Support for loss-making companies Model C: the final option for help for unsuccessful companies
Marjan Vučak, CEO of Meggle Hrvatska and senior manager, Meggle Adria €12.33 million equity invested in Croatia
July retail analysis After a 21 month downward spiral, a few small signs of recovery can finally be seen
INSOLVENCY
INTERVIEW
RETAIL ANALYSIS
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Croatian Business & Finance Weekly Established in 1953 Monday / 6th September / 2010 Year III / No 0120 www.privredni.hr
S U P P O R T E D
MODERNISATION OF RIJEKA PORT €1.1 MILLION INVESTMENT n co-operation with Belgian company Phaeros Group BVBA, the Rijeka Port Authority and the leading Croatian system integrator, Combis, have recently signed a contract for the implementation of an electronic data exchange system, worth €1.1 million. The project to construct the Rijeka Port Authority’s EDI (Electronic Data Interchange) communication system is the first of its kind in the region and is financed with the loan from the World Bank. In co-operation with the Combis experts, Phaeros is to deliver and implement the software programme customised for the Rijeka Port Authority needs. Combis will design complete system infrastructure and integrate EDI with the existing systems in the Rijeka Port Authority. Marinko Žagar, Applications Development and Integration Division Director at Combis, points out that by implementing EDI system, the Rijeka Port Authority will standardise and improve data exchange (communication channels) within the company, and also ensure data access in real time thus reducing the occurrence of errors. Bojan Hlača, Executive Director of the Rijeka Port Authority, points out that this project is part of the Croatian port business adjustment, in accordance with EU requirements.
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SLIGHT DECREASE IN REAL ESTATE PRICES IN CROATIA
DECREASE IN BOTH PRICES AND SALES
The greatest reduction in apartment prices was seen in Dubrovnik, where the average price per square metre declined by 6% from €3,572 in July to €3,358 in August ccording to Crozilla.com, a real estate web portal, August prices of real estate in Croatia, when compared with the previous month, show a slight decrease. The greatest decrease in apartment prices was seen in Dubrovnik, where the average price per square metre declined by 6% from €3,572 in July to €3,358 in August. Osijek follows, with an average price decrease per square metre of 3.6% and now stands at only €964, as opposed to the month be-
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An average apartment price per square metre in Osijek now only €964 fore when the figure was €1,000. In August, Pula recorded a square metre price fall of 2% on a monthly basis. Currently, a square meter for an apartment in Pula is €1,386 down from €1,414 in July. In Zadar, on the other hand, prices fell by 1%; one square meter in August totalled €1,642 from €1,659 and in Rijeka the average price decreased from €1,716 to €1,707 or 0.5%. Price reductions, on a monthly basis in Zagreb, were just 0.6%, with prices decreasing from €1,858 in July to €1,848 in
August. Unlike other towns, Split was the only place to record an increase (of 0.3%), with prices increasing from €2,154 to €2,160. Sales decreasing but market still lucrative Overall Crozilla.com statistics show there is an ever-growing demand for apartments in Zagreb, Splitsko-Dalmatinska county (with Split as the leading city), Zadarska county, PrimorskoGoranska county and OsiječkoBaranjaska county (Osijek). In comparison with previous years, real estate sales have drastically decreased, but the market still
shows signs of healthy activity. According to Ivana Beljan from Crozilla.com, it seems currently that the number of real estate buyers has decreased together with the prices - when prices fall so do sales. In her opinion, the main cause of such market conditions is the general situation in the country, where personal purchasing power has been reduced to the minimum. “The situation could be improved only by a further decrease in prices or better credit conditions from banks, which is not something we can really look forward to, notes Ivana Beljan. (V.A.)
2 VIEWPOINT
Privredni vjesnik Year III No 0120
KATICA HAUPTFELD, OWNER, KATARINA LINE AGENCY
Appreciate partners and look after your reputation
( 72 companies
to have submitted restructuring plans by end
Last year, our travel agency served 42,000 customers, SUPPORT FOR LOSS-MAKING COMPANIES 15,000 of whom opted for cruises, equating to more than 1,000 travellers per week during the season eople often ask, especially in these times of crisis, what is the secret of success in the tourism business. Ms. Hauptfeld believes her job is anything but easy, but it is also her hobby which considerably changes her perspective on her work. If one does not like the job and people, if someone is not proficient in foreign languages and not willing to sacrifice some spare time, as the tourist season is not working-hours-sensitive, one cannot succeed in this business. In addition, attendance at about thirty tourist fairs around the world is a must, which is tremendously difficult and challenging. It is extremely important to have clearly defined goals. Ms. Hauptfeld realised a long time ago that she did not want a large company, burdened with highrisk investment and loans. She opted for her business to grow safely and gradually, yet at the same time she wanted to be able to maintain friendly contact with business partners and co-workers. Thus, individual appearance is more certain as a company and its owner can stand behind every idea, proposition and word. It is also very important to preserve the business name and reputation. Katrina Line has never been illiquid. A business partner will always recognise professionalism and integrity, the fact that the company settles its obligations at the appropriate time, but also, that one is willing to help in hard times. For this reason Ms. Hauptfeld is extremely proud that her agency has opened its doors in
MODEL C: FIN UNSUCCESSF
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Support to entrepreneurs facing financial difficultie turning receivables into capital interest Igor Vukić
Croatia and abroad. Due to the economic crisis, the number of employees has not increased, even though the scope of business has called for it. Ms. Hauptfeld and her devoted team have been working on getting the maximum results with minimum costs. This effort has paid off as there has not been a time when she considered laying off people or reducing salaries. Last year, the travel agency provided services to 42,000 customers, 15,000 of whom went on cruises, more than 1,000 travellers per week during the season. That equates to the size of a large floating hotel and the totality is managed by a team of 20 people. Persistence, hard work and effort guarantee success. Katarina-Line employees work extremely hard. However, both employees and business partners are always rewarded. Finally, one should always seek new ideas as it is uncertain when ideas will be realised. It was the idea that 18 years ago led to the setting up of Katarina Line business in one small room.
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y the end of September, the Croatian government will announce its first decisions on the giving of support according to ‘Model C’, intended for entrepreneurs facing financial difficulties. By that time, more than 70 companies should have submitted their restructuring plans, following the ‘Guidelines for Granting Subsidies to Entrepreneurs with Financial Difficulties’. These specify that applications for support, according to the model, are to be submitted to the relevant Ministries. As expected, the Ministry of Economy, Labour and Entrepreneurship has accepted most of the applications, (65) followed by the Ministry of Sea, Transport and Infrastructure with 5 applications whilst the Ministry of Environmental Protection, Physical Planning and Infrastructure has received only two: one has been granted as fulfilling all the required criteria with the second having been rejected.
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Possible “difficulties” The guidelines specify that an entrepreneur who is facing finan-
cial difficulties and being unable to prevent losses through the use of company funds or with funds acquired from owners/shareholders or creditors, providing that these losses would, without governmental support, endanger future business activities in either the short- or medium-term. To be more specific, share companies and limited liability companies may apply if their nominal or core capital has been reduced by more than 50%, with 25% of that reduction having occurred in the previous year. According to the guidelines, trading companies, where at least some members bear unlimited liability for company debts, are facing difficulties if their capital has been reduced by more than 50% as presented in financial reports, , with more than 25% of that reduction having occurred within the previous 12 months. Support for entrepreneurs may be granted in the form of complete or partial write-off of their debts to the government or through turning receivables into capital interest through an equity increase. Autotransport from Šibenik is a typical example. The management submitted an application
Deferred payment of taxes during restructuring process The guidelines allow that an entrepreneur may submit a request for the deferred payment of taxes (taxes, levies and other elements) during the restructuring process, which would be in force until the Croatian Competition Agency reaches its final decision on whether the plan is acceptable or not. Another option is to request payment by instalments. The Ministry of Finance may approve deferred payment of liabilities with a grace period no longer than 10 months. If the Croatian Competition Agency does not approve support for the restructuring plan within this period, the Ministry of Finance is authorised to start bankruptcy proceedings.
www.privredni.hr Business & Finance Weekly
September
3
( €6.33 million ( €2.05 mil support for Autotransport
in write-off requested by Čazmatrans
AL OPTION FOR HELP FOR UL COMPANIES s may be granted as a complete or partial write-off of their debts to the government or through Badel among first to apply One of the first companies to have applied for support according to ‘Model C’ is Badel 1862, one of the most renowned Croatian manufacturers of alcoholic drinks. Last year, Badel was forced to face considerable financial difficulties, amounting to €16.44 million of debt covering VAT and excise duties. Thus the Ministry of Finance has mortgaged all Badel real estate property, meaning that the company has been forced to pay for all its obligations in advance and cannot receive any bank guarantees. As these financial obligations have become too much of a burden for Badel, the Ministry of Agriculture, Fisheries and Rural Development has proposed that the government settles its liabilities either by converting the debt or at least a part of it, into equity. Taking this proposal into account, the Ministry of Finance has approved the debt to be paid within a grace period of 10 months. Badel management anticipates they will close the final agreement with the government in the near future. (D.Ž.) to the Ministry of Sea, Transport and Infrastructure, requesting €6.33 million of support through an equity increase - turning government receivables into capital interest. Karlovac Autotransport
Owners of larger companies will be expected to participate in restructuring costs to 50% of the total amount whilst for small entrepreneurs the figure will be 25% and Čazmatrans Vukovar have applied for €0.55 and €2.05 million of liabilities as write-offs to the government, respectively. The relevant Ministries will form working groups to evaluate submitted restructuring plans. Subsequently, the plans will be sent to the Ministry of Finance who will evaluate their fiscal sustain-
ability and whether they abide by the law. Thereafter, the Croatian Competition Agency will provide its professional opinion. As entrepreneurs will receive governmental support, Croatian law and European practice require the evaluation of how such support will help and also reflect on market conditions. Proposals and evaluations will be finally approved by the government. Horizontal support “Government itself cannot create new jobs. However, it can create the framework in order to maintain existing jobs within companies facing financial difficulties. These subsidies are to help them with their current difficulties and enable them to develop”, said Jadranka Kosor, Croatian Prime Minister, during the presentation of this model. Ms Kosor reiterated that companies may, even during the restructuring process, apply for horizontal support (grants related to research, devel-
opment and innovation, training, environmental protection, energy conservation amongst others), as already is the case within the textile industry. The most important sanction for governmental approval within ‘Model C’ would be not only a plausible restructuring plan but also the owners’ willingness to participate proportionally in an element of costs. Owners of larger companies are expected to participate in restructuring costs to 50% of the total amount whilst for small entrepreneurs, the figure is 25%. As the government is often not the principal creditor and lossmaking companies usually owe substantial sums to banks and other financial institutions, Đuro Popijač, Minister of Economy, invited all creditors and institutions to reprogramme their claims, reduce interest rates and assist such companies by all means available. If these activities do not provide any further help, such companies will be wound up.
Additional solution Another solution, would be to sell government receivables to a strategic partner. If there are no interested parties, insolvency appears to be the most plausible option, especially when taking into account the approved amendments to the Bankruptcy Acts, which regulate accelerated bankruptcy programmes. “Such companies not only generate increased liabilities in terms of taxes and levies, but also contribute to illiquidity, do not pay salaries on a regular basis and create confusion in the market” said Ivan Šuker, Minister of Finance. Hence, ‘Model C’ could be the ’Last Chance Saloon’ for help to entrepreneurs, providing that they find sufficient energy to create plausible restructuring plans, as well as a fresh start to creating order amongst companies which have been receiving support for some considerable time, without showing any sign of normal market transactions.
4 News Institute of Immunology exports vaccine to Russia and Ukraine The Institute of Immunology has signed contracts with Microgen, a production affiliation for medical immunological and biological preparations within the Russian Ministry of Health, as well as Pharma Life LCC, regulating the sale and supply of Russian and Ukrainian markets with measles vaccine. The agreed delivery amounts to 500 litres of vaccine for the Russian market, a quantity covering 2 million doses and 250,000 individual doses have been identified for the Ukrainian market. As 700 litres of vaccine have already been exported to Russia during this year, this second contract will increase the total amount of vaccine to more than 4 million individual doses. IGH to develop plans for Tivat airport Representatives of IGH and the public corporation Airports of Montenegro (Javno poduzeće Aerodroma Crne Gore) have signed in Podgorica an agreement on the development of preliminary designs for the reconstruction, adaptation and annexe construction of the administrative and business centre of Tivat airport, with a value of € 40,000. IGH was assigned the project in open competition and is obliged to present its final designs within 100 days. Petrokemija – higher sales but overall losses Petrokemija losses in the first six months of 2010 amounted to €6.44 million, according to the management. Despite the increase in sales by 28% or 537,000 tonnes, income decreased by 15.7% due to low sale prices. “We are, nevertheless, encouraged by the current global situation, showing a recovery in the real sector and for agricultural goods”, points out Josip Jagušt, Chairman of the Board. Petrokemija shipped 88,000 tonnes of fertiliser in July, noting a further increase in the amount for August. Hence, when compared with the same period previous year, the amount of shipped fertiliser increased by 100%, amounts which have not been seen since summer 1988.
Privredni vjesnik Year III No 0120
CROATIAN INDUSTRY IN CANADA OWNED BY UKRAINIAN
Croatian flag in Saskatchewan
Despite Ken Cenaiko, the owner of Croatia Industries Ltd., being of Ukrainian background, both the Ukrainian and Croatian flag wave next to each other in front of the company building. The tradition is further preserved by the red-white logo, similar to that on the Croatian coat of arms Drago Živković he Croatian flag in front of a factory with a Croatian name in a distant country is indeed a rare sight. When the owner of the company is not a Croat, such a sight is even more exceptional. However, this is exactly the case with Croatia Industries Ltd., a company in the city of Saskatoon, the largest city of the Canadian province of Saskatchewan. The current owner of Croatia Industries is a mechanical engineer, Ken Cenaiko, who, five years ago, took over the company from its founder, Karlo Jarčan, as he opted to return to the Croatian village of Jablanovac. Jarčan immigrated to Canada in 1968. In 1976, after spending eight years working as a mechanical engineer, he founded Croatia Industries. At the beginning of the 1980’s, he was joined by three fellow countrymen. From that point on, the company progressed rapidly. The first buyers of Croatia Industries’ specialised equipment were salt, potassium (calcium carbonate K2CO3 ) and uranium mines as well as mills and construction companies. Today, 50% of all employees come from the territories of former Yugoslavia (Croatia, Bosnia and Herzegovina, Slovenia and Ser-
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bia). The other half are Canadians, but there are also Germans, Danes, Bangladeshi and Chinese. By profession they are mechanics, mill technicians, locksmiths and mechanical engineers. Bright future The current owner started working for the company in 1994, when he had the job of mechanical engineer. Five years later he purchased 50% of the company and in 2005 the remaining half. Despite the owner being of Ukrainian heritage, both Ukrainian and Croatian flag wave next to each other in front of the company building. The tradition is further preserved by the redwhite logo, similar to that on the Croatian coat of arms. In May 2002, Cenaiko visited Croatia. Unfortunately, neither then nor later did his company set up co-operation with any Croatian companies or has exported its products to Croatia. At one point, however, they did buy some equipment from Prvomajska Company (in Zagreb). When Jarčan returned to Croatia he tried to set up a similar company. However, he still has not realised his ambition, as, in his own words, “jobs in Canada are being offered, but in Croatia one is required have to pay for them”.
Since the days of Jarčan ownership, when the company employed 15 staff and covered an area of 1,150 square meters, Croatia Industries has more than doubled, now employing 35 individuals and stretching over 2,150 square metres of production facilities. The majority of their work still consists of repairs and replacement of heavy machinery parts in mining. Due to the fact that mining equipment is permanently being exposed to corrosion and radioactiv-
As mining equipment is permanently being exposed to corrosion and radioactivity, it demands frequent replacement, ensuring constant business growth for Croatia Industries ity, it demands frequent replacement. For Croatia Industries this means constant business growth. Considering current world energy consumption, as well as mining business activities, further growth is expected especially in developing countries. Cenaiko believes that the company, which is very proud of its Croatian origins, has a bright future.
www.privredni.hr Business & Finance Weekly
INTERVIEW 5
MARJAN VUČAK, CEO OF MEGGLE HRVATSKA AND SENIOR MANAGER, MEGGLE ADRIA
€12.33 million equity invested in Croatia
Currently Meggle Hrvatska exports the majority of its products mainly to Italy, Greece, Bulgaria and other countries in the region. Exports account for some 20% of current trade purchases throughout the country are decreasing, which is primarily a consequence of the transition from extensive to intensive production, what we call “production consolidation“. This is a natural process in this phase of agricultural production development in Croatia.
Jasminka Filipas eggle Hrvatska was created as a merger between the 130-year-old Bavarian company, one of the leading European dairies owned by the Meggle family and a dairy from Osijek dating back to 1949. The global financial crisis notwithstanding, the past year has shown growth and success for Meggle. The company achieved total income of €39.32 million, which, when compared with the previous year, represents a growth rate exceeding 3%. Total revenue at the end of the year amounted to €1.03 million. In the last two years, the company’s market share has risen from 8% to 13%, with the aim of achieving 20%. Hence, Marjan Vučak,
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What is the deadline for consolidating payments with suppliers? What are your views on producer demands for higher purchase prices? We have never been late with any single payment to suppliers. We are especially proud of this as we all know what the situation is like regarding liquidity in the whole country. Regarding prices, or to be more specific, the demand for their being raised, we believe they are acceptable. Everything is always too expensive for buyers and for those who sell, any price is too low. That is why we have discussions, arrangements, and compromises. It is all part of business.
Continuous investment shows our strength and future business plans CEO of Meggle Hrvatska and senior manager of Meggle Adria, discussed these numbers and company success with Privredni vjesnik. Meggle GmbH has recently announced the acquisition of Albania’s biggest dairy Ferlat. Will this provide new export opportunities for your company? Firstly, this acquisition is an excellent support to our strategic position and expansion in the region. However, it will, most certainly play a huge part in the synergy of our production facilities in this region and product exchange in the future. Meggle Hrvatska already exports the majority of its products to Italy, Greece, Bulgaria and other countries in the region. Exports comprise some 20% of current trade.
Last year the company made large investment into infrastructure and also launched 24 new products. Is further investment planned? Last year more than €2.60 million was invested into production and infrastructure, and a total of €12.33 million since our entry into the Croatian market. Some of our products –yoghurt butter, herb butter, baguettes, long-life milk packaging with reclosable screw caps – are still unique innovations on the market. Ongoing investment is our strength and our plan for future business activities. How much we will invest and what we will invest into primarily depends on business development planning and strategy, as well as on certain technical requirements. Considering that these are all equity-financed investments, it is understandable
that they also depend on our financial results. Regarding the product range, we are permanently working on the development of new products. How would you describe the situation regarding milk purchases? It is a well-known fact that you increased your purchases last year, but will that be sufficient? The situation is always dynamic and this is good for both milk processors and manufacturers, and by this I do not mean only price trends. During the year, there are periods of production surplus in the entire market and then we all share the same problem, whereas the summer period is characterised by reduced production and then we all try to ensure sufficient quantities. However, it is evident that the
At the beginning of the year you took over a new role in the company. What changes are you currently facing? In the beginning, I took over the management of Adria region, comprised of all the countries of the former Yugoslavia and Albania. Although I have been the head of Bihać Dairy and for the last 21/2 years the head of Osijek Dairy, the fact of being responsible for all these markets is a huge challenge, but certainly also an honour. Each country is specific; every market has a story of its own. However hard it can sometimes be, it is that much more interesting. I would say that the biggest change is shown in the number of kilometres I travel by car. Everything else is good organisation and again – great co-workers. My every success is actually our joint success.
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Privredni vjesnik Year III No 0120
CROATIAN FOREIGN CURRENCY MARKET Currency
AUD CAD JPY CHF GBP USD EUR Source: HNB
EUR
Kuna exchange mid-rate
7.29
5,165049 5,377175 6,716756 5,584244 8,736942 5,669928 7,279620
HBOR auction of €8.22 million The Croatian Bank for Reconstruction and Development has accepted offers from five banks for their ‘Model A’ quota allocation. Weighted interest rates for entrepreneurs will range from 4.69% to 4.87%. For the €8.22 million offer, HBOR received proposals from seven banks totalling €10.79 million and has accepted Erste Bank, Zagrebačka, PBZ, Centar and Raiffeisen bank proposals. Erste and Zaba offered the lowest interest rate of 4.69% whilst PBZ requested, and has been granted, the largest tranche of €4.79 million with a 4.81% interest rate. Of the €0.27 billion as foreseen by HBOR for this funding model, less than €68.49 million has been allocated. Nexe losses rise to €13.42 million Nexe Group has shown a €13.42 million loss for the first six months of 2010 although losses for the same period last year came in at €5.11 million, according to Zagreb Stock Exchange. Such a loss has been primarily caused by decreased sales and prices of a certain products, an increase in interest rates as well as the influence of foreign currency risk. Total income of Nexe Group for the first six months of 2010 was €75.29 million, a reduction of 7.9% over the previous year. Total expenditure reached €87.96 million, a reduction of 6.8%.
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5.58
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5.66
5.56
7.24 30.8.
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::: news
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JULY RETAIL ANALYSIS
AFTER A 21 MONTH DOWNWARD SPIRAL, SIGNS OF RECOVERY FINALLY BEING SEEN Abolishment of the crisis tax rate positively influences retail sales ccording to the Central Bureau of Statistics, retail sales in July rose by 0.7% (a nominal increase of 1%) when compared with the same month last year. Thus, after a 21 month downward spiral, retail sales are finally showing signs of recovery. RBA analysts believe that the base period certainly has positively influenced this increasing trend, considering that in July 2009, retail sales recorded a slump of 14.5%. The analysts also point out that the successful tourist season this year also contributed to positive growth. Tourist board figures for July show a significant increase in the number of arrivals and overnight stays on a year-on-year basis, hence an increase in numbers probably reflecting higher retail consumer spending. In addition, the government abolished the
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Tourists contributed to retail rise in July lower crisis tax rate on earnings, pensions and other income in July, which did not exactly affect the spending increase itself, but certainly had an influence on growing consumer optimism. Consumer anticipation Results for August should also be positive, especially when the number of tourist arrivals and overnight stays, as this month is also likely to be marked by posi-
tive growth. RBA analysts point out that, despite July showing good results and August anticipating fairly good results, these are small yet positive improvements for retail sales. However, it is still too early to talk about real retail recovery. According to RBA analysts, the abolishment of the crisis tax rate by the end of this year will also have a positive influence on retail sales. Autumnal concern Together with rising consumer optimism, this might have a significant impact on substantial spending increases, considering that this involves easing the tax burden on high income earners. Also, the government announcement not to increase electricity prices could additionally have a positive influence on retail sales.
However, the fact that the price of electricity is not to be increased currently should be taken only as a temporary solution, as electricity and other administrative prices will eventually have to be adjusted to EU market criteria. It should also be taken into consideration that unfavourable labour market trends, which are expected to intensify during the autumn, will most probably limit any significant retail recovery. Since consumer spending depends primarily on the labour market situation, without any recovery of the respective market, real retail recovery should not be expected soon, regardless of the short-term positive effects that factors like the abolishment of the crisis tax or tourist spending could have in this case, conclude RBA analysts. (V.A)
www.privredni.hr Business & Finance Weekly
WE PRESENT 7
STANOBIRO, ŽUPANJA
SITAR TRADE, ŽAROVNICA
Modest heroes of the Experts in making global financial crisis objects by weaving and braiding The popular belief is that men weave straw and twigs, while women make bags of straw and rushes
If the figures for the first six months of 2010 are compared with those for the same period of last year, Stanobiro shows even better business results uge debts which public corporations have, over the past several years, accumulated in some Croatian cities, especially Zagreb, have contributed to their notorious reputation. City companies are often perceived as devourers of the taxpayers’ money. There are, however, completely opposite examples, especially in smaller towns. Stanobiro Company, founded in 1998 by the town of Županja, manages more than 700 apartments and around 70 business premises. It is the successor of earlier institutions which were conducting similar business activities and is still the only real estate management firm in Županja. Since its foundation, Stanobiro has spread its business activities and has taken over certain tasks in the interest of the town, thus ensuring the necessary assets for regular activities. Since the beginning of 1999, it has taken over the management of the cinema where, over the past decade, many cultural and related events have been organised. In two investment phases the hall has been thoroughly renovated and redeveloped as the town theatre, and on a regular basis, organises film projections free of charge.
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Modesty a virtue According to the manager Branko Maričić, Stanobiro is a small yet
successful company with annual revenue of some €0.27 million. The housing management aspect brings only a small part of the overall profit, totalling around 15%, and, although received payments have been quite successful (payment rate exceeds 95%), that aspect of business is actually not as profitable as expected. The real profit is generated from other activities, such as charging for parking, a duty entrusted to them by the town four years ago. Building design and the supervision of works are also lucrative sources of income. In addition, Stanobiro provides ownership elaboration services such as ownership conversion for the city marketplace, which was a demanding task. A month ago, says Maričić, they received a letter in which they are called “heroes of the recession”. Although somewhat of an exaggeration, the title is not completely unearned as, in the first half of 2010, Stanobiro recorded even better business results when compared with the same period of the previous year. “During these times of global crisis there is a visible difference between those who, on one side, behaved differently, and therefore currently have financial difficulties and those who were rational and can in these times of global crisis conduct business activities normally”, concludes Branko Maričić. (D.Ž.)
he art of braiding wood, cork, straw, rushes and twigs used to be very popular in Hrvatsko Zagorje. There was hardly a village or a house, where people did not make baskets, rush or straw bags for family needs. This was especially the case in the areas of Lepoglava, Žarovnica, Bednja, Kamenica and Višnjica, which comprise the heart of wood braiding and straw weaving crafts. Today, however, there are few people who have managed to keep the tradition alive and successfully sold woven products on the market. Now, these products are mainly sold at trade fairs and marketplaces throughout Zagorje and Croatia, but many have also been sold internationally, the products of Sitar Trade from Žarovnica near Lepoglava are an example. This craft trade has maintained the tradition of basket weaving and wood braiding for centuries, using only natural materials for the manufacturing of their products. Željko Mežnarić has carried on the family tradition and adjusted the intensity of this aspect of national heritage to modern needs in order for his products to outlive the domination of high technology. “I believe that these products will maintain their popularity in the future, and the passion I have for the art of wood braiding is the only thing that gives me the strength to keep this tradition alive“, says Željko Mežnarić, the owner of Sitar Trade, where they
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also weave baskets from hazel straps (threads and fibres) which are rotated around chestnut ribs fixed to a hardwood bottom. Willow wood, inner bark and brushwood This method is used for making “sirnica“ – a basket for drying cheese - as well as baskets for carrying loads on ones back, baskets for wood and many others. The inner bark and twigs are used to braid bottles for storing brandy (rakija) and wine. “Hazel inner bark is used for braiding sieves, whilst willow twig and inner bark are used for braiding different kinds of objects for many purposes, such as fishing baskets, must strainers, wickers for drying fruit, bird cages, baby baskets and certain items of furniture“, says Mežnarić. “The popular belief is that men weave straw and twigs, whilst women make bags of straw and rushes”, adds Mežnarić. It takes approximately 30 minutes to 2 hours to make one product, depending on type and size. The oldest braiding method dates back to the Bronze Age – the so called spiral technique – in which straw bundles are placed in spiral piles and tied with hazel inner bark, with straps or threads, which serve as adornment. The material used in this method is usually rye straw, but must be harvested manually, with sickle or reaper. (E.D.)
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Privredni vjesnik Year II No 0120
PALACE HOTEL ZAGREB BECOMES PART OF THE WORLDHOTELS GROUP
UNIQUE HOTELS FOR UNIQUE PEOPLE
Worldhotels, very proud of their flagship hotel in Zagreb, encompasses 450 hotels in over 250 destinations in 65 countries worldwide Sanja Plješa he Palace Hotel Zagreb, located in the old Schlessinger palace, was first opened in 1907 and can boast of one of the longest hotel business traditions in Zagreb. It is a 5-minute walk away from the historical centre and main city square. The most frequent guests at the Palace Hotel are both business people as well as tourists, travelling through Croatia. By signing an agreement with Worldhotels on August 1st, the Palace Hotel officially joined this international hotel chain. In order to modernise and upgrade to modern trends in hotel management, the interior was recently renovated, which slightly changed its former image. The investment in the renovation of the hotel, whose majority owner (60%) is Glavničar Company, amounts to €3.42 million, and an additional €0.55 million invested into maintenance. “We expect an increase in the number of tourist arrivals and overnight stays for 2011, and our predictions are that the Worldhotels’sales channels and marketing will increase results by 20% compared with this year. It is important to highlight the fact that our year-end balance
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showed no loss, which is very rare in the hotel industry. Moreover, we achieved an income of €2.74 million and a profit of €14,500”, says Josipa Jutt Ferlan, General Manager of the Palace Hotel. Professionalism and investment While discussing the Palace Hotel’s entry into the Worldhotels group, Josipa Jutt Ferlan pointed out that the hotel management had significant assistance from the Croatian Chamber of Economy. “It is exactly this kind of professional association that can differentiate serious from less committed business partners. Thereafter, businesspeople can continue their negotiations and conclude agreements with mutually chosen partners”, says Jutt Ferlan. After acknowledging the hotels cooperation with the Worldhotels chain, vice president of the CCE (Croatian Chamber of Economy) Vesna TrnokopTanta, added that that partnership was the result of the long-term professional work of the hotel staff and manage-
ment, their on-going investment into quality and its long tradition. She added that the Palace Hotel had been one of the first hotels in Zagreb with notable continuous professional work and intelligent investment without debt or other financial burdens. She also pointed out that the CCE hoped that other Croatian hotels would follow this example in order to maintain parity with the latest world trends. Quality first Heike Hoerdemann, business development manager of Worldhotels also commented on the Palace Hotel’s entry into the Worldhotels group. She says the company is “very proud of their flagship hotel in Zagreb” and that they a r e “sure the
Palace Hotel will set appropriate market standards”. “Our plan for the second half of this year is to
The interior of the Palace Hotel was renovated at a cost of €3.42 million, slightly changing its former image have an association with an additional 10 hotels in different cities, and thereafter with a further 15 located in so called “secondary destinations” in Croatia, Serbia, Bosnia and Herzegovina and Slovenia”, she announced. Worldhotels is the hotel group of unique independent world hotels. The company’s portfolio consists of almost 450 affiliate properties in over 250 destinations in 65 countries worldwide. The mission of the group is to offer a wide spectrum of four- and five-star hotels to people who travel either for business or for pleasure. Each of the unique hotels has undergone rigorous selection as they all have to meet very demanding and numerous (250) quality standards.
Josipa Jutt Ferlan, General Manager of the Palace Hotel