Slavko Bošnjak, co-owner, hotel Le Meridien Lav, Split More direct airline routes to increase tourism are needed
Croatian companies strong presence in Libya The country is a huge construction site with nine Croatian companies operating
The Danube strategy The river leading to the future. Croatian priorities are the development of European traffic
INTERVIEW
CONSTRUCTION INDUSTRY
NEW EURO-REGION
PAGE 3
PAGE 4
PAGE 5 2010
Croatian Business & Finance Weekly Established in 1953 Monday / 18th October / 2010 Year III / No 0126 www.privredni.hr
S U P P O R T E D
B Y
T H E
pvinternational pv international C R O A T I A N
C H A M B E R
O F
E C O N O M Y
VLADIMIR PREVEDEN, EXECUTIVE PARTNER, ROLAND BERGER STRATEGY CONSULTANTS ZAGREB
KEY INDUSTRIAL BRANCHES NEED DEVELOPMENT When Croatia joins the EU, foreign experts will no longer need work permits, from which companies will profit considerably Boris Odorčić
important. The strategic opportunities are in sustainable tourism, eco-agriculture and technology development of energy from renewable resources as well as the stronger development of internet technologies.
F
or over a decade now, Roland Berger Strategy Consultants Zagreb has been consulting with leading Croatian companies, as well as being included in the businesses of all significant industries. Vladimir Preveden, executive partner, points out that Croatian companies lack structure. They do not participate in a small market, and they neutralise this disadvantage only with targeted internationalisation with a clearly defined strategy.
It is inexplicable that tourism with a 15% share of GDP does not have a master plan
What are the prime flaws in the Croatian economy? The main problem is that there is no strategic plan for the economic development of Croatia. By this I mean a plan that will clearly define key industrial branches needing development and which have the potential for long-term global development. Furthermore, the chronic
problems remain a slow and inefficient public administration and high taxation. An unstable legal framework and legislation, slow and often opaque legal proceedings, as well as situations in which local politicians sometimes overpower the state, are not only slowing development, but also reducing the interest of foreign investors. How can the Croatian economy become stronger and fitter? First there is a need to change
the negative trend according to which Croatia has been increasingly lagging behind Central and East Europe since 2000, specifically an average GDP growth rate. However, this is almost impossible to recuperate in the medium term. It is inexplicable that tourism, with a 15% share of GDP, does not have a master plan and that the tourism industry is facing dangerously high levels of non-profitability. Croatia needs to define as soon as possible which economic branches it finds
What changes can be expected when we join the EU? Positive changes will reflect on the broader opening of the Croatian labour market. When Croatia joins the EU, foreign experts will no longer require work permits, which will lead to more knowledge and professionalism. Croatian companies will profit greatly from this if they seize the opportunity. Furthermore, several years after EU accession, Croatia will simplify business and its approach to the financial markets by joining the Eurozone. Exchange risk will disappear, and the cost of debt will decrease, which have been our biggest concerns during the past several months. An additional advantage is that companies will be able to export to the EU market more easily. However, I have to point out that internationalisation will have to be directed towards the East, primarily Russia, the Ukraine, Romania and Turkey as well as the fast growing markets of Russia and Africa.
2 VIEWPOINT
Privredni vjesnik Year III No 0126
( 911 companies
ENZO SMREKAR, DROGA KOLINSKA
When beautiful packaging and advertising are not enough One needs to know how to listen to consumers and put feedback into action lot has changed in the world of consumer goods during the past 20 years. The abundance of products on the market, relentless competition and sceptical consumers who carefully choose between an infinite number of trademarks have forced producers to step out of the crowd with a product which will convince consumers it is special, which will deliver the promised quality, yield profit for the producer, and enable further development. Our Argeta spreads are a good example of successful positioning of trademarks on multiple European markets. The success of Argeta in European markets is the result of several well thought-out plans. The most significant regarded the reorganisation of Droga Kolinska to focus on those trademarks which represent the greatest development potential and market success. First we set a clearly defined goal – Argeta will become the number one spread in Europe. We were also aware that focus on an increase of sales and market share would not suffice, since we had to take into account two major target groups: consumers and owners. Therefore, we invested much money, time and energy into keeping up with trends in the food industry, ensuring high product quality and research in order to find out what consumers think about our trademark. We used this knowledge to create a methodical and consistent communication strategy, not only based on advertising, but primarily on understanding the environment
A
IMPRESSUM: Privredni vjesnik Kačićeva 9 10000 Zagreb +385 1 5600020 uprava@privredni.hr www.privredni-vjesnik.hr/ subscription
penalised for breach of general tax law
OFFENCES IN FINANCE AND ECONOMY
FINANCIAL OFFENCES RISING In 2009, a total of 9,116 offence proceedings were brought covering finance, 14% up over 2008 Igor Vukić n 2009, 8,382 proceedings were instituted against companies for offences covering finance. 7,254 companies were found guilty, according to a report from the Central Bureau for Statistics. In 2009, a total of 9,116 offence proceedings were brought in the area of finance, which is 14% higher than in 2008, when there were 7,801 such cases. Most financial offences (3,965) are related to the obligation of paying VAT. Due to VAT, 3,596 companies were penalised. Additionally, there were customs offences (1,575 charged, 1,228 penalised) and breaches of the general tax law with 911 companies being penalised. For incorrect VAT calculations, 390 companies were charged, and 343 penalised. Concerning offences in the area of finance, a total of 7,051 fines were ruled, and 190 warnings issued. For other offences from the economic area 7,583 companies were charged, with 2,878 cases being found guilty. In 2009, a total of 7,696 companies were charged for other economic offences. This is a slight fall in the number (3%), since there were 7,921 economic offences in 2008.
I
and timely recognition of potential risks. Our goal is to increase awareness that all activities are measurable in marketing. This means that market and financial goals have to palpable since this is the only way to measure them. Listening to consumers and their desires as well as the constant measuring of communication effects has paid off, since over the last 10 years Argeta has achieved incredible results. Today, Argeta ranks number one in B&H, Slovenia, Kosovo and Macedonia according to market share. It ranks number two in Montenegro, Serbia, Austria, Switzerland and Croatia also according to market share. The latest survey conducted by the Valicon agency on 20 trademarks in South Eastern Europe put Argeta in third position (after Coca-Cola and Milka). This puts it next to the great ones and confirms our ambition of becoming the number one spread in the region and Europe.
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
Violation of copyright commonest The most common economic offence relates to the violation of copyright. In this area, 1,441 offences were reported, with 473 being penal-
ised. The violation of price regulation is also highlighted, as well as other regulations on catering activities and tourism. There were 905 with 511 being found guilty.
Around 200 companies charged with the violation of consumer rights Violation of prices in stores related to 841 proceedings, with 300 sentences. Authorities reported around 600 cases of consumer right infringements, with 200 companies found guilty. 368 offence proceedings regarding health and safety of food were identified and 203 companies penalised. 2,312 penalties were handed down covering economic offences, with 333 being warned. For breaches of working relations and regulations on protection at work, 3,365 companies were reported in 2009 with 1,631 penalised. In 1,441 cases, companies were required to pay a fine. The violation of working relations is also rising.
3 SLAVKO BOŠNJAK, CO-OWNER, HOTEL LE MERIDIEN LAV, SPLIT
More direct airline routes for increased tourism and ideal for the budget We are short of winter flights which are crucial for us, especially the connections with Scandinavia and the Russian market Jozo Vrdoljak lavko Bošnjak is an Australian of Croatian origin, and one of the rare immigrants who are successful investors in Croatia. Privredni vjesnik spoke with this renowned entrepreneur about his world-wide investments and problems investors face in Croatia as well as about the prospects and limitations for Croatian tourism. In 1995, the Bošnjak family owned the Westbus transport company in Sydney. It ran 1,200 coaches and was the largest in Australia. In 1999, he sold it to the British company International Express, afterwards investing in many activities. He became known to the Croatian public eight years ago, when he entered into a partnership with Ivica Kurtović regarding the construction of a luxurious five-star hotel Le Meridien Lav in Split, with 381 rooms and suites, a marina and various other services. The partners invested over €82 million in one of the best Croatian hotels which opened four years ago.
S
What results has the hotel Le Meridien Lav achieved this year? The hotel is excellent and much better than in 2009, when we experienced a crisis. We have overcome the crisis and we evaluate this year to be 25% better than the previous one. The season is longer and we are fully booked until the end of November. Does this mean you are completely satisfied? I am not completely satisfied, since we can do much better. In order to achieve better results we need good airline connections with the leading European destinations. It is absurd that the
direct Split-Moscow route was cancelled in mid-September. We are short of winter flights, which are crucial for us, especially connections with Scandinavian and Russian markets. If we had that, we would invest more into marketing to these markets, which, I dare say, bring us the most desired guests. It is a known fact that people with better financial status as well as conference participants have to unwillingly change flights in order to arrive at a certain destination. Will the Hotel Le Meridien Lav jeopardise the opening of several other five-star hotels in Split? On the contrary. It would suit us if such hotels would open as soon as possible. In order to become a destination for conferences, you need to have halls, which we do. The Hotel Marjan will also have them, as well as several other
It is absurd that the direct route Split-Moscow was cancelled in midSeptember
smaller halls in other hotels, and there is also the new sports hall. Sufficient accommodation capacity and built infrastructure are required, which also includes good connections. I must note that Split has revived in a tourist sense. It is no longer a transit city, but a city which tourists elect as their destination. It is understandable that a lot still needs to be done in order to use the entire tourist potential of Split. What does Croatian tourism lack?
Croatia has great potential and a lot to offer. It only needs marketing and consolidated themes. Even though the highway is finished, we are missing investment in railways and air transport. Since money for these projects is missing, I believe the key lies in connecting public and private investors. We are also missing golf courses. Split is short of other services that would attract global sports teams to come here to prepare. Do you intend to invest more into hotels? Last year I would have said no without a doubt. However, after this season I cannot completely disregard this possibility. It is difficult to say what will happen in the future, and it is possible I might soon retire. I have achieved a lot in my career and
it would be a shame not to enjoy myself. What about your other companies? I have a factory constructing coaches in Malaysia which annually produces around 200 units for the Australian market. I employ 250 staff there. I also own a marketing company in Australia. I should soon open a factory producing safe syringes in the USA. The investment is valued at €34 million, of which €14 million relates to equipment and machinery. We planned to open the same kind of factory in Dugopolje near Split, but we will put this €12 million of investment on hold until I see how the American factory operates and the volume of safe syringes it will market on the European market.
4
(
Privredni vjesnik Year III No 0126
US $ 50 million investme mentt scheduled or current in Libya
( 68
cities
will see 120,000 residential units built
CROATIAN COMPANIES STRONG PRESENCE IN LIBYA
The country is a huge construction site Viadukt from Zagreb is building a road with a value of €120 million and is registered with the Libyan authorities for acquiring new contracts. There are already nine Croatian companies operating in Libya and some 500 Croatian workers in the country Igor Vukić ibya is most certainly a vast construction site and for a considerable time now we have been telling construction companies to look for work there, says Joško Mikulić, board president of Viadukt, the company which entered the Libyan market two years ago. They are building a 300 kilometrelong road connecting the cities of Nalut and Ghadames and has a value of €120 million, with the construction being completed in one year. Recently, business opportunities have been discussed in the CCE in Zagreb, which together with the Croatian embassy organised a visit with the representative of the American company AECOM, hired as a consultant for the implementation of various Libyan infrastructure projects. According to Sami Talje, AECOM representative, investment worth at least US$50 million is already scheduled or in process in Libya. Residential neighbourhoods will be built in 68 cities, with 120,000 units accommodating 625,000 people. If they were all in one place, it would be a city bigger than Boston, Oslo or Las Vegas, said Talje.
L
Big investment surge With the money earned from the sale of oil and gas, Libya has started on a huge investment surge. Roads, railway, bridges, a gas network, water supply lines, telecommunication networks, hotels, schools, airports and mosques will be built in addition to residential units. The aim is to achieve a to-
tal urban make-over of the country, turning Libya into new Abu Dhabi or Dubai in terms of investment. Investment has already attracted many European, Chinese and South African companies, although it is difficult to evaluate the need for experienced builders, architects, designers and construction supervisors, said Talje. AECOM is an American consulting company for project management, and the Libyan Housing and Infrastructure Project Board (HIB) hired them as the consultant for the implementation of infrastructure projects. AECOM experts explained to the representatives of 30 Croatian construction companies the basic registration procedures and tender applications for HIB projects. Former experience has been very positive. Had they not been, we would not make an effort to expand the business, says Joško Mikulić. They have had no bad experiences with the local bureauc-
racy or local workers. Around 250 people are now working for Viadukt in Libya; 100 came from Croatia, mostly engineers, technicians and other experts. They hired some 120 Libyan workers, mostly lorry drivers and other construction machinery drivers. They also hired some workers from Thailand. In general, there are many workers in Libya from South and South East Asia, and many are from Egypt, mostly in the construction sector. Joint approach “One of the problems mentioned concerned late payment, mostly as a result of the reorganisation of managing bodies which organise big projects. You need a lot of patience. However, when the job starts and things start to move forward, problems with payment disappear,” stressed Sami Talje. There are currently nine Croatian companies in Libya. In addition to Viadukt, there is Geofizika,
Crosco, Adria mar, Diaput, BCDE Split, TVD Sistemi, Trade Air and Montmontaža. There are about 500 Croatian people working in the country. The need for a joint approach to the Libyan market was also pointed out during the discussion regarding the distribution of expense of establishing a representative office. It is easier to
When jobs commence and things start to move forward payment problems disappear win tenders with local branches, especially if they employ locals. Recently the representatives of AECOM and HIB visited several Croatian construction companies Tehnika, IGH, Viadukt, M-profili, Pjer and Altpro-Atto as well as Team, Međimurje-graditeljstvo and Međimurjeplet.
www.privredni.hr Business & Finance Weekly
5
THE DANUBE STRATEGY
THE RIVER LEADING TO THE FUTURE Croatian priorities are the development of intermodal traffic and connecting the Danube region with the Adriatic coast Lada Stipić-Niseteo he Danube region is the future European macroregion. After the successful development of regional cooperation on the development and preservation of the Baltic, European countries have crossed the EU borders, reaching first for the Black Sea area, and are now working on balancing ideas for the 3,000 kilometre-long area of the Danube. An integrated European transnational approach is designed for this crucial development area. The first proposal has been sent to capitals of the Danube countries, and the entire procedure of balancing should last seven to eight months. Not longer, since it is now familiar with country wants and there are no specific differences in the way the area adjacent to the river should be developed.
T
The locomotive of Europe The Danube is a link between various countries, and could become the locomotive which leads Europe towards success, according to the Germans. They have been gathering ideas for years, all of which are included in the European Danube strategy, pushing them towards achievement. Before becoming the commissioner responsible for energy, the Prime Minister of Baden-Württemberg asked the Euro-
pean institutions to officially recognise the existence of the Danube region, just as they accepted the Northern Dimension of the EU (the Baltic) or initiated a Union for the Mediterranean. Both of the regions regularly receive budget subsidies. The supporters of co-operation adjacent to the Danube do not wish to create new funds, laws or administration (the concept of the three no’s). They wish to define a link between projects of the Danube strategy with cohesion and development funds. Initiatives regularly arrive from Baden-Württemberg to such an extension that Germany was characterised as the “leading force in depicting the importance of the Danube in European institutions”. Romania and Austria also initiated co-operation, and the special board of the Danube regions is similarly active. At the Danube summit in Ulm last year, Danubian countries requested a Danube strategy which would maximise the potential from this resource. Croatian embrace of the initiative Last week at the conference held in Brussels, state secretary for European integration, Andrej Plenković, pointed out what he sees as a parallel in the calendar of adopting the EU strategy for
the Danube region and Croatian ambitions to close negotiations during the Hungarian presidency in the first half of 2011. Plenković believes these are two baselines that Hungary might achieve. The Danube strategy will certainly benefit navigation and harmonise the prevention of floods and pollution. The Hungarian ecological catastrophe is a dramatic confirmation of the vulnerability of the Danube and the need for co-operation. Croatia and other countries of this future macro-region share the same goals: the idea of a
clean and blue Danube as a navigation route which will be linked to the Adriatic Sea, after already linking to the North Sea and the Black Sea, an efficient and safe energy network and the development of entrepreneurship. The macro-regional aspect of the Danube strategy, with clearly defined goals and priorities, will certainly offer a useful structure and concept for future challenges and development potential shared by all countries and people of the Danube region is Croatia’s attitude, which thus embraced the initiative as part of the future.
Croatia links the region with the Adriatic The Danube connects the North Sea and the Black Sea (Rhine-Main-Danube channel), forming a pan-European traffic corridor linked with Corridors IV, V and X. Croatia here is a unique example with a combination of being an Adriatic, central European and Danubian country. It thus contributes to Danube co-operation with a link between the Adriatic and the Danube. With this link, countries which do not have direct access to the sea would be supplied with the shortest and fastest access to sea ports. It is very important to complete the existing corridors in Croatia, modernise rail infrastructure, renew and develop navigation routes, ports on the Danube, Sava and Drava. The multi-purpose Sava-Danube channel, reparation of river banks and river beds, renewal and development of the Sava navigation route are amongst the most important projects for turning the Danube into the locomotive for European development.
6 WE PRESENT IPŠA, ISTRIA
Privredni vjesnik Year III No 0126
OPG BRDNAD, HRVATSKA KOSTAJNICA
Personally produced fruit and vegetables products The family owned business Brnad sells most of its products door-to-door and at markets. Supermarket chains say they do not want to purchase their fruit; even if they did, payment would take too long
Olive oil - synonymous with Istrian life Ipša exclusively produces extra virgin oils winning many prestigious awards live production in Croatia and specifically Istria started to recover more quickly in the 90’s when the state granted subsidies for the renewal of old olive groves and the planting of new ones. It is olive oil that is synonymous with the Istrian life-style and there are an increasing number of Istrian families now producing it. This is how the family of Klaudije Ipša planted olive groves on an area of five hectares in the village of Ipša. However, the family officially started to produce and sell olive oil in 2004 when they founded Ipša. “The catering service was our main activity at the end of the 90’s but due to the fact that olive oil production was increasing as a consequence the sale and distribution of this oil is now our only activity. The company employs two staff and we can safely say it is a family business,” said board member, Irena Ipša.
O
Every year in the L’extravergine guide Although olive oils of varying qualities can be purchased in stores, Ipša produces only extra virgin olive oils (Istrian bjelica, Leccino and Blend). The company is amongst the first Croatian olive oil producers to have an entry in the 2005 edition of the world guide of extra-virgin olive oils L’extravergine and since then it has been included every year. As Irena Ipša pointed out, they
were advised that their oil will also be included in the 2011 edition. The Slow Food Association awarded their Istrian bjelica a maximum grade - the Three Olives award, and was categorised as the best oil made from a single variety. It is also the only Croatian oil that has won this award.
Annual production and sales are 4,000 litres of olive oil Of the many gold medals that Ipša olive oil has received in competitions at Vinistra, Krasica and Maslina, the family Ipša is actually most delighted by the fact that their oil was listed in the top 20 olive oils at Maslina 2010 in Split. They distribute their oils to restaurants, wine shops, oil shops and specialised stores in Croatia. They also export to Austria. Annual production and sales now stand at 4,000 litres of olive oil. However, the biggest problem they face is regarding payment, often finding itself in awkward situations similar to other producers of various local products. “Even though our family has plans to expand our olive groves, we have decided to put them on hold. Our top priority now is to maintain the quality we have achieved and finalise payment of our sales,” notes Irena Ipša. (S.P.)
iroslav Brnad from Hrvatska Kostajnica founded the family owned business in 2002 with the aim of cultivating apples on 2 hectares of land. Over time he expanded production to include the cultivation of plums, exotic kiwano, honey and around 40 fruit and vegetable products. “We have seven varieties of apples, and sell mostly door-todoor or at markets. We cultivate plums on 1 hectare, and we plan to expand this production, which gives between 10 and 12 tonnes in the fourth year.” From the products, his wife produces apple vinegar, various liquors and juices, and they plan to increase the production of honey, says Brnad. He sells kiwano to the company Exotic King from Bistra, which works with various producers and exports exotic fruit to several European countries. They started production with a loan of €20,000 as support for fruit orchards is not overly extensive. The biggest problem facing the business are the big supermarket chains not wanting to purchase fruit and other products; even if they did, payment would take too long. Thus his preference for direct sales.
M
Plans to build cold storage and driers Only he and his wife work the farm, although in the season of pruning and picking, they employ seasonal workers, with friends also helping. Since there are no producers in the vicinity with whom they could associate in the sense of building stor-
age, training and sales, they are forced to look for partners further away, which is very demanding. They work with producers around Zagreb and Velika Gorica and constantly attend training programmes organised by the company Inventivna rješenja from Velika Gorica and the wellknown Slovenian agronomist, Franc Koter. “We have been expanding our knowledge for several years; there is always something to learn. We have demonstration work and experts visit
We have been expanding our knowledge for several years. There is always something to learn. One cannot be a good food producer without training our farm. This costs money, of course, but without training, one cannot be a good fruit producer,” pointed out Brnad. He plans to build cold storage facilities and perhaps even driers for fruit and vegetables, as well as accommodation facilities, areas for tasting juices, liquors, brandies, apple vinegar, honey and honey products. He believes Croatia offers great opportunities for producing fruit and vegetables, and developing rural tourism, but small producers need help on the market. He is currently attempting to unite several of them in order to design a joint brand and approach the market. (J.F.)
www.privredni.hr Business & Finance Weekly
7
CROATIAN FOREIGN CURRENCY MARKET Currency
AUD CAD JPY CHF GBP USD EUR Source: HNB
Kuna exchange mid-rate
EUR
5,183258 5,167545 6,405805 5,448315 8,736942 5,202756 7,330163 WEEK OCTOBER 16, 2010
7.335
USD
5.48
5.28
5.47
7.325
5.26
5.46
7.320
5.24
5.45
7.315
5.22
5.44
7.310 11.10. 12.10. 13.10. 14.10. 15.10
5.20 11.10. 12.10. 13.10. 14.10. 15.10
5.43 11.10. 12.10. 13.10. 14.10. 15.10
::: news
Croatian business people remain the most pessimistic Only 17% of executives in Croatian companies believe that business conditions will improve; a small ripple of optimism considering last year nobody expected improvement usiness people in Central Europe remain careful and cautious, but their optimism regarding regional economic recovery keeps growing, according to the results of the research Business Sentiment Index from the consulting and audit company Deloitte, conducted on 200 people – CEO’s and financial directors in the biggest companies from Croatia, Poland, the Czech Republic, Slovakia, Hungary and Romania, for the second quarter of this year. Croatian CEO’s remain the most pessimistic regarding economic prospects. Thus, 37% believe that the economy will deteriorate over the next six months. Only 17% of Croatian CEO’s feel that business conditions will improve. However, it should be remembered that last year nobody expected any improvement. 40% of CEO’s believe that the future for their companies is
B
positive, whilst only 13% expressed a negative opinion regarding this issue. 78% of those surveyed in Croatia believe that lending sources are available to their companies today, which is doubly more than a year ago. Op-
CHF
7.330
Deloitte’ Business sentiment index research
60% of directors believe employee numbers will remain relatively stable
5.30
Sekerbank takes over Obrtnička štedna banka The Turkish Sekerbank (Sugar bank) will take a 75% ownership stake in Obrtnička štedna banka (savings bank). The Turkish bank will add €5.48 million to the equity and allocate a further €27.4 million in deposits for crediting craftsmen. According to the board president of Obrtnička štedna banka, Suzana Barada, the €5.48 million will create the conditions for obtaining a license to upgrade to a full bank. The investment plan has been approved by the Croatian National Bank, which gave a deadline of October 31st to deliver the necessary documentation. Plodine invests €30 million into expansion The supermarket chain Plodine plans to invest €30 million this year, and anticipates a 10% rise in income over 2009. Last year Plodine generated income of €0.34 billion, some 15% more than the previous year. In 2011, they will open several new facilities and modernise a significant number of existing stores.
timism of Croatian executives regarding payment of outstanding debt is also growing. Now 40% believe claims will settled. However, Croatia is still the greatest pessimist regarding sales income, since 23% predict they will continue to decrease during the next 12 months. This is considerably below the central European average of 15%. Croatian executives are, however, optimistic regarding the possibility of launching new products and services, with 63% believing
that predictions in this aspect are positive. Only 10% of executives think the number of workers will increase, and the majority (60%) believe the number will remain relatively stable. In comparison with the previous quarter, Croatia has registered a negative trend concerning capital investment. The share of optimists in the country has dropped from the previous 47% level to 23%, and only 20% of executives consider expanding business through mergers or takeovers. (V.A.)
Belje takes over 100% of Mlinarstvo The food industry company, Belje, stated that it has signed a contract with Mlinar from Križevci for the transfer of the shares of the company Mlinar Mlinarstvo. This makes Belje the sole owner. Dalekovod Dalekovod stated that the mandatory pension fund Erste Blue purchased a further 10,309 company shares, thereby exceeding 5% of the total number of shares. The Erste pension fund owns 125,000 shares in Dalekovod, which is 5.45% of the construction company’s equity.
8 ::: news Fire-fighting vehicle for explosive areas
Recently the company Dok-ing demonstrated the capabilities of a remote controlled fire-extinguishing machine, the MVF-5. The machine is intended for extinguishing fires in inaccessible areas, such as chemical and oil plants, nuclear power plants, pharmaceutical factories, ammunition stores and other flammable substances and areas. In such situations, access for classic fire fighting vehicles is often not possible without risk to fire fighters. The Dok-ing vehicle, however, can be operated at a distance of 1.5 kilometres. The demonstration was monitored by the representatives from the Russian Institute for Fire-Protection. Vjekoslav Majetić, owner and director of Dok-ing, said that 14 of these vehicles might soon be shipped to Russia. Prices range from €500,000 to €700,000, depending on the level of equipment ordered. Dok-ing had already exported similar machines to Russia, used for extinguishing fires around nuclear plants during the horrendous fires that swept the country earlier this year. JGL exporting to new markets This year and for the second consecutive time, the pharmaceutical company Jadran-Galenski laboratorij (JGL) from Rijeka exhibited at the world’s largest pharmaceutical fair CPHI Worldwide, recently held in Paris. The pharmaceutical fair is visited by 25,000 representatives of the pharmacy industry. JGL is currently operating in 26 markets, primarily Central and Eastern Europe as well as the ex-Soviet Union, and from 2010 Kuwait, Turkey, Lithuania and Yemen, where first shipments have already been sent. According to first indications, this year the CPHI fair was more successful than last year in terms of establishing contacts.
Privredni vjesnik Year II No 0126
AMBIENTA, 37TH INTERNATIONAL FURNITURE, INTERIOR DESIGN AND SUPPORTING INDUSTRY FAIR
Investment crucial to ensure the future In terms of import/export balance the Croatian timber industry is generating a surplus which totalled US$176 million over the first eight months Krešimir Sočković he timber industry is on the road of recovery according to the positive trends during the first eight months of 2010. However, it is still necessary to invest in this sector in order to enhance competitiveness. The Croatian timber sector has local quality raw material, which needs to be transformed into its competitive advantage with the help of technology, know-how and innovation. This is the conclusion of the Business Club Potential of the timber industry and forestry sector in the recovery and economic growth, held in conjunction with the 37th international furniture,
T
Over 500 exhibitors at Ambienta 2010 interior design and supporting industry fair Ambienta. The Business Club is a traditional assembly of entrepreneurs from the wood processing and forestry sector and representatives of the government and authorised institutions. It is organised by the Croatian Chamber of Economy, the Ministry of Regional Development, Forestry and Water Management, the Faculty of Forestry and Zagreb Fair. Exports are growing During the first eight months exports by the timber industry increased over 10% over 2009. Imports decreased by 20%, said the president of the Wood Processing Industry Association at the CCE, Zdravko Jelčić. A positive trend has also been recorded in the production of furniture, where exports increased by 13%, and imports decreased by 20%. This is an encouraging trend and needs
to be encouraged, as well as the fact that the timber industry is generating a surplus, which totalled US$176 million during the first eight months, noted Jelčić. The timber sector has a competitive advantage due to available local raw materials. However this advantage needs to transform into market competitiveness, which requires investment, primarily into technology, knowhow and design, points out Damir Novotny, economic analyst. The state needs to support this sector by changing the economic and fiscal policy which will benefit the total production industry, especially exports. The timber in-
dustry would need €27.4 million in state support each year, but the current amount is €8.9 million, estimated Novotny. Moreover, producers are concerned by the fact they are losing roughly €54.8 million per year on exchange rate differences. CCE President Nadan Vidošević believes this declarative support of exports needs to become real and concrete. “In this respect we need to look even harder for market niches to position ourselves in. It is necessary to distribute the forestry sector more rationally, focusing on the commercial exploitation of wood,” opines Vidošević.
The beginning of optimism Ambienta is the biggest fair project for Zagreb Fair in 2010, evaluates the director of Zagreb Fair, Mirela Bartolec. Over 500 exhibitors participated at Ambienta 2010. “The fair is a place where the most important representatives of the timber processing industry meet. It therefore has an abundance of expert assemblies, the most important one being the Business Club, a traditional meeting of the government and timber sector representatives,” added Mirela Bartolec. The project Wood Is Good was represented at the fair in the sector for agriculture, food industry and forestry in the CCE with supporting activities which the Croatian timber industry implements with the aim of raising public awareness, the use of wood and sustainability of forestry. As the heads of the activity point out, according to the latest research, there are 40% of people who would like to live in a wooden house. However, over 60% believe they lack information about wood, wood products and primarily, Croatian producers.