Interview: Goran Markulin, director, Cromaris (Adris Grupa) Little or nothing has been invested in marine aquaculture for years
New trends in industry and closer contacts with EU New possibilities for technological investment into industry
GFK survey Savings up, lending down This decade has shown an increase in authorised overdraft limits
INTERVIEW
INDUSTRY
GFK SURVEY
PAGE 3
PAGE 4-5
PAGE 7
Croatian Business & Finance Weekly Established in 1953 Monday / 5th July / 2010 Year III / No 0115 www.privredni.hr
S U P P O R T E D
Eight months as an ideal period The closure of the Competition Policy depends on four measures, the most important one regarding shipyards, as it requires “full compliance with regulations related to governmental subsidies”. In other words, shipyards are not to enjoy budgetary benefits if this chapter is expected to be closed any time soon. As the Judiciary and Fundamental Rights regulations are rather general, it will be interesting to note how many changes separate Croatia from an ‘ideal country’, ready to become a full EU member. The reform of the Judiciary System is not expected to end until early spring of the following year. This particular chapter requires the full implementation of Strategy and Action Plan for the reform of justice, “achieving required levels of independence, competence, neutrality and professionalism”, a more efficient judiciary system, a more determined process in the area of war crimes as well as providing clear evidence of anti-corruption measures. In other words, the EU expects exercising final judgements and enforcing more order in “the sensitive sector such as public procurement”. Zagreb has only eight months to prove it has enhanced corruption prevention and conflicts of interest, improved the status of minorities, solved the status of refugees as well as improved laws regulating Human Rights.
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 EU MEMBERSHIP NEGOTIATIONS
FINAL STEPS TOWARDS FULL MEMBERSHIP Hungary, as the presiding country, hopes to end the negotiation process and organise the closing of the Treaty of Accession Lada Stipić Niseteo
A
fter almost five years of negotiations, Croatia has finally opened the final three chapters and closed a further two, which currently amounts to 20. The measures and preconditions for opening and closing individual chapters amount to an astonishing 127, of which 104 are ready to be closed. Individual measures made particular chapters easier to close than to open. Chapters were opened according to plans whereas they were closed after the implementation of required measures. The chapter relating to Judiciary and Fundamental Rights, inaugurated in this last round of the accession process, proves that both the opening and closure of each chapter is a somewhat difficult process, making this round of negotiations even more complex. EU Enlargement Commissioner, Štefan Füle, believes this is the “Chapter of all Chapters”, as it relates less to modifications of the law but more to the constitution of a democratic state, based on laws. Croatia still needs to improve its image in this particular area if it expects to become a full EU member. “This particular chapter regulates the relationship of an individual country and its population. When this chapter is closed,
This indicates that Croatia is to implement the necessary changes by February or March, 2011, when this chapter is expected to be closed Croatians will enjoy justice, fair trials, services of transparent and efficient institutions as well as their fundamental rights. After its closure, EU members will be convinced that the law will be fully respected”, says Füle. This indicates that Croatia is to implement the necessary changes by February or March, 2011, when this chapter is expected to be closed. However, one remark
is of significant importance, as it indicates a change in perception. Miguel Angelo Moratinos, the Spanish Minister of Foreign Affairs, stated that “Croatia has made a final step towards full EU membership”. The Croatian government has accepted the fact that Croatia will become a full EU member next year rather than 2010. Hungary, as the presiding country, hopes to end the negotiation process and organise the closing of the Treaty of Accession. The European Commission has already taken the final steps. The framework deadlines regarding the finalisation of the negotiation process as well as the conclusion of the Treaty will become more accurate. Only then will a final date for accession be set. “Final dates depend on the members and not the Commission”, concluded the EU Enlargement Commissioner. However, this does not end the whole procedure as Croatia needs to hold a referendum on accession. The Croatian government will have to put significant effort into convincing its rather sceptical citizens to enter the Union both at a time of global financial crisis and the fact that Croatia is perceived as being treated differently from those (less-prepared) countries already within the Union
2 VIEWPOINT
Privredni vjesnik Year III No 0115
TOMAS PUKLJAK, DIRECTOR, FUJITSU CROATIA
A lot is said about ecology, but to what extent are we really aware of the problems For many years, IT has been offering green products, but only a few people in Croatia take them seriously
IMPRESSUM: Privredni vjesnik Kačićeva 9 10000 Zagreb +385 1 5600020 uprava@privredni.hr www.privredni-vjesnik.hr/ subscription
PRICES FOR ENERGY RESOURCES MUST RISE If the harmonisation of prices with the market environment is late, this makes the process harder and more painful, says Nataša Vujec Igor Vukić
I
n order to decrease gas emissions, it is important to immediately start promoting broader use of products and services based on state-of-theart technology of higher energy efficiency and environmental protection as well as greater use of renewable energy resources. As much as ecological affairs are becoming increasingly commonplace, most people are still not aware of the gravity of the situation. It is impossible to achieve significant improvements overnight, whilst current activities are only a start of a long term and highly demanding as well as expensive process. In an attempt to achieve significant results, long term planning of ecological initiatives is becoming an important part of business strategies of socially responsible companies. Considering that IT technology will be one of the most important technologies for obtaining desired ecological improvements, its use will gain greater importance in the future. Although the direct share of the ICT sector is responsible for only 2% of the entire global emissions of carbon dioxide, it is precisely the ICT sector that has the potential to contribute to the reduction of gas emissions to the remaining 98%. Today, the progress of IT affects the economy, our life style and society as a whole. We are already in a position where society cannot function easily without ICT. In Croatia, ecological awareness is still not up to a satisfying level, and poorly defined legislature makes a large
HOW TO EXIT THE CRISIS
T
contribution. Whilst certain other countries have, some time ago raised the awareness of energy efficiency, rational use of energy and its effect on the protection of the eco-system, in Croatia it has been completely normal until recently to regulate temperature in a flat by opening the windows. For many years, IT has been offering green products with higher energy efficiency, which enables precise saving, but few in Croatia take these into account. It is a fact that developed technologies requires immense funding for their further development. The production technology is often expensive and the end product is pricier, but it is undoubtedly cost effective and contributes to the preservation of the eco-system. It is not enough that only socially responsible companies promote innovative technologies. A legal framework with clearly defined incentives needs to exist for their wider use.
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
he prices of energy resources need to be corrected constantly, since the postponement of this process creates unsustainable differences in relation to market values, pointed out Nataša Vujec, State Secretary for the energy industry in the Ministry of Economy, at a round table during the discussion on how to exit the crisis organised by the Croatian European Movement last week. According to Vujec, the correction assumes that prices need to rise for certain categories, for example, households. On the other hand, they should stagnate or fall for industry in order to preserve company competitiveness. The process should be continuous, since adjustments can be painful if they are brought in too late, said Nataša Vujec. The State Secretary added there are highquality plans for energy projects
in Croatia, with funding for them, but it seems that everyone is waiting for HEP (Croatian Power Industry) to be privatised prior to commencement. Can it be concluded that there will be a significant price rise by the end of the year for electricity and gas for households, and more favourable prices for industry? It is difficult to say what will be decided, but analyses by energy experts and the Croatian Energy Agency show this is the way to proceed. If the prices in Croatia
are not corrected, there will be no new investment in energy power plants. New investors and the development of the energy market would give a strong and positive boost to the entire economy. Why is energy price rise being discussed if HEP achieved solid profitability during the first part of the year, according to business reports? HEP should not be punished for its good results. There has been heavy rain this year and hydropower plants produced large
If prices are not corrected there will be no new investment in energy power plants quantities of electricity at acceptable prices. Whilst farmers suffered damage from the rain, HEP achieved a large profit. I have already talked about the need to harmonise prices with the market environment. HEP needs to invest its profits in the creation of energy projects, for example hydro-power plants. Plans have already been set for them. There is funding and there are plans. What are the main obstacles for the achievement of these projects? The main problem is eco-organisation, which often, in an unsuitable manner, turns the public against such projects. Local communities are also often a great obstacle due to the slow process of issuing location and other permits. Within local communities, people sometimes do not see the use for hydro-power plants and other energy plants, from jobs, better traffic connections, infrastructural renovation and better environmental protection with new funding. I hope in future such projects will be treated more realistically at a local level, since they will contribute to a more rapid exit from the crisis.
www.privredni.hr Business & Finance Weekly
(
INTERVIEW NTERV 3
from 1,500 to 5,000 tones
of fish is the planned increase in production
INTERVIEW: GORAN MARKULIN, DIRECTOR, CROMARIS (ADRIS GRUPA)
Little or nothing has been invested in marine aquaculture for years Through new investment, Cromaris intends to become one of the leading producers and exporters of fish and fish products on the Mediterranean Boris Odorčić
Nevertheless administrative obstacles are still present. In order for Croatian companies to have an equal opportunity to succeed, the level of state aid needs to be at least identical to that in other competitor countries (Italy and Greece), where state aid is quite substantial.
C
romaris, the Croatian leader in marine aquaculture, which operates in conjunction with the Adris Group, has recently opened three new fish outlets in the Zagreb markets managing today a network of seven such shops in Croatia. By 2012, the plan is to open a further 13 shops in Croatia, and the plan is to invest €21 million during the next five years in order to increase production from 1,500 to 5,000 tonnes. They would then become one of the leading producers and exporters of fish and fish products in the Mediterranean. Goran Markulin, director of Cromaris, points out that the development of retail stores of Cromaris started in order to gain more control of the product from production to consumer. How would you evaluate Croatian marine aquaculture? Croatian marine aquaculture was one of the pioneers in Europe over 30 years. Unfortunately, little or nothing has been invested in this industry and this is where Croatia is seriously lagging behind in a technological as well as marketing-sales segment. The advantages of marine aquaculture
Do you think that projects such as a fish exchange are required in Croatia? Fish exchanges were quite popular in neighbouring countries some time ago. Today, communication has developed so much that it is a question of whether sales could improve in this manner. in Croatia are the proximity to all large markets, especially the Italian, the purity and quality of the sea and the perception of quality Adriatic fish on foreign markets. The disadvantage is that the sea is colder than in Greece, for example, which is the biggest producer of sea bass and sea bream, which helps with its cultivation cycle and decreases expenditure. Furthermore, our disadvantage is that we did not keep up with world trends in the industry, and are now lagging behind the competition.
It will be better after EU accession What do you expect after EU accession? EU accession will bring better positioning of our producers to their markets. Customs will be abolished, which still exists today. Customs on fish food will be abolished, which the producers pay today, even though there are no local producers of fish food. Moreover, when the market becomes a reality and the customs regime simpler, it will mean faster and cheaper delivery of our fish to EU markets. Naturally, competition will increase in segments where it still has not. In general, EU accession will bring the industry more positive results in relation to the current situation.
Is the consumption of fish growing or falling in Croatia? Consumption is growing. Today, consumption per capita in Croatia ranges between 8 and 9 kilograms, whilst the EU average is around 20 kilograms. Fish products are ‘trendy’ since they are a part of healthy nutrition. Intensive growth is expected in Croatia and in general. However, the growth rate will be lower in west European markets since greater fish consumption is already present there. Is marine aquaculture a lucrative business in Croatia? Profitability in marine aquaculture primarily depends on the success of company strategy and business efficiency. In general the industry is complex, but has potential. There are certain initiatives from the state for helping marine aquaculture. From subsidies to co-financing of certain research projects or similar are some of the measures with which the state encourages this branch.
Is Croatian fish recognisable as a brand? Croatian fish is recognisable to some degree and is regarded as fish of higher quality than in Greece or Turkey. However, it is only locally recognisable in certain segments of particular markets. A lot more work is required to build a recognisable brand. What are your relations with competitors? Our biggest competitors on the foreign market are producers from Italy, Greece and Turkey. They are big producers with abundant know-how and strong infrastructure. In addition to foreign producers, there are several respectable Croatian producers of white fish. Competition amongst the biggest producers is dependable and fair in principle. Unfortunately, in Croatia and on other markets, parts of the trade perform illegally. It is our goal to help state institutions to fight this state of affairs.
4
Privredni vjesnik Year III No 0115
NEW TRENDS IN INDUSTRY A
NEW BOOST FOR DALMATINSKA ZAGORA
New pos technolo
An educated workforce and a sm Igor Vukić n 1995, when Siemens invested into Energetski transformatori, this Končar owned company employed 147 people and total income amounted to 20 million German marks. After 15 years, Končar ENT, which is majority-owned by Siemens, manages almost 500 employees, total income amounts to €172 million and its products and knowledge are exported to 80 different countries worldwide. Croatian accession to EU membership has once more encouraged foreign investors to show interest in all sectors of the Croatian economy, including industry. At recently held forums, German and Italian companies showed considerable interest despite many Croatians showing a lack of concern for this industrial sector.
I
Sinj and Trilj attractive to entrepreneurs Dalmatinska zagora is experiencing a new economic boost and attracting more investors to its economic zones Eleonora Dukovac almatinska zagora is experiencing a new economic boost and attracting more and more investors to its economic zones Kukuzovac near Sinj and Čaporice in Trilj. The region offers considerable investment possibilities, as presented last week in Zagreb. The advantages of Kukuzovac lie in its reasonable land prices, quality infrastructure, low-cost utility charges, an uncomplicated set of administrative procedures as well as its convenient geographical position near Split, the Zagreb-Split motorway and Split airport. Its economic zone is one of the largest in Croatia, covering 157 hectares. According to APIU (Trade and Investment Promotion Agency), Kukuzovac is one of nine most important economic zones in Croatia. The importance of this project is even more emphasised by the support from the Croatian government, the Ministry of Economy, Labour and Entrepreneurship, the Trade and Investment Promotion Agency (APIU), the Croatian Chamber of Economy, ACInD (European project Adriatic Cooperation for Industrial Development), Splitsko-dalmat-
D
inska county as well as the city of Sinj. As this zone is to be built in three stages, investors currently have 60 hectares of land with full infrastructure at their disposal. 22 companies, mainly manufacturers employing more than 550 people, already conduct business activities on some 20 hectares. New potential welcome “The new policies are co-ordinated with the economy and are based on knowledge, ability and economic principles. The prosperity of this region lies in networking and the joint efforts, as many local people have lost their jobs when large companies closed their doors”, says Ivica Glavan, the mayor of Sinj. This economic zone is ready to approve an investment within three months. According to Glavan, new investors for the local racecourse are also welcome, as in the recent past the city of Sinj had no financial gain from it. The construction of an hotel and stables for some 300 thoroughbred horses is also planned. A rather hulking plant, Dalmatinka, is soon to be sold to a potential German investor, raising the price of this poorly-operating factory. The reconstruction of an old bar-
racks and two nursing homes for senior and disabled citizens is to start in the near future. Companies already operating The economic zone of Čaporica near Trilj will cover over 46 hectares and will be built in two stages. €4.11 million has already been invested in the area and companies operating there manage some 200 employees. Plans for this zone comprise repair shops, warehouses, ecological plants, shops, wholesale trades, showrooms and banks to name a few. The Zone, conveniently situated near major roads, has full utility services. “Many large companies, such as Cetinka, Dalmatinka and SMS, have gone out of business, causing local people to lose their jobs. This economic zone is to offer new vacancies for these people and revive the region economically “, says Ivan Šipić, the mayor of Trilj. This region has much to offer in terms of tourism and gastronomy, as pointed out at the economic forum, organised by the Zagreb Association of former Sinj dwellers, APIU and MINGORP (Ministry of Economy, Labour and Entrepreneurship).
Investment initiate progress The Croatian processing industry needs a new investment cycle as well as fresh investment to ensure technological revival. According to Maruška Vizek
Croatia has a lot to offer especially in the high technology sector and Marina Tkalec from the Zagreb Institute of Economics, Croatian industry, due to already well-known circumstances, is no longer competitive in terms of technological development. Whereas in 1997 high technology production accounted for 28% of total value added, this percentage had fallen to 23.7% by 2007. On the other hand, medium-level technology production (including shipbuilding) increased from 19.2% to 21.6%. The share of low technology
www.privredni.hr Business & Finance Weekly
5
AND CLOSER CONTACTS WITH EU
ssibilities for ogical investment into industry
mall area for manufacturing facilities are eas to find in one of the existing business zones
Considerable interest in energy sector projects At recent forums held in Milan and Zagreb, Italian investors showed a high level of interest in projects in the energy sector and for the construction of a lowland railway to Rijeka. There is also considerable interest for investment into renewable energy sources, such as the Italian investment into Solaris from Novigrad and the manufacture of solar panels. Solaris exports most of its products to Italy. It currently employs 140 well educated staff, who are, on average, only 28 years old. also increased from 52.3% to 54.7%. Although both the Croatian and European processing industries account for a similar share of GDP (15.1% and 17.1% respectively), European high technology production shows a considerably higher percentage: in 2007, it amounted to 44.9% in Europe whilst in Croatia it accounted for 23.7%. The question is whether investment, related to EU accession, can encourage a positive technological trend in Croatia or not. Participants at a recent German/ Croatian forum believe they can. Karl Kellerhoff, Senior Vicepresident of EADS, the largest European aeronautical company,
stated that EADS has already inspected several Croatian companies in order to co-operate in the near future. “We have inspected different companies and are positively surprised to find highly educated employees”, says Kellerhoff. If direct co-operation is not possible, Croatian companies may work with one of the 20,000 EADS suppliers, as they have already been encouraged to look for profitable manufacturers in south-eastern Europe. Hence, EADS suppliers already co-operate with several small and medium-sized companies in Bosnia and Herzegovina. Mladen Fogec, Chairman of the Board of directors, says that Siemens Croatia already develops
high technology production at its Jankomir facility and emphasises the valuable work of its software engineers. The Jankomir facility manufactures thermal and pressure sensors and exports all its products to many countries. Siemens employs 450 highly educated software engineers who create programmes for Siemens subsidiaries worldwide. “We employ smart, educated people who should form the basis for any level of development” says Fogec. Together with Končar-Energetski transformatori, recently awarded with the Zlatni ključ (“Golden Key”) as the best Croatian large exporter, the Siemens Group exports total more than €200 million. Lower costs Elektrokontakt shows similar examples of good practice. “Not many people know that if they buy Elektrolux, Bosch or Miele stoves, they support local production in Žitnjak plants”, says Vladimir Ferdelji, Chairman of the Board of Directors. This company has been a
part of EGO, a German/Swiss Group, since 1993. 11 years ago, it was 10th largest company in the Group according to the number of employees. Today, it is positioned in second place and manages 1,400 employees. Total income amounts to €70 million with 90% of total production being exported globally. In January 2010, the production of electric switches was moved to Zagreb from Switzerland as Croatian plants manage the same levels of automation and the highly educated workforce is significantly cheaper. “This contract would never have been signed had our company not been innovative and had it not implemented new trends in production technology”, says Ferdelji. According to Sani Ljubunčić, Managing Director of the Trade and Investment Promotion Agency, Croatia has much to offer, especially to investors in the area of high technology. They require an educated workforce and a small area for manufacturing facilities which are easy to find in one of the existing business zones. However, foreign investors respect scheduled dates and require a lower level of administrative obstacles, especially when production is about to start, which is not one of Croatia’s strong points. High technology companies may also be interested in the reconstruction of railway infrastructure, which is funded by the EU. For example, Altpro manufactures sophisticated systems for railway safety. According to Davor Mrljić, Sales Manager, whilst Altpro is rather successful in China and South America, a lack of local references presents difficulties. However, this is not their problem as there has been no large railway investment for quite some time.
6 WE PRESENT KUNA ZLATICA, ZAGREB
MOJTV PORTAL
When is my programme on?
Attractive Design In only four years the work of two young award winning designers has attracted over 50 clients t is rare that young people decide to start a company immediately after finishing college. This is precisely what young designers Zlatka Salopek and Ana Kunej did, and it was a good decision. They met at the Faculty of Architecture in Zagreb, where they both graduated; Zlatka in 2005 and Ana a year later. They started their professional career during college, working as freelance designers. After graduating, they realised that it was better to own a studio, since they both regarded design as an independent profession. “The idea was born over a cup of coffee, and the only thing we were certain about was that we wanted to work together,” said Zlatka Salopek. She added that they only now realise how brave they were. They had a vision of
I
We try to select projects we believe in and think they bring quality change to the world what they wanted and the desire to work. They had to overcome the usual problems that all companies face. However, in a relatively short time and mainly due to their previous work and the recommendations from people who had seen their work, they found themselves overwhelmed with work, and have barely
Privredni vjesnik Year III No 0115
managed to finish all they have planned. Diversified clientele Today they have over 50 clients, and their graphic design studio Kuna Zlatica has been the winner of many awards. In 2007 they received the award for the best book cover. In 2008 they received recognition for the best book cover and one for the design of the entire book. They won the Ivan Kukuljević Sakcinski award for the best issue in 2006 and 2007, and they are also proud of their award from 2005, the first award from Citroën for a newspaper advertisement. They participated in many graphic design projects, illustration and photography. Since 2008, they have been members of the Croatian Designer Society (HDD) and the Croatian Association of Artists of Applied Arts (ULUPUH). They have had eight exhibitions to date, three of which were international. Their work has been published by the online gallery of an umbrella international association for graphic design, ICOGRADE. “We also work for public associations and cultural institutions, but our client list is highly diversified. Our favourite projects are those that allow us complete artistic freedom, but we always try to select programmes we believe in and think bring quality change to the world,” concludes Zlatka Salopek. (J.F.)
The idea for an internet TV guide emerged three years ago since printed guides were not accurate enough and did not contain all channels rinted TV guides are sometimes incorrect, since changes in programming do occur. Viewers may thus miss an episode of there favourite show or sports review of their favourite club. However, this can be successfully avoided with the MojTV portal, since every change in programming content is corrected immediately and posted on its website. Gordan Sever, director of the MojTV portal, says this Internet TV guide offers a weekly overview covering more than 130 channels accessible in Croatia via satellite or Internet Protocol Television platforms. It also includes film reviews, showbiz news and movie trailers. MojTV is intended for all TV users and movie fans. Each registered user can create their personalised list of channels. According to user choices, a home page will be created with films and shows broadcast on the chosen channels. Moreover, users can mark and comment on all content, explains Sever. He ventures that TV guides are difficult to keep track with and that this business requires more workers and a certain kind of software in order to be better.
P
Get the programming through your mobile phone The main advantages of the portal, whose development lasted several months, is a clear view and content presentation, preci-
sion, information quantity and the fact that changes are monitored live every day, which no one in Croatia is doing, points out Sever. He reveals the idea emerged three years ago, since printed guides were not precise enough, and did not contain all channels accessible in Croatia
According to a survey conducted by Gemius, MojTV (My TV) has 30,000 visitors per day and over 200,000 per month due to limited space. According to a survey conducted by Gemius, MojTV (My TV) has 30,000 visitors per day and over 200,000 per month, he ventures. “We are growing by 10% each month, which puts us at the top of visitor ratings in Croatia, and users most often search for film reviews and TV timings”, notes Sever. On of the future ideas is possible regional expansion, which is a very natural second step. A lot of thinking has been put into the further development of the portal, and they will take a more aggressive turn towards further development. This especially regards their mobile portal, which has been available for a year and where users can find out what is on TV using their mobile phones. (B.O.)
www.privredni.hr Business & Finance Weekly
7
CROATIAN FOREIGN CURRENCY MARKET Currency
Kuna exchange mid-rate
AUD CAD JPY CHF GBP USD EUR
4,878662 5,431506 6,540833 5,39604 8,727463 5,749447 7,189684
Source: HNB
WEEK JULY 3, 2010
EUR
7.21
USD
5.90
29.6.
30.6.
1.7.
2.7.
5.86
4.45
7.19
5.82
4.42
7.18
5.78
4.39
7.17
5.74
4.36
4.70 28.6.
29.6.
30.6.
GFK SURVEY
SAVINGS UP, LENDING DOWN
This decade has shown an increase in the number of individuals using current accounts, debit cards as well as authorised overdraft limits Vesna Antonić n terms of the percentage of adults (15 years and above) conducting business with one or more banks, Croatia is considered to be one of the leading countries in the region. According to a recent quarterly survey of the finance industry, conducted by GfK FMDS on a regular basis since 1999, almost every adult Austrian is a bank client whilst nine out of ten Croatians is a client with at least one bank. According to the survey, most Croatian respondents are solebank clients. However, some 25% conduct business with two
I
69% of the respondents intend to reduce their debt level over the next year or more banks. Although current accounts and related products seem to be quite popular, their use differs over time. Hence, this decade has shown an increase in the number of clients using current accounts, debit cards as well as authorised overdraft limits. On the other hand, the use of cheques has
decreased being replaced by more modern means of payment, such as standing orders, Internet, telephone and mobile phone banking. GfK analysts emphasise the current global financial crisis has influenced the use of certain banking products and services, as clients currently favour s a v ings over loans. The survey shows that some 4% of respondents are not capable of paying their instalments. 66% believe it is
4.48
7.20
7.16 28.6.
CHF
currently more difficult to raise a loan than previously and 69% have shown caution and intend to reduce their debt level related to loans, authorised overdraft limits and credit cards during the forthcoming year. The GfK survey, which covered 1,000 respondents, concludes that Croatian individuals believe in the stability of banking system. After a brief decrease in savings at the end of 2008, clients are slowly regaining trust in their overall stability.
1.7.
2.7.
4.33 28.6.
29.6.
30.6.
1.7.
2.7.
::: news
Todorović to take over Podravska banka Miljan Todorović, Podravska banka shareholder and Chairman of its Supervisory Board, informed Hanfa (Croatian Financial Services Supervisory Agency) and The Zagreb Stock Exchange that he has concluded an Agreement on Joint Action with another ten shareholders of the bank, which obliges them to release the proposal for the takeover of Podravska banka. The 11 shareholders, including Italian companies, (one of which is Cerere owned by Todorović), as well as individuals, own 79.75% of Podravska banka shares. Karlovačka banka to cover its losses On August 9, Karlovačka banka plans to hold a shareholders’ meeting, to make a decision on covering bank loses for 2009, amounting to €2.80 million. This is one of the worst results in the history of the bank. The losses, caused by the 2009 financial crisis, are planned to be covered by regular transactions from 2010. Karlovačka banka is one of the eight banks which ended 2009 with losses. Medika to be taken over by Mavota Croatian Financial Services Supervisory Agency approved the Mavota proposal for the takeover of Medika at a cost of €1,001 per share. Mavota and its management were obliged to take over Medika in May this year, when Mavota, Pliva and Medika concluded a Joint Action Agreement. Jasminko Herceg, a member of the Medika Board of Directors, acts jointly with Mavota.
8
Privredni vjesnik Year II No 0115
CROATIAN BOUTIQUE HOTELS
Better than home As with boutique stores, boutique hotels are small, unique, particularly warm and run by individuals rather than large corporations Sanja Plješa recent trend in tourism is for visitors to stay at small family hotels which offer high quality service, an individual approach, intimacy and superb gastronomy in an exclusive interior. Such hotels incorporate local elements in order to emphasise their authenticity and hence have been termed boutique hotels. There are no suggested categories or standards for
A
They often develop certain specifics and incorporate local authenticity into their architecture, interiors and gastronomy
those who know precisely what they want”, says Šime Klarić, the Head of OMH (Association of Family and Small Hotels of Croatia). According to Klarić, boutique hotel visitors usually return to the same place more than once, unlike the rest of the hotel industry, which makes such hotels more successful during the global financial crisis.
boutique hotels, either in Croatia or globally, although many small private hotels use this title for self-promotion. As with boutique stores, such hotels are small, unique and warm. They are usually run by individuals rather than large corporations. The average visitor is between 20 and 50 years old of middle- or higher-income level. “Most Croatian small family hotels can be categorised as boutique hotels, which was probably the main goal of their owners. Each of these small hotels has its own specific qualities and they mainly welcome
Each hotel is special Small family hotels in Croatia aim at being identified as boutique hotels. Therefore, they are more oriented towards quality service, gastronomy, setting and atmosphere. They are usually run by their owners and close members of their family and often develop themes and different products. Croatian boutique hotels are characterised by incorporating elements of local authenticity into their architecture, interior and gastronomy. Despite being small, they certainly represent their region and offer unique experience to their visitors. Conrad
Hilton, the renowned American hotelier, said that in such an hotel “visitors can find anything they dream about when at home”. Croatia has much to offer in this particular segment of the hotel industry, such as the renovated Dešković palace on the island of Brač, family gastronomic hotels
like Zdjelarević hotel, adventure hotels like Saint Mihovil in Trilj or Vicko in Starigrad Paklenica, wellness hotels and hotels for active guests, heritage, business or small hotels with contemporary architecture, to name but a few. “All these hotels aim at providing superior, identifiable and top quality service with the signature of their owner by respecting international standards but at the same time identifying authenticity and quality”, points out Klarić. Croatian small and family hotels have already been recognised by the international market as boutique hotels which maintain standards in line with global trends and offer top service for a price lower than in comparative destinations.
Korkyra and Kukuriku – two new boutique hotels Two new luxurious small hotels, members of OMH (Association of Family and Small Hotels), have recently been opened. One is Korkyra in Vela Luka on the island of Korčula, whose reconstruction costs amounted to €7 million; the other is the Kukuriku hotel in Kastav. Both have been awarded with four stars. The reconstruction of the Korkyra hotel respected local traditions, original architecture and the atmosphere of the small town on Korčula, however with a contemporary and luxuriously designed interior. The Kukuriku hotel from Kastav, owned by the renowned caterer, Nenad Kukurin, has an area of around 1,500 square meters and 15 rooms. Each room is different, with designer furniture and four-poster beds. “The main goal was to construct a hotel with traditional architecture and a contemporary interior. The Kukuriku restaurant has been moved into the hotel as we believe it gives that little something extra. Most of our visitors are business people as well as those tourist who would like to enjoy local wines and gastronomy”, says Nenad Kukurin. He and his partner have invested more than €2.5 million into its reconstruction.
::: news Number of industry sector employees shows a further decrease According to the Central Bureau of Statistics, the total number of employees in Croatian industry for May 2010 decreased by 0.3% and 7.9% when compared with April 2010 and May 2009 respectively. When compared with the monthly average for 2009, the number of employees decreased by 7.1%. In the last year, the processing industry showed the largest decrease of 8.2%, followed by the mining
industry (down 6.6%) with power, gas and steam supply and airconditioning showing a decrease of 2.2%. Higher salaries for employees with lower incomes Some 1.48 million Croatian employees may expect to receive a higher salary this month as their income is liable to new tax bands of 15%, 25% and 40%. Employees and pensioners with an income or pension ranging from €411 to €822
are not liable to the additional “crisis tax” of 2%. The Tax Administration estimates some 720,000 employees and 190,000 pensioners will see an increase in income. The crisis tax rate for income over €822 is to be lifted this November.
Farmers to return subsidies worth €3.48 million The Inspectorate of the Ministry of Agriculture, Fisheries and Rural Development placed 6,767 recipients of governmental subsidies under surveillance and determined irregularities in 649 cases. Further payments have been stopped and the inspectorate ordered €3.48 million to be paid back. In 2009, 7,738 inspections were carried out which noted 649 cases of irregularities. The total amount of current subsidies is worth €71.27 million.