Bankruptcy in practice How to speed up bankruptcy proceedings, reduce litigation and unblock court processes: early warning system required
Insolvency At the end of March, €4 billion related to outstanding debt of companies and the public. This is €1.25 billion up year-on-year
Georg Eltz, hotel-tourist group Valamar owner and vicepresident of the tourist sector of the Croatian Employers’ Association
INSOLVENCY
ILLIQUIDITY
INTERVIEW
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Croatian Business & Finance Weekly Established in 1953 Monday / 31st May / 2010 Year III / No 0111 www.privredni.hr
S U P P O R T E D
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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
THE GOLDEN BALANCE SHEET AWARDS
RECESSION CUTS PROFITS BY 75% IN FIRST QUARTER
In relation to 2009, the total number of employed dropped by 1%, income by 10.6% and expenditure by 8.9% Zagerbinspekt – the best balance sheet for 2009 For the second consecutive year, FINA awarded the Golden Balance Sheet Award. This is an award mostly given to the most successful entrepreneurs according to eleven financial indicators in five categories: profitability, liquidity, indebtedness, assets and cost-efficiency. The methodology for defining the financial rating was designed in co-operation with the Zagreb Faculty of Economics. It includes the criterion of good standing, which predicts, with a certain degree of accuracy, possible delays in payments during the following year. Of 91,320 entrepreneurs and VAT payers (companies, excluding banks and insurance agencies), candidates for the Golden Balance Sheet 2010 were the 3,507 entrepreneurs who achieved positive business results in 2009. The Golden Balance Sheet 2009 went to Agrokoka Pula, Solana Pag (salt factory), Diadema, Termo servis, CE-ZA-R, Gabing, Planika obuća (footwear), CroatiaŠped Zagreb, Maslinica, Microsoft Croatia and Zagrebinspekt.
Krešimir Sočković
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ccording to the business analysis for 2009, which the Croatian Financial Agency (FINA), performed as part of the Golden Balance Sheet Awards, in a year of recession the profits earned by Croatian companies has reached its lowest level for the past eight years. Total nett profit of Croatian companies was €0.60 billion last year, some 73% less than the year before. In 2009, of 91,320 entrepreneurs, 59.5% achieved positive results, returning a total of €3.61 billion, with 40.5% entrepreneurs registering losses of €3.01 billion. After 10 years of positive business, with total profits almost exceeding €2.74 billion (achieved in 2007), lossmakers generated virtually the same level of losses as profits of those with positive business results. A year of reductions The Croatian economy was impacted primarily by 430 large enterprises with over 250 employees. They achieved €0.29 billion nett profits, but it is interesting that small enterprises, with no employees, achieved nett losses of €0.16 billion. In relation to 2009, the total number of
employed individuals dropped by 1%, income by 10.6% and expenditure by 8.9%. Pre-tax losses grew by 20.4%, and posttax by 29.8%. Croatian exports decreased by 11.7%, and imports by 24.8%. Only a decrease in the negativity of the balance of trade brings optimism, which plummeted by 63%. Whilst the export deficit in 2008 amounted to €4.32 billion, last year the difference was cut by a mere €1.59 million. Last year, GDP declined by 5.8%, and according to FINA estimations, this was
mainly influenced by the poorest results of Croatian entrepreneurs over the past eight years. Weaker consumer purchasing power had a major influence on the fall. It decreased turnover in retail by 15.3% and in personal consumption by 8.5%. Compared with other global economies, Croatia registered a slight decline in relation to Slovenia, whose economy contacted by 7.4%, but also Japan, which fell 5.9%. However, the economy of the entire EU registered a smaller drop (4.7%) than Croatia.
2 VIEWPOINT
Privredni vjesnik Year III No 0111
STJEPAN CAR, INNOVATORS’ ASSOCIATION
Innovation is created through managers Conditions for innovation in companies are set primarily by managers through policies and management style ho are the people creating innovations and constantly inventing new things? How can we motivate them more and how can we encourage others to join them? This is the goal of the Croatian Innovators’ Association; to promote innovators, their work and their environment. The aim is to create a movement from individual cases, and those who make decisions in politics or companies should pay attention to their effects on the economic development of society. Many jobs today have been created on the basis of innovations, which were created in an independent Croatia. For example in Tehnix (300 employees), HS produkt (1,300 employees), Doking (70 employees), Centrometal (170 employees). Innovators in those companies became entrepreneurs. However, entrepreneurship is a skill which requires different know-how from that concerning innovation in technical areas. The former socialist system had research and development institutes within economic bodies, but those companies, with huge administrations and miserable productivity, gave up their institutes. Not everybody acted in the same manner. Today, Končar is a majority state-owned company, but it does have its research and development centre, the Končar-Institute for Electrotechnics, which lives off market creation, 60% working for the Končar Group and 40% for others in Croatia and abroad. Trams,
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IMPRESSUM: Privredni vjesnik Kačićeva 9 10000 Zagreb +385 1 5600020 uprava@privredni.hr www.privredni-vjesnik.hr/ subscription
( 9,633
over three years old remain unresolved in
BANKRUPTCY IN PRACTICE
HOW TO SP PROCEEDIN Igor Vukić he company Opatija, in bankruptcy, was sold at auction in April for €12.32 million. It was bought by Agrokor, bidding against two other interested parties, raising the opening bid of €2.74 million to a far high level. Finally, all the creditors of the company will be repaid without problems. Shortly thereafter, a similar case materialised. Jadrankomerc from Crikvenica, with eleven outlets, was also taken over by Agrokor for €4.30 million. Also, the textile industry company, Duga Resa, finally received a new owner after 18 auctions during its bankruptcy period. For €4.22 million its owner became the T7 company from Varaždin. At a previous auction, the final bid climbed to €2.70 million, but the buyer failed to pay on time. These are good examples of bankruptcy in practice. Fresh capital is obtained through bankruptcy auctions, which is then repaid to creditors, whilst the new owners continue with production in the bankrupted company. Perhaps this is a start of a new trend. However, it is still believed that
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trains, wind units, monitoring systems, electro-energy equipment, all are products of an orderly and planned development structure. The last aspect is important – planned development, planned innovation for a familiar producer and a familiar market. It is exactly this approach which gives innovators the best results, and it is applied by all. Company managers have a key role in innovating, since they construct the framework for innovation within the working environment, enabling the individual to develop a positive attitude towards creative thinking, and those who create should be rewarded financially. Managers should avoid criticising ideas when assigning problems to creators as well as identifying the idea-makers and providing positive decisions with them; take them out of anonymity.
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COUNSELLOR, INTERNATIONAL OPERATIONS, LANGUAGE EDITOR Ray Fletcher fletcher@privredni.hr
cases
In the first quarter of 2010 by over a quarter, and the l
bankruptcy proceedings start too late, when companies have been exhausted and do not have an opportunity to continue with production. Often, not even the property they have is enough to settle with creditors. Buildings and business facilities are often bank collateral, and they are the first in line for debt collection. Early warning system vital Outstanding debt of other creditors has mainly ended up as a statistic, which registers the accumulation of outstanding debt,
Almost 10,000 cases over three years old With all the difficulties over the past three years, bankruptcy proceedings have been taking, on average, around nine months, which is a reasonable result. This is the case at the Commercial Court, which is in charge of most bankruptcy proceedings. There are 9,633 cases over three years old in the commercial courts, of which 2,819 are in courts of first instance and 6,814 are in the High Commercial Court. These proceedings are mainly encumbered with unsolved property and legal relations. In the first quarter, 22% more new bankruptcies were been registered year-on-year. The level of litigation has increased by 68%. In general, cases of bankruptcy generate further litigation, and when new cases are opened (such as Pevec and Đakovština), the number of creditors, and potential parties in litigation rise into the thousands.
www.privredni.hr Business & Finance Weekly
3
( 22%
commercial courts
more bankruptcies
year-on-year
EED UP BANKRUPTCY GS AND SAVE ASSETS , the number of registered bankruptcies increased evel of litigation is 68% higher year-on-year
One of the announced changes regards reducing advance payments required for initiating bankruptcy proceedings or rather the growth of illiquidity. With the Programme of Economic recovery, the government, aware of this problem, is preparing new regulations which should speed up the initiation and the process of bankruptcy proceedings. They will also try to unburden the courts from bankruptcy proceedings, which follow the start of bankruptcy and distress proceedings. “We want the alarm for going into bankruptcy to be set early, so that it is possible for the company to continue operations after restructuring. Bankruptcy does not have to be the final activity,” noted the Minister of Justice, Ivan Šimonović, announcing recent amendments to the Law on Bankruptcy and speeding up litigation. Amongst the announced amend-
ments, which the task force in the Ministry of Justice should turn into regulations, is also decreasing advance payments required to be paid for initiating bankruptcy proceedings. They are too high and deter creditors from initiating bankruptcy proceedings on time. On the other hand, other court fees would increase in order to reduce excessive litigation. Minister Šimonović evaluated there are many cases where companies postpone paying debts, through initiating litigation and filing appeals, thereby swamping courts with new cases. Amendments to the Law on Bankruptcy should most certainly be accompanied by a wide range of additional measures for unburdening courts, said the president of the High Commercial Court, Mario Vukelić, for Privredni vjesnik. Judges at commercial courts and the HCC have had difficulties in managing bankruptcy proceedings, and if these procedures were to be speeded up, the situation would be even more alarming. In the first quarter of this year, the number of registered bankruptcies exploded by 22%, and the number
€13,700 earned in 15 minutes One of the problems that make bankruptcy proceedings difficult are high legal fees that contribute to longer lasting procedures and their total cost, opines bankruptcy commissioner Marija Holetić. “Lawyers charge expenses, and judges usually approve them since they are calculated according to a valid rate. There are, thus, cases where a lawyer charges €13,700 plus VAT for high value cases, and nothing can be done. If you are not able to settle such an account, since you have lost a case which you were sure you would win, then you are criminally responsible as a bankruptcy commissioner,” stresses Marija Holetić. of litigation processes by 68% over last year. Hence the reason for Vukelić suggesting it is valuable that the government has given its agreement for an increase in the number of judges. The number of bankruptcies would drastically increase if legal provisions on initiating the procedure within 60 days were carried out in tandem, after a company becomes incapable of settling its obligations. This does not happen even with a penal threat to board members, who are obliged by their official duty to do so. Zoran Bohaček, director of the Croatian Bankers Association says that banks regularly report to tax administrations when a company has stopped repaying loan instalments. However, in most cases, these do not result in the timely initiation of court proceedings.
Avoid postponing distress proceedings Marija Holetić believes that despite all difficulties that accompany distress and bankruptcy proceedings, creditors should, without mercy, initiate distress proceedings, immediately after the expiration of the payment deadline. If they do not, they risk losing everything. She ventures that entrepreneurs do not initiate bankruptcy proceedings due to high advance payments that need to be paid when filing for bankruptcy. In most cases, creditors do not do this, since they have unsettled debts and they do not whish to spend additionally, or hope they will be paid, or have some other reason. The government has also noticed the problem of high advance payments, so will probably adjust the figures in the announced package of legislative measures.
Stricter responsibility of administrations Marija Holetić, bankruptcy commissioner from Čakovec, who was in charge of the bankruptcy of MTČ-Factory of Sporting Apparel, the credit co-operative Varaždinski cekin, ITC and Meplast, says that tax administrations have access to giro accounts of all companies, but they have been failing to take action for many years, saying that this is their way of conserving jobs. In practice, administrations suggest bankruptcy only when everything possible is taken from the company, and when workers’ unpaid gross salaries cannot be settled from the remaining assets. She believes that abiding by legal provisions, more assets would be saved. Therefore, the reform should introduce stricter responsibilities for board members to initiate bankruptcy proceedings in a timely manner. According to her experience, first level courts, such as that in Varaždin, process bankruptcy proceedings within an appropriate period, but after appeals, cases spend too much time at the High Commercial Court in Zagreb. In the intervening period, nothing is left of the company and the bankruptcy proceeding becomes absurd.
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Privredni vjesnik Year III No 0111
( 4.6% rise in insolvencies in March over February
INSOLVENCY
Illiquidity consistently rising
At the end of March, a total of €4 billion related to the outstanding debt of companies and the public. This is €1.25 billion up year-on-year Vesna Antonić
A
t the end of March, a total of €4 billion related to the outstanding debt of companies and private individuals in Croatia. This is 4.6% up over February, and 45.4% more year-on-year (as at March 2009). This data was provided by the Financial Agency (FINA), published by the Croatian Chamber of Economy (CCE) in their Economic movements. It is stressed that outstanding debt refers to 66,922 organisations employ-
lion at the end of March. The number increased by 3.2%, in relation to February. Year-on-year the number of such companies has increased by 6,853 or 31.3%. During the first two months of 2010, the numbers employed in these companies was smaller compared with December 2009, but in March it rose by 10.4%, or some 4,500 people, in relation to February. Compared with March 2009, the number of unemployed is 19.9% higher, or 7,938 people. In relation to February, the level
Unpaid taxes and contributions Regarding unpaid taxes and contributions, these totalled €1.5 billion in March. On a monthly basis, this is a 4.5% rise, and 45.6% rise year-on-year. Moreover, their share in the structure of total debts is falling for the third consecutive month, currently standing at 48.6%, compared with 50.4% in March 2009. Regarding unsettled debts, three sectors continue to dominate (a share of 71.3%, and €2.3 billion), of which 34% refers to trade, 19.6% to the processing industry and 17.7% to construction. ing 72,147 staff. In March, the number of insolvent companies, goods delivered but unpaid and unemployed workers continued
Trade, processing industry and construction still dominate the structure of outstanding debts to rise, with more rapid dynamics in relation to the previous two months. Simultaneously, private individuals registered a growing trend in all three segments, albeit with slower dynamics in relation to companies, evaluate the CCE analysts. High monthly increase Regarding insolvent companies, 28,749 (employing 47,781 staff) had unsettled debts of €3.3 bil-
of unsettled debt reached €152 million (+5%) over March, and some €1 billion (+51%) yearon-year. CCE analysts point out that the number of insolvent tradespeople also increased. In March, they totalled 38,173, a 2% rise over February, and a 16.3% rise year-on-year. They employ 24,366 staff or 15.3% more compared with M a r c h 2009. R e -
State companies owe some €125 million Total outstanding debt of public companies halved from €277 million last year to less than €125 million, according to the Ministry of Finance. Moreover, most public companies, in addition to unsettled debts, have even larger debts from their suppliers. This means they are owed more than they owe, and are taking all necessary measures in order to settle their debts, points out the Ministry. For example, Croatian Motorways and Roads had a total of €87.5 million in outstanding debt at the end of 2009, which was settled at the end of April 2010, and currently have no unsettled debts. garding tradespeople, they accounted for €750 million of unsettled debts in March, an increase of 2.5% in a month, and 25% year-on-year. These data point to the conclusion that illiquidity is rising remorselessly. Therefore, it is expected that the recent government measures will contribute to halting negative trends (payment obligation within 60 days by the end of this year, and payment obligation within 45 days next year), evaluate CCE analysts.
www.privredni.hr Business & Finance Weekly
INTERVIEW 5
( €41 millionn annually invested
( €123 million
annual turnover of Valamar
GEORG ELTZ, CO-OWNER OF THE HOTEL-TOURIST GROUP VALAMAR AND VICE-PRESIDENT OF THE TOURIST SECTOR OF THE CROATIAN EMPLOYERS’ ASSOCIATION
The policy of reducing prices is more damaging than useful Tourists accept high prices for products in Italy but not in Croatia. Therefore, I see potential for Croatia regarding the development of sub-brands, which are not related to the inherited concept of cheap destinations Jozo Vrdoljak
Group together with the cities in which we work, achieve a taxable income of €27.4 million. Our annual turnover stands at approximately €123 million. I am amazed that we, as investors, encounter a series of absurd legal disputes, which last too long. I believe in the future of Croatian tourism, but would like it if returns on investment were over a much shorter period.
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rivredni vjesnik discussed the state of the hotel sector and the future of Croatian tourism with George Eltz, co-owner of the hoteltourist group Valamar and vicepresident of the tourist sector of the Croatian Employers’ Association (HUP). What kind of a tourist season do you anticipate? We are aware the season will be challenging, and that is why we expect the same results as last year. We anticipate a mild increase in the arrival of individual guests, whilst we have indications of a 10% or more reduction in the case of tour-operators. This is mainly the result of changes to our business policy, and therefore we expect solid demand for our top quality products. As usual, May and June holiday periods are the main generators of demand, and it will be harder this year to fill capacity in June. Concerning the main tourist season, there should not be any changes. Are pre-season problems caused by inconvenient and scattered holidays? The main reason for these problems is that Croatian tourism does not have sufficiently developed offers for both pre-season and post-season. There are more hotels now that offer wellness, recreational and other services for the pre-season and post-season, but our global concept is poor. In the long term, it has been proven that the policy of reducing prices
is more damaging than useful. It is logical that the price of €30 for a bed for the pre-season and postseason is not the best advertisement, when the same costs €100 during the main season. Various additional services should be offered to targeted groups outside the main season. We, in Valamar have managed to do a good job targeting the demographics of pensioners during the post season, and tennis lovers in the preseason, but this is still not enough. We need more ideas and investment. As an investor from abroad, can you evaluate the entrepreneurial climate in Croatia? Croatia is the eighth country in which I have performed business in various roles. I can say that I have not come across so many problems as is the case in Croatia. During the past six to seven years, we have invested €0.14 billion in the reconstruction of hotels and
raising quality; had we not done that, in the short-term sense, we would have perished, just as other investors in Croatian tourism. It is important that things have started to take a more positive turn, and that investors’ obstacles have been identified. Therefore I hope that we and our colleagues who invest in tourism will manage to secure a return on our investment. We are hoping we will not face any problems regarding the fulfilment of our obligations and that we will not end up being owned by banks. For example, the Valamar
What is the image of Croatia as a tourist destination? Croatia has problems due to the inherited image of a cheap destination from the past. This image is especially linked to Dalmatia. Additionally, the war contributed to depicting its image as problematic. In the post-war period we did not manage to achieve a level of service equal in quality and the same price as in Italy. Tourists accept high prices for products in Italy, but not in Croatia. Therefore, I see potential for Croatia in the development of sub-brands, which are not linked to this image, such as Istria, some middle Dalmatian islands, or Dubrovnik. This could be the generator of development for the entire tourist sector.
Concluding investment in Valamar Do you plan to invest in nautical tourism or any other aspects of tourism? Nautical tourism is a great contributor to Croatia’s tourist image. For now we plan to finish investing in the Valamar Group, so we are not considering other investment apart from that which we have already started. If I had been able to invest in cruise liners, I would have become rich, since the return on investment in this segment is 25%, but only 2% in the hotel business.
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Privredni vjesnik Year III No 0111
CROATIAN FOREIGN CURRENCY MARKET Currency
Kuna exchange mid-rate
AUD CAD JPY CHF GBP USD EUR
5,001460 5,599075 6,417885 5,090496 8,526790 5,852635 7,263112
Source: HNB
EUR
USD
5.95
25.5.
26.5.
27.5.
28.5.
CHF
5.14
7.28
5.93
5.12
7.27
5.91
5.10
7.26
5.89
5.08
7.25
5.87
5.06
7.24 24.5.
WEEK MAY 29, 2010
::: news
7.29
4.85 24.5.
25.5.
26.5.
27.5.
28.5.
5.04 24.5.
25.5.
26.5.
27.5.
28.5.
CROATIAN BANK PROFITABILITY FOR Q1 OF 2010
Outstanding state debt increases by €0.51 billion According to latest data provided by the Croatian National Bank, outstanding state debt increased by €0.51 billion (8.4%) since the beginning of the year. In March indebtedness increased by €0.26 billion. On a year-onyear level, lending continues to fall, decreasing by 0.4%, although bank credit registered a slight rise (0.5%), being some €0.32 billion higher (1%) on a quarterly basis. M San Group issues eighth tranche of commercial paper The M San Group redeemed the seventh tranche of commercial paper due last week, with a value of €1.7 million. On 21st May, the company issued its eighth tranche with a value of €1.24 million, and a redemption period of 364 days. Investors in the commercial paper were insurance companies with 55.2%, banks with 42%, investment funds with 1.6% and other investors with 1.2%. The tranche will be listed on the regular market of the Zagreb Stock Exchange, whilst Privredna banka Zagreb will be the agent of the issue and lead dealer. Nava bank to issue new shares in June Nava bank plans to issue €4.11 million of shares in June, for which a group of investors from Austria and Germany have shown interest, according to the Bank’s statement to the Zagreb Stock Exchange. However they point out that it is not possible to predict the potential for a takeover to occur, since the issue will be made public. The existing shares were last traded on 12 April at a price of €13.
Gross profits of €0.17 billion
Of 32 banks profits were made by 25 with 7 registering losses of €6.19 million Vesna Antonić ccording to preliminary and unrevised data for credit institutions published by the Croatian National Bank, banks in Croatia achieved pre-tax profits of €0.16 billion, in the first quarter of 2010. This is 9.6% less on a year-on-year basis. When data for the two savings banks and five housing savings banks are added, total pre-tax profits equate to over €0.17 billion in the first quarter. Of 32 banks, profits were generated by 25 with 7 registering losses of €6.19 million. This figure relates to Bank Kovanica, Croatia bank, Karlovačka bank, Kreditna bank Zagreb, Nava bank, Primorska and Veneto bank.
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Zagrebačka banka holds the lead position with the highest pre-tax profit, €47.73 million, followed by Privredna banka Zagreb with €31.43 million. These are followed by Raif-
Assets stood at €51.23 billion, 1.12% down from the end of 2009 feisenbank Austria (€20.59 million), Erste&Steiermärkische Bank (€20.18 million), AlpeAdria-Bank (€18.52 million) and Societe Generale-Splitska banka (€12.83 million). Hrvatska poštanska banka (The Croatian Postal Bank) showed a gross profit of €4.81 million compared with a loss of €6.58 mil-
lion for the same period of 2009. Assets totalled €51.23 billion at the end of March, some 1.12% less than at the end of last year. On this measure, Zagrebačka banka also leads with €12.59 billion, (a 24.15% share), a 0.98% fall in relation to the end of 2009. Privredna banka Zagreb with assets of €8.56 billion, (16.42% share), shows a 3.93% drop. Erste&Steiermärkische Bank has assets of €6.54 billion, (12.55% share), and a 2.83% drop, Raiffeisenbank Austria, €5.36 billion, (10.29% share) fell 0.84%. Hypo Alpe-Adria-Bank had assets of €5.35 billion, (a 10.27% share) but a 0.82% rise in assets in relation to the end of 2009. Societe Generale-Splitska bank trails with assets of €3.77 billion, (a 7.23% share), and a 0.67% drop.
www.privredni.hr Business & Finance Weekly
WE PRESENT 7
ŠIPUN, VRBNIK
A rose amongst wines
ŠKRILA, STARA BAŠKA ON KRK
The wines of Dobrinčić are marketed under the name Šipun, the archaic term for a rose
Peace on the Amber island
Visitors have the possibility of hiking and cycling paths and scuba diving ven though the family Dobrinčić has been producing wine for generations, they waited until 1999 before their first commercial harvest and the young agronomist Ivica Dobrinčić marketed his first bottles of žlahtina. In addition to producing wines, Dobrinčić has been successfully operating a nursery and producing vine grafts. The nursery spreads across 2.5 ha. and uses high quality German materials. The Dobrinčić wines are marketed under the name Šipun, the archaic term for a rose. The rose is the trade mark of the wines and is found on each bottle. The owner of Šipun markets some 30,000 bottles of žlahtina, and the fact that it has been listed in the renowned wine guides of serious Croatian white wines for several consecutive years, proves its quality. The owner of Šipun is the proud winner of the gold medal at Sabatina 2005 for his 2004 žlahtina vintage.
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The time for sansigot The company is well-known for its production based on indigenous varieties. In the nursery, special attention is paid to the žlahtina of Vrbnik, and the some-
what forgotten red indigenous sansigot varietal. Dobrinčić planted 0.5 ha of sansigot, and in the next year he expects the first wine produced from this almost unknown variety, which Dobrinčić believes can achieve excellent results. However, žlahtina, as the most famous trade mark of Vrbnik remains the basis of the Šipun company. The majority of their production is marketed locally and in certain Zagreb restaurants. “However, since we are constantly planting new vineyards which will soon yield results we have started to turn to other markets,” points out Ivica Dobrinčić. For now, he is pleased with the results from the Split area, and has plans to penetrate the Dubrovnik market and those of regional countries. “We are working intensively on this, since we believe we have a realistic chance in those markets. These are based on an increasing interest from neighbouring countries. Moreover, we also visit and exhibit at significant fairs and events, so have already been recognised by aficionados,” explains Dobrinčić. They intend to invest in the construction of a modern cellar which has recently been impossible due to the Act on the organisation of the sea belt. (J.V.)
krila – the white stone typical of islands such as Krk and Rab, was the inspiration for the name of the auto-camp, situated a kilometre from Stara Baška on the island of Krk. However, this island is also known as the island of Amber, as legend has it that griffon vultures flying over the Kvarner dropped amber from their beaks (which turned into the škrila stone), and this is how these and several other islands emerged in the Kvarner Bay. Even though the camp is predominantly situated within a thick pine wood a part, with ten new mobile homes is located on the rocky terrain of Krk. Campers and other weekend visitors from Rijeka and Zagreb, who come to one of the four beaches of which one is intended for nudism, enjoy sunbathing on pebble or sand beaches and swimming in crystal clear sea. The camp was founded in 1986 as a parking space near the beaches, said marketing manager, Darko Mrakovčić. In the second half of the 90’s, it was the fastest growing camp in the County of Primorje and Gorski kotar. Today, it has a capacity of 1,000 campers. Within the camp, there is a restaurant, a beach restaurant, store, market, laundry room, and three
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sanitary blocks, of which one is for people with special needs. Mobile homes are the future “Even though our camp being intended for quiet holidays, campers (who mainly come from Slovenia and the Czech Republic) can also enjoy hiking and cycling as well as scuba diving in attractive locations. We are also proud of our local gastronomy. In Stara Baška, Baška and Punat, there are restaurants with a complete menu of fish, sea food, prosciutto and cheese. Furthermore, campers who come to Škrila this year will be able to enjoy a massage on the beach organised by the camp, pointed out Mrakovčić. The joint owners will continue to invest in the camp, aware that Stara Baška needs a camp of the highest category. “Keeping abreast of world camping trends, we conclude that mobile homes are the future for camping, and we will soon acquire more units to accommodate our campers,” noted Mrakovčić. (S.P.)
8 ::: news CNB: Unemployment drops In March, the unemployment rate stood at 19.2% on a year-on-year level, whilst the number of employed decreased over the same period by 5.1%, according to the latest Bulletin of the Croatian National Bank (CNB). According to reports of the Croatian Employment Service (HZZ), monthly growth in unemployed totalled 0.3% in March (318,658 people). On a year-on-year level, this exceeds 19%. Data provided by the Croatian Institute for Pension Insurance (CIPI) show that the number of employed fell in March, by 5.1% on a year-onyear level. The Central Bank points to a more extensive balancing of salaries during the economic recession. Therefore, the average gross salary was 1.8% lower in March, on a year-on year level and nett salaries decreased by 1.4%. Ina and MOL invest KM150 million in Energopetrol The Sarajevo oil company E n e rg o p e t rol received additional capital from the CroatianHungarian Consortium Ina-MOL, which should have invested in Energopetrol KM150 million by 28 March. The Finance Minister of the Federation of B&H Vjekoslav Bevanda, confirmed that obligations from the contract on the additional capitalisation of Energopetrol were completely fulfilled, also confirmed by the independent accounting company Deloitte. Industrial finished goods continue to decrease According to data provided by the Central Bureau for Statistics, the supplies of finished industrial products were 10.2% lower at the end of April in relation to the previous month. In April, supplies of finished industrial products continued to decrease on a year-on-year level for the eleventh consecutive month. On a monthly level, output in April was 2.6% lower in relation to March. Compared with the average of finished industrial products for 2009, the figure fell by 7.1% at the end of April 2010.
Privredni vjesnik Year II No 0111
( 99% of team building events performed for foreign companies
Team building - a necessity or not?
Functional activities Local tourist agencies, who organise team building programmes, keep up with European and global trends, claims the director of the Croatian Travel Agencies Association (UHPA), Željko Trezner
Sanja Plješa t the very mention of team building, some are more than sceptical believing it to be merely a trend. Others say such a combination of entertainment and sports contributes to greater company productivity. Furthermore, employees participate in valuable games and team work, where decisiveness and rapid reactions are often the keys to success, as in business. Late spring and early autumn are ideal for organising such trips. Vesna Pritchard Scholz, Board President of the Zagreb Tourist Agency Globtour Event, specialising, amongst other things, in team building, says the agency organises almost 99% of team building programmes for foreign companies in Croatia. Prices are agreed directly with the client,
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since such events are organised to fit user needs. High service standards Local tourist agencies organising team building programmes, keep up with European and global trends, claims the director of the Croatian Travel Agencies Association (UHPA), Željko Trezner. Unfortunately, due to the economic crisis, most companies have virtually stopped all events during the past year. In the EU, team building is important, and employees invest considerably in improving their communication skills. In most countries, it is quite normal for psychologists to organise special activities, studying the reactions of workers within the company. Based on the results, they better understand their personalities. The analyses are then sent to the employer, in
Bachelor nights in Sveta Nedjelja In Sveta Nedjelja, near Zagreb, the centre Paintball&Adrenalin has been opened, where team building programmes are organised. Some €100,000 was invested in the only centre of this type in Croatia, promotes its owner, Tomislav Jakopač. In co-operation with tourist agencies and according to company requirements, team building is also organised in other locations, for example, in Istria. It is interesting that many foreigners, especially English, visit the Paintball&Adrenalin centre in Sveta Nedjelja, where they organise bachelor nights.
order to point out how employees may be better employed, and in which direction their career should go, pointed out Trezner. In addition to the usual entertainment programmes, modern team building events offered by Croatian Agencies include a photo safari, kayak safari, treasure hunt, team Olympics, film team building, paintball, archery, activities in adrenalin parks and sailing. Incentive journeys Due to its cultural and historic values, Croatia has great potential as a destination for organising team building programmes for foreign companies. Tomislav Kuliš, project manager of the tourist agency Venevent, says that foreign companies send their employees to Croatia through incentive trips. “Some 65% of our clients are foreign who attend these trips, attend conferences and various gatherings within Croatia,” said Kuliš. His agency organises team building activities in Istria, Dalmatia, Slavonia and Međimurje. Those who understand their value to the company, continue with team building, since this approach improves their work in the company and business, concluded Kuliš.