and constant demand is most assuredly the generator of our development. Considering the international energy market situation and forthcoming Croatian accession to the EU, it is reasonable to expect the company will maintain the same level of growth as in the past”, concludes Hanžek.

www.privredni.hr Business & Finance Weekly

(

( 20-30%

Croatian merchants

decrease

in total sales showed in last year

involved in the paint and varnish sector

PAINT AND VARNISH TRADE

Complying with a plethora of regulations Some 80 different local and international regulations apply to the paint and varnish trade which even lawyers consider far too complex Drago Živković ue to accelerated Croatian accession to the EU, local entrepreneurs currently have to face a bewildering array of new regulations which are not only not standardised but are sometimes even contradictory, as they were adopted in haste. There is scarcely an area of business which is currently not facing problems. The chemical industry, especially the manufacture of paint and varnish, is considered to be one of the most burdened industrial branches. It is regulated by REACH, one of the most comprehensive frameworks in EU legislative history. Although paint and varnish manufacturers and merchants are not directly obligated to comply with REACH, they have to share the expenses related to the registration of particular chemicals. Finally, customers feel price increases, which are not helping the industry, already significantly stricken by the global financial crisis.

How to recycle containers Both Raul Širola, the head of the Paint and Varnish Manufacturers Group in CCE, as well as Bernard Brežanski, the Management Board President of the Association of Paint and Varnish Merchants, agree that the decrease in the paint and varnish trade over the last year is estimated to be 20% to 30%, due to the crisis which affected the real estate market. Both manufacturers and merchants face similar problems, one of the most serious being recycling of containers. According to legislation, paint and varnish manufacturers are obliged to dispose of containers. However, it is also proscribed

that containers are to be collected by merchants. It remains unclear how empty containers are to be stored as shops, specialised in selling varnish and paint, are not registered to provide warehouse services for such waste. Brežanski believes that further regulations should be adopted whereas Government representatives claim manufacturers and merchants should reach a mutual agreement. However merchants cannot implement the proscribed legislation as they would have to provide different bins for each provider. A blessing in disguise is that most customers are unfamil-

iar with the fact that containers can be returned to merchants. Harmful or not The Government considers paint and varnish, dried in their containers, as harmful waste whilst manufacturers claim that paint and varnish applied to any surface may be considered harmful, by extension. On the other hand, merchants believe such vague regulations are typical of hastily adopted EU legislation, which has merely been translated and never fully applied in real life. This problem relates not only to entrepreneurs, but also to government, since inspectors

The Association to fight dumping The Association of Paint and Varnish Merchants, founded two years ago, currently encompasses 20 of 200 Croatian merchants dealing with varnish and paint. The sector employs between 1,000 and 2,000 individuals. The Association has been formed as a direct response to price-dumping the Pevec merchant chain tried to impose two years ago. Another reason was the almost non-existent level of communication between merchants and government representatives as well as a vast number of regulations, whose adoption merchants could not have influenced in any way.

are unclear on how to interpret certain rules. So far, they have merely warned merchants and proposed a certain adjustment period, according to Brežanski. On the other hand, Širola believes the Croatian government is on the verge of solving the problem, as it is required to adopt technical regulations only. The Paint and Varnish Manufacturers Group members maintain excellent communication both with the Ministry of Health and Social Welfare and the Croatian State Inspectorate. As manufacturers’ remarks are currently under consideration, Širola believes that the recycling problems will soon be resolved. However, Croatian small entrepreneurs, trading in paint and varnish, should be all-round experts, as a plethora of rules and regulations apply to this industrial branch. When the official website of the Croatian Institute for Toxicology is consulted, some 80 different regulations can be identified. Even professionals describe such a situation as more than a little complex, let alone merchants.

4 INTERVIEW

Privredni vjesnik Year III No 0110

( 36% of historically significant innovations have been determined through small business

BORIS GOLOB, EFQM (EUROPEAN EXCELLENCE ASSESSOR)

Anyone can learn how to be innovative and make their products lucrative An idea is not innovative if it merely wins a medal at a fair but when the final product reaches the market and proves to be of value to customers, company and society Eleonora Dukavac ccording to Boris Golob, EFQM (European Excellence Assessor) and the author of the e-book entitled Innovations – how to market your ideas, there is no survival without innovation. Hence, everyone is obliged to be innovative. Both management and innovation procedures are an exact science. These same procedures are currently being used to re-establish not just the US publishing and media industry but to boost the largest and most successful companies, such as Microsoft, Motorola, Samsung and HP. Golob adds that free newspapers, reasonable taxi prices and aero-

plane tickets, bakeries without flour and banks without tellers windows are mainly the result of innovations related to business models. How important are new products, services and business models for the economy? If existing products and services are not constantly improved or new, advanced business activities are not introduced, the business model would remain old-fashioned and inefficient. The first result of innovation is competitiveness, followed by further growth and profitability. The recipe for success is rather simple and includes the improvement of older products, services or business activities or the creation of new ones. An adequate number of customers ready to pay for and use the final product is a prerequisite, also. However, the challenges of simple recipes usually lie in their implementation. Innovation problems are the same, wherever one goes: entrepreneurs are usually unfamiliar with the know-how, are not ready to ask for help and are mostly not open-minded towards change. Even when the innovation process is started,

How relevant is funding Can companies afford to be innovative even when not having largescale investment at their disposal or cannot afford overly long capital return cycles? Most certainly. Some innovation procedures do not require a high level of investment and show immediate benefits. For example, income innovation on the basis of current supply does not require high investment – innovation can apply to new business activities, technology processes and the value system. Such a procedure can result in innovations which do not require new products or resources but result in a quick and relatively simple change. the risk of failure is very high. Further growth can sometimes be limited by previous success as well as by the fact that examples of good innovation practice contradict management and the conduct of regular business activities. How would you describe trends and experiences in Croatia and other countries? “Innovation” is a very trendy word – both in Croatia and worldwide. It is commonly agreed that innovation is a key factor for the success of any company and a source of prosperity both for the community and the nation. Here ends any similarity between Croatia and the international economy. In Croatia, innovations and innovators are related more to creativity, technology and inventors than to markets, buyers, company and profit. Innovation, internationally speaking, relates to a new product, which has been established on the market and has influenced society in a certain manner. If such criteria are applied, innovations and innovators are almost non-existent in Croatia. On the other hand, inventors are very creative geniuses who are not related to innovators in any way. An idea is

not innovative if it merely wins a medal at a fair, but when the final product reaches the market and proves to be valuable for customers, company and society. What would the greatest advantages in the area of innovations be? The greatest advantage would lie in the ability of final users and customers to solve the existing problem very cheaply or even free of charge. On the other hand, the company which provides the services should be able to make a significant profit. It should be provided with an opportunity to develop and create new jobs. The best example would be Google, although the innovation process does not necessarily include such large companies. How can an average Croatian entrepreneur generate profit from innovations? Any entrepreneur can profit from innovations, providing that they are open-minded, are not afraid to try something new and are ready to change their business activities as well as their behaviour. There is no business area where innovations are not welcome or where they can cause any damage.

www.privredni.hr Business & Finance Weekly

( 12 Croatian companies already conducting business

BUSINESS FORUM CROATIA-IRAQ

Looking for new business contacts Croatian companies will enter the Iraqi market via the Autonomous Federal Entity of Kurdistan, currently the safest part of the country and also one of the largest construction sites Igor Vukić he business forum on new business opportunities in Iraqi Kurdistan held recently was so well attended that it was difficult to find any free space. More than 100 Croatian companies attended the event, organised by the Croatian Chamber of Economy and the Ministry of Foreign Affairs. Dara Jalil AlHayat, President of the Kurdistan Federation of Chambers of Commerce, headed the large business delegation from this vast Iraqi province. Al-Hayat invited the representatives of Croatian companies to maintain the excellent level of co-operation, established at the time of former Yugoslavia. He pointed out that many Turkish, Korean, Japanese and EU companies have already started their business activities in the area. However, there are also ample opportunities for Croatian companies, which he remembers for providing high quality service. There are currently 12 Croatian companies conducting business activities in the area and the fo-

rum provided a contact point for representatives from the construction and timber industry as well as furniture manufacturers. Power-supply engineers, manufacturers of farming machinery, pharmacists and representatives from the textile industry held expert conferences simultaneously. Further expansion of co-operation yet to come “Raw materials, oil, gas, phosphates and sulphur provide Iraq with the ample funds necessary

for large reconstruction projects after the war. Croatian companies will enter the Iraqi market through the Autonomous Federal Entity of Kurdistan which is currently the safest part of the country and also one of the largest construction sites. Roads and hospitals are currently under construction, railways are being renovated and new projects related to infrastructure and power-supply systems are being developed”, emphasises Jerko Vukas, Croatian Ambassador in Baghdad. For the

past two years, Jasim Daher has been in charge of the Croatian House in Erbil, established by Ingra, Elka, Flexo, TEP and various other Croatian companies which provide services to the Kurdistan area. The House provides a meeting point for the exchange of new business propositions. Daher says they are open to cooperation with other Croatian companies that will be provided with all necessary information to commence business activities in Iraqi Kurdistan, completely free of charge. Co-operation between the Kurdistan Federation of Chambers of Commerce and the CCE has been confirmed by the signing of a memorandum of mutual understanding, which will ensure a better exchange of information on business opportunities in both countries. “I invite all Croatian companies to contact us if they wish to offer their business activities in Kurdistan and Iraq. We will provide them with appropriate contacts and information on technical details required from the outset”, points out Dunja Konjevod, CCE Managing Director.

::: news Ina shows the highest revenue figure Even with a 26% decrease in income, the Croatian oil company Ina, still shows the highest level of income for 2009, amounting to €2.69 billion according to the list of 50 largest Croatian companies compiled in “Lider” weekly. Ina was followed by the sales chain Konzum, whose income for 2009 totalled €1.72 billion, a 0.7% decrease. HEP (Croatian electric power supplier) was in third place with a total income of €1.67 billion, a 7.5% increase over 2008.

Pension funds worth €4.56 billion At the end of April, the second pillar assets of all insured persons reached €4.35 billion, showing a 0.21% increase in comparison with March 2010. Three of the four pension funds showed a favourable balance, with an average year-to-year income return of 5.16%. When considering individual funds return, AZ compulsory pension fund rose 5.1%, Erste Plavi 5.56%, PBZ-Croatia 4.58% and Raiffeisen compulsory pension fund 5.38%.Total assets in voluntary pension funds in

April totalled €0.18 billion with average year-to-year income returns ranging from 2.51% to 9.38%. Closed-end voluntary pension funds account for €33.80 million, giving total assets in all pension funds of €4.56 billion. CBS: April unemployment rate 17.9% According to the Central Bureau of Statistics, the unemployment rate for April stood at 17.9%, a 0.5% decrease in comparison with the March figure of 18.4%, which was the highest level of registered unemployment over

the last four years. On a yearto-year level, the April figure shows an increase of 3.1% in relation to the previous year, when it stood at 14.8%. At the end of April 2010, 308,675 unemployed persons were registered, a fall of 9,983 or 3.1% in comparison with the previous month. Considering April 2009, the unemployment rate has increased by 17%.

Privredni vjesnik Year III No 0110

CROATIAN FOREIGN CURRENCY MARKET Currency

Kuna exchange mid-rate

AUD CAD JPY CHF GBP USD EUR

4,817862 5,452866 6,434769 5,049245 8,355209 5,798431 7,264854

Source: HNB

WEEK MAY 22, 2010

EUR

7.28

USD

5.96

19.5.

20.5.

21.5.

22.5.

5.20

7.27

5.92

5.18

7.26

5.88

5.14

7.25

5.84

5.10

7.24

5.80

5.06

7.23 18.5

CHF

4.76 18.5

19.5.

20.5.

21.5.

22.5.

5.02 18.5

19.5.

20.5.

21.5.

22.5.

ANNUAL EBRD ASSEMBLY

EBRD to remain in Croatia So far, EBRD has invested more than €2 billion into Croatia. An additional €100 million of new contracts signed during the annual assembly Igor Vukić homas Mirow, EBRD president, confirmed at the Annual Assembly in Zagreb that EBRD will remain in Croatia as several sectors, which are to be rapidly developed, require its assistance. This bank has so far invested some €2.2 billion in Croatia in order to support projects in both the public and private sectors. Mirow emphasises that EBRD is to provide not only loans but also technical help, especially in the tourism industry, energy sector and ecology, agriculture and infrastructure. Its rôle also includes enhancing the competitiveness of small and medium companies with an additional €94 million of contracts which were signed at the conference. Together with GTC Grupa, EBRD will co-finance the construction of a shopping mall in Osijek with a value of €40 million. Privredna Banka Zagreb (PBZ) has been granted €20 million which, together with PBZ funds, is intended for small and medium companies. With €25 million at their disposal, the Croatian subsidiaries of Raiffeisen Bank are to encourage foreign trade and regional projects. EBRD granted a further €12 million to be used for expanding Šibenik port and support to the orphanage in Tuškanac, Zagreb with €120,000. Ivica Todorić, the owner of the largest Croatian company Agrokor, announced its co-operation with the bank, which includes a €200 million

acquisition in Russia, related to the meat industry. Better opportunities for investors Representatives of the Croatian government welcomed EBRD intentions and promised to ensure even better opportunities for international and local investors. Prime Minister Jadranka Kosor confirmed the establishment of a special office whose main goal would be to identify any obstacles related to investment and to propose solutions for their urgent elimination. She reiterated that the government is currently implementing measures necessary to solve the financial crisis. “This includes the implementation of harsh, but necessary measures, as we need to attract new investors and encourage a new investment cycle”, says Kosor.

EBRD experts estimate that Croatia shows steady progress in the implementation of structural and institutional measures at this key stage of EU accession negotiations. However, further steps are required, especially regarding the development of the business environment, privatisation of government-owned companies, the commercialisation of infrastructure as well as an increase in the professionalism and flexibility of the workforce. As more than 2,000 bankers, politicians and businesspeople attended the EBRD Assembly, the Croatian government presented them with a special catalogue of attractive investment projects. It contains innovative companies with great market potential, a list of infrastructural and logistical possibilities, plans related to the energy sector and the tourism industry, as

well as a list of hotel companies in excellent locations, which need a fresh influx of capital and strategic partners for their future development. New business zones, with the required infrastructure, ready to welcome any company wishing to commence business activities in Croatia were also presented at the Assembly. The catalogue was prepared by APIU (Trade and Investment Promotion Agency). In addition, EBRD estimates that Croatian GDP will increase by 0.3 and 1.8% in 2010 and 2011 respectively. Croatian weak spots lie in the public sector which has not been reformed and a high foreign currency risk. Croatia, as well as other countries from the region, will have to find a new economic model, since the old one, based on foreign loans and personal consumption, has been found to be inoperable.

www.privredni.hr Business & Finance Weekly

WE PRESENT 7

GIPA-ART, ZAGREB

AGRICULTURE AND TOURIST VENTURE MIR, OPATIJA

The concept of design debased by competition

A perfect combination of sustainable tourism and agriculture ipa-Art from Zagreb is involved in graphic and promotional activities as well as offering public relations services. Since its creation in 1994, this company has developed projects for a variety of well-known international companies and institutions. Marijan Puhovski, Gipa-Art manager, believes the current financial crisis provides companies with new challenges and possibilities. Hence, Gipa-Art is currently promoting new investment possibilities in Croatia with the aim of attracting new capital and encouraging local manufacture. “These projects are developed in co-operation with the ‘investitor.org blog’ as well as well-known economic consultants. We would like to develop business activities related to marketing programmes, brand development and graphic design. Our plans include marketing Croatian tourism and culture with promotional tools that are new to the region and which will contribute to the overall presentation of the deep Croatian tourist and cultural heritage” adds Puhovski.

Only small promotional services available on the market When Gipa-Art started its activities, competition was more than ‘stimulating’. However, various “agencies”, without the necessary professional knowledge at their disposal, have since been established on the market. “Such competition has debased the con-

cept of design, which can be seen in the material available on the market”, says Puhovski. As the result of globalisation, large international agencies have opened subsidiaries in Croatia, which primarily represent large multinational companies and their

The company is promoting new investment possibilities in Croatia with the aim of attracting new capital and encouraging local manufacture marketing activities “Such agencies outsource to smaller ones only small promotional services”, he adds. In co-operation with the School of Design, Gipa-Art used to provide professional training for graphic design students who were provided with an opportunity to accumulate professional experience. “For a number of years, young professionals were provided with an excellent starting point which enabled them to find excellent jobs in reputable agencies. I am very proud of some designers, who took their first professional steps in Gipa-Art and are now highly regarded professionals, working for large agencies both in Croatia and abroad. Several have also received significant awards for their work”, notes Puhovski. (B.O.)

ir, the agriculture and tourist venture from Opatija, is currently the only co-operative in Croatia whose activities include the promotion of ecologically acceptable management of natural, cultural and historical resources. In addition, it develops tourist activities which ensure a balanced relationship between people with nature, specifically regarding island life, in rural areas and in areas of special state concern.

Development projects According to Dražen Deranja, Mir manager, its main activity relates to project development for local and regional government, family-run farms, farms which provide agricultural tourism facilities, as well as other co-operatives. “Our programmes include ecological and sustainable agricultural production, the creation and promotion of several Croatian local products and the development of rural, eco-, cultural and historical, wine and food tourism. This implies the development and construction of small and family-run hotels which respect both traditional architecture and the gastronomy of the area”, emphasises Deranja. Since its establishment in 2005, the venture has developed projects for 24 districts in Primorsko-goranska, Osječkobaranjska, Koprivničkokriževačka, Zagrebačka and Zadarska counties. Project development includes co-operation with

various institutions, s u c h as the Croatian Academy of Sciences and Art, a crosssection of local and international faculties and institutions as well as the relevant ministries. Mir representatives have also signed an agency contract with UniFood Ltd. 2000 from Israel, a globally renowned manufacturer of seeds, fruit and vegetables as well as of equipment for vegetable and fruit farming. In addition, an agency contract has been signed with Fortex-AGS from the Czech Republic, which is one of the most prominent European manufacturers of water purification equipment. The Mir venture, in addition to preparing international projects, such as The Strategy

The venture has proposed development projects for 24 local districts in 5 counties of Renewable Sources in Serbia, closely co-operates with the Croatian Chamber of Economy and the Croatian Chamber of Trades and Crafts. Thus, in 2005, CCE and Mir presented Croatian wine manufacturers at the international wine fair Inter Fest in Novi Sad. Many other joint projects are also currently being developed. (J.F.)

Privredni vjesnik Year II No 0110

::: news Nexe Grupa: A percentage of 2009 income to be used as legal reserve Last year, Nexe Grupa posted a €0.92 million profit. The General Assembly reached a decision on retaining €462,000 as legal reserves, with €0.88 million being used as a reserve for their redeemed shares. As stated in the GA report published on the Zagreb Stock Exchange, shareholders reached a decision on share division. This means that each NEXE-R-A share, with a current face value of €27.4, will be divided into 20, €1.37 shares. HT shareholders received share dividends According to a decision by the General Assembly, some 250,000 shareholders in Hrvatski Telekom (HT) received a dividend of €4.66 per share, €0.37 billion having been set aside for this purpose. The dividend applies to those shareholders who, at the time of the General Assembly, were registered in the depository of the Central Depository and Clearing Company. Industrial turnover decreased in March

121 YEARS OF TOURISM ON ISLAND RAB

The island of love and happiness With more than 2,500 hours of sun per year, Rab boasts a 121 year tradition as a tourist and health resort Sanja Plješa he island of Rab is considered to be one of the first Croatian tourist centres in the northern Adriatic, as its history as a tourist and health resort dates back to 1889. With 2,500 hours of sun per year, Rab has a very suitable climate at its disposal. Shortly after this island had been declared a tourist destination, the first hotels were constructed and organised

Total March turnover for Croatian industry showed a decrease of 8.5%, when compared with March 2009. New orders decreased by 25.6% on a yearon-year level according to the Central Bureau of Statistics (CBS). Statistics for the first quarter of 2010 show that total industrial turnover and new orders decreased by 9.9% and 16.1% respectively in comparison with the same period in 2009. On a monthly level, total seasonally adjusted data for March 2010 increased by 2.7% in comparison with February, although noting a 1.6% increase on the domestic and a 1.7% increase on the foreign market.

tourism was conducted, which ensured the future for local inhabitants. Rab has been awarded on multiple occasions as the most developed tourist resort on the Croatian Adriatic coast. “Rab is also known by its Illyrian and Liburnian name ‘Felix Arba’ (the Island of Happiness). It is the 9th largest Adriatic island, and has been visited by numerous politicians, actors, kings and princes, for example Edward VIII and his future wife, Wallis Simpson, who anchored their yacht near the town of Banjol”, says Nedjeljko Mikelić, director of the Rab Tourist Board. Rab has been called the island of love since that occasion, he adds. Visitors can select between seven hotels, two camps, two ACI marinas, lodgings, villas, self-catering apartments and private accommodation encompassing

more than 27,000 beds. Most of the hotels are owned by the tourist company Imperial which has invested significant amounts into the renovation of the four-star Imperial hotel. The well-indented and diverse Rab archipelago offers its visitors and sport-lovers a wide variety of activities for an active holiday, ranging from wellness and 80 kilometres of cycling tracks to 100 kilometres of promenades and four diving centres. There is a geo-park with a learning pathway, Premužićeva staza, dating from around the 1930’s. It was named after Ante Premužić, designer and constructor of woodland and mountaineering paths. The island provides visitors not only varied sport, cultural and entertainment facilities but also a broad culinary range, including the renowned Rab cake from an 800 year old recipe.

Rab awarded QualityCoast The Coastal and Marine Union, an EU project co-founded by 11 members, has rewarded Rab with its ‘QualityCoast’ award. The basic goal of this organisation includes the networking of coastal destinations that maintain similar systems of value and good practice within sustainable tourism development. Rab is the first destination in Croatia and this region of Europe which to be presented with such an award.