PV International 0129 by NEstar

ELECTRONIC COMMUNICATIONS Broadband Internet access increasing but Croatia is still behind the EU average

Jerko Jelić Balta, President, Plinacro Board New gas supply pipeline will end the final phase of construction

Constructions for production Grapes and olives are ready for harvesting but the wineries and oil refineries are suffering problems

COMMUNICATIONS MARKET

INTERVIEW

AGRICULTURE

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Croatian Business & Finance Weekly Established in 1953 Monday / 8th November / 2010 Year III / No 0129 www.privredni.hr

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pvinternational pv international C R O A T I A N

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CROATIAN EXPORTERS

LEADING CROATIAN EXPORTING COMPANIES

Croatian exporters require HBOR to provide financing for international customers with an interest rate below 3.5% Igor Vukić roatian exports increased by 14% this September, with the processing industry showing the largest increase at 15.7%. Despite exports showing a surplus of €0.75 billion, it has only reached the level that the Croatian economy stood at in 2006, pointed out Darinko Bago, President of Croatian Exporters, at a conference on export policy. The pharmaceutical industry, together with furniture, leather and machinery production should, according to Bago, become leading Croatian exporters. The wood and timber industry, shipbuilding

as well as the chemical industry also show promising results, providing that the required reorganisation is implemented. If exports are to show a further increase, Croatian Exporters require that the Croatian Bank for Reconstruction and Development (HBOR) provides €68.5 million per annum over the next decade. No financial help for lossmaking companies In addition, HBOR is also expected to introduce loans for international customers with an interest rate below 3.5 % for a period of 10 years or longer.

Croatian Exporters believe support should be provided for high-tech products rather than to loss-making companies. The Croatian Competition Agency needs to investigate the problem of imported goods whose manufacture has been supported with a too high level of subsidies in the country of origin. In addition, the implementation of the strategy on the Croatian Export Offensive should be resumed with the help of a task force whose members coming from relevant departments, would discuss export issues on a monthly basis and submit their report to the Croatian Parliament. Croatian Exporters

supports not only export activities but also CEA (Croatian Employers’ Association) and CCE suggestions on improving the current general economy in Croatia, concludes Bago. Đuro Popijač, Minister of Economy, Labour and Entrepreneurship, points out that the Directorate for Economic Diplomacy, Exports and Investment has been established within the relevant ministry in order to develop the corresponding diplomatic network. Popijač expects the amount of export support to increase as this was applied to more than 1,000 companies during 2009.

2 VIEWPOINT

Privredni vjesnik Year III No 0129

NEVEN BADURINA, DIRECTOR, OSTREA FISH PROCESSING COMPANY

Regulatory change a necessity If additional subsidies are released from EU funds, regulations introduce a problem as one company cannot reapply for additional funds strea was founded 12 years ago in an improvised factory and employed only 50 people at the time. The modern facilities, constructed through funding by the Croatian Bank for Reconstruction and Development (HBOR) and a €10 million non-refundable loan from the SAPARD programme, today employs 260 employees and production has increased from 500 to 4,500 tonnes. It is the largest and most sophisticated fish processing company in Europe. Its final products are of high quality, supported by the fact that they are exported to 30 countries and together with its Italian partner Ostrea has more than 50% of the Italian anchovy market.

Ostrea is the largest and most sophisticated fishprocessing company in Europe

The construction of the new facilities has been accompanied with sale of Ostrea products on the local market in many chain stores. Further development of manufacturing capacity should make Ostrea the leading Croatian factory in the fish processing industry. In order to achieve this goal, additional EU funds would be more than welcome. However, the existing regulations impose a problem and need to be changed as soon as possible since the curIMPRESSUM: Privredni vjesnik Kačićeva 9 10000 Zagreb +385 1 5600020 uprava@privredni.hr www.privredni-vjesnik.hr/ subscription

ELECTRONIC COMMUNICATIONS MARKET

Mid-level dev upper limit Boris Odorčić ue to the liberalisation of the Croatian electronic communications market, operators have for several years been trying to find the right way to reach final customers. Although some have been quite successful, others are still trying to claim their share of the market through various special offers, market research and advertising. Experts believe that Croatia, with its sound heritage, has established the solid technical foundations for further development. In addition, Croatia has never been isolated in terms of the application of new ICT solutions. However the liberalisation of the telecoms market is not as dynamic as first expected. When considering individual segments of this fast-growing sector, the Croatian Post and Electronic Communication Agency (HAKOM) management believes that the Croatian electronic communications market is characterised by extensive development in broadband Internet access. In addition, public land-line services have seen a decrease, which is a global trend. The mobile operator market is saturated whilst demand for data services as well as broadband Internet access via mobile networks shows an increase. The Croatian electronic telecommunications market has, according to HAKOM, reached the upper limit of mid-level developed countries.

D rent model does not allow for the application for more significant funds. This in particular, reflected on Ostrea business activities. An additional €6 million should be invested in production. However, current regulations exclude funds being invested in existing export quotas, but in a completely new programme. The Veterinary Administration Office within the Ministry of Agriculture, Fisheries and Rural Development, issues the required control number. If a company wants to be listed as an exporter, certain food regulations must be met. The proposal and guarantee of the Croatian authorised office are then registered in the importing country, and only then can the actual export take place. Hence, if a company is to reapply for funding, it should be registered as another firm. The number granted to Ostrea has already been “used” since it has already received SAPARD funding and therefore cannot apply for IPARD programme funding.

FOR PUBLISHER Nikola Baučić +385 1 4846661 uprava@privredni.hr

IMC MANAGER Dea Olup +385 1 5600028 olup@privredni.hr

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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

Switched roles of land-line and mobile services The basic presumption for further growth and the approach to developed markets includes in-

Despite the increased use of bro tions in Croatia is still behind th vestment into high speed network access, based on the application of optical fibre (FttX) which are to provide advanced electronic communications services. Despite the increased use of broadband Internet access, the number of individual connections in Croatia is still behind the EU average. Hence, further development of broadband Internet access is just one of the requirements for the development of a knowledge-based economy and the reduction of the digital divide within Croatia and in relation to

“

Croatia has never been isolated in terms of the application of new ICT solutions

”

eloped countries to reach for B2B users. EU membership will probably reduce international roaming prices for the users of Croatian mobile phone operators when abroad, as the regulation of these services at the EU level will also impact upon Croatia,”, points out HAKOM.

oadband Internet access, the number of individual connece EU average EU members. On the other hand, the Croatian electronic telecommunications market cannot anticipate any further increase in income and a larger number of final users unless existing services expand. Hence, HAKOM believes mobile phone operators should offer more advanced services in order to increase their income level. One of the trends Croatia is currently facing is a switch in the roles of mobile and land-line services. “Although this trend will probably continue, it is not expected that it will significantly

Operators need to provide more advanced services to grow additional income decrease the share of land-line connections in Croatia, especially when considering that a landline is a necessity for access to broadband Internet. In addition, the convergence of services in land-line and mobile phone networks provides final users with joint services, although mostly

Development of framework for further investment HT, the leading Croatian provider of telecommunication services, also expects the broadband Internet access is to increase. “More than 50% of Western European households had access to broadband Internet several years ago, but only around 30% of Croatian households can boast the same. The main precondition for its development is the construction of an optical network infrastructure which requires a regulatory framework, as this would attract further investment in the sector”, according to HT. When considering telecommunications services, the concept of classic services slowly disappears. Both final users and operators require access to all content at any time or place, via laptops or mobile phones. “Mobile phone Internet access is expected to grow and it is only a question of time when all users will be able to access Google or Internet via mobile phones”, says HT, which also believes that the Croatian telecommunications market as a whole is as developed as its European counterparts. In these terms, it is of utmost importance to ensure the framework for further investment which will avoid a gap between Croatia and the more highly developed European countries. Tomislav Makar, the Director of Access Network Development in

Vipnet, believes the Croatian telecom market is currently undergoing a difficult period, influenced not only by the current global financial crisis but also by the 6% tax imposed by the government on mobile services profits. “In order to stabilise the industry and present Croatia as a safe destination for foreign investment, we expect this tax to be rescinded as it is contradictory to EU principles by burdening only one part of the market”, comments Makar. Applications to change perception Mobile networks, according to Makar, are becoming more oriented towards data transmission. Hence, new trends will require more significant investment into new generation networks, which will be able to transfer larger quantities of data. “Almost 50% of mobile telecom traffic worldwide relates to data transmission and is expected to reach 90%, mostly due to the use of laptops, smart phones and innovative tablet or pad devices. The investment dynamics of Vipnet is oriented towards such segments which are expected to show the highest growth rate, such as wireless broadband. In addition, land-lines are expected to be replaced entirely by mobile communication. However, the number of operators as well as the infrastructure in the European markets should be consolidated. Applications will certainly find their place on the market and change user perspectives of mobile phone services”, believes Makar. Tele2 Croatia also believes that the Croatian mobile Internet market will continue to grow. It specifically relates to accessing social networks, such as Facebook, Twitter, My Space and YouTube via mobile phones.

4 INTERVIEW

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Privredni vjesnik Year III No 0129

a further € 370 million to be invested by end 2014

Jerko Jelić Balta, President, Plinacro Board

New gas supply pipeline will end the final phase of construction After more than 30 years and only one interconnection with Slovenia, Croatia will gain access to a second natural gas supply pipeline which will both alleviate the capacity of current imports via Slovenia and Austria and allow additional gas imports Boris Odorčić linacro invested €210 million into further developing the gas transmission system since 2007. By the end of 2014, a further €370 million will be invested in the construction of a 2,775 kilometre long natural gas pipeline. Jerko Jelić Balta, President of Plinacro Board, emphasises that this will allow the transportation of 1.2 million m3 of gas per hour, or 5.5 billion m3 per year, which will cater for the needs of all consumers in Croatia.

What is the situation on the gas market on the eve of winter? As usual, Plinacro will undertake all the required technological measures in order to ensure safe and reliable gas transportation, which means that the gas will be delivered to consumers by their supplier. Even in the extreme gas consumption period in the coldest winter days, the capacity and technical availability of the Plinacro transportation system have proved to be the strongest links in ensuring g a s

supplies. The same applies to its storage system. What are the latest developments in the construction of the Hungarian-Croatian Gas I n t e rc o n n e c t i o n ? Given that the construction of the Interconnection gas pipeline between Croatia and Hungary is the most important project in 2010, all work on the Croatian side have entered their final phase. The construction of the interconnection will be complete by the end of the year and will be opened in early 2011. After 30 years of using the sole existing interconnection with Slovenia which was opened in 1978, Croatia will gain access to a second natural gas supply pipeline, which will

alleviate the capacity of existing imports via Slovenia and Austria. This will also allow the import of additional gas supplies from Baumgarten, Austria, which is the largest gas trading centre in Central and South-Eastern Europe. What can you tell us about the development of the largescale projects such as the LNG Terminal, the South Stream pipeline project or the Ionian-Adriatic gas pipeline? In line with the implementation of the Energy Sector Development Strategy in Croatia and with a view to diversifying supply directions and natural gas sources, Plinacro will continue to develop large-scale projects (LNG Terminal, the South Stream pipeline

project, the Ionian-Adriatic gas pipeline for connecting with gas supply systems in the area), so that the government can make a final decision in the best interests of Croatia. What is Plinacro’s attitude towards potential new suppliers? As a national operator of the gas transportation system, Plinacro welcomes potential new natural gas suppliers to the Croatian market, as it is in line with the principles of market liberalisation and increases the efficiency of Plinacro’s transport capacity. On the other hand, we provide a public gas transport service in a non-discriminatory and transparent way and treat all our beneficiaries equally in compliance with our legal obligations.

www.privredni.hr Business & Finance Weekly

CROATIAN-INDIAN INVESTMENT SEMINAR

The Indians looking for business partners Future co-operation possible in electrical equipment, oil and gas industry, petrochemicals, textiles, pharmaceutical industry, tourism and ship construction ndian companies Tata Group, Larsen & Toubro and ACG Worldwide employ more than 300,000 people and their income reached the level of half of Croatian GDP. Their representatives visited Croatia recently with the aim of investing into the Croatian economy. They presented their ideas on investment, joint-ventures, takeovers or production in Croatia for the European market at the CroatianIndian investment seminar organised by the Croatian Chamber of Economy, the Ministry of Economy, Labour and Entrepreneurship and the Indian Embassy to Croatia. India is very attractive to investors and its big market potential is reflected in half a billion middle-class consumers, Indian Ambassador to Croatia Pre-

deep Singh said. “It is important to identify fields for economic co-operation and investment potential. Co-operation is possible in the fields of electrical equipment, oil and gas industry, petrochemicals, textiles, leather products, the pharmaceutical industry, tourism, ship construction, construction and food-processing industry”, added Singh.

said Sunčanica Skupnjak Kapić, International Relations Director at the Croatian Chamber of Economy. “Total foreign trade between the two countries amounted to almost US$157 million, of which Croatian exports stood at only US$32.4 million, whilst imports from India were almost four times higher”, Ms Skupnjak Kapić said. Ms Gunveena Chadha, Director of the Confederation of Indian Industry, cites joint-ventures as a potential area of co-operation between Indian and Croatian companies, with investment desirable into infrastructure, energy production, the production of car parts and components, and the pharmaceutical and food-processing industries. (K.S.)

Imports four times higher ”Last year, Croatia mostly exported electrical motors and generators, turbojet engines, boards, counters, tables, cupboards, antibiotics and electronic signalling equipment to India, and imported coffee, shoes, bed clothing, table clothing, toiletries and kitchen clothing, medicines and heterocyclic compounds from India”,

Croatian-Swedish Business Forum

EXPORTING TO SWEDEN Information on how to enter Swedish market provided by the Swedish government eeting representatives of Swedish companies was beneficial as, from our experience, it is quite difficult to enter the Swedish market, said Branimir Alujević, director of PC Engineering in Dalekovod, at the Croatian-Swedish Business Forum organised by the Croatian Chamber of Commerce in co-operation with the Croatian-Swedish Chamber of Commerce, the Croatian Embassy in Sweden, and the Swedish Embassy in Croatia. ”Before establishing co-operation with the Swedish company, SAAB, three years ago, it was very difficult to discuss business opportunities as the Swedes knew very little about Croatia, which is facing other problems. Despite having successful companies and welleducated people, it is sometimes not easy to present the country abroad. In principle, I am happy with the latest developments, but it would be very useful if we could present our ideas to foreign business partners at a higher level”, said Alujević.

Swedes outnumber Croatians at the Forum About 50 Swedish companies and about twenty Croatian companies participated in the Forum, and HGK president Nadan Vidošević

stressed that there were good chances for some new investments and joint ventures, for example through an offset programme. “Croatian Adriatic ports could become an excellent communication channel and corridor from the Mediterranean towards Europe, but also towards China and India in particular, and it could be a brigde between other countries in the region and the rest of Europe”, said Vidošević. Sonia Albarello, Executive Director of Open Trade Gate Sweden, presented the agency established in 2004 by the Swedish government as a one-stop informa-

tion centre assisting exporters from developing countries. The Agency provides exporters with important information, organises workshops in Sweden and abroad, aims to overcome trade barriers and provides technical assistance. The seminar How to Do Business in Croatia was organised for representatives of Swedish companies in order to gain insight into the legislative framework, investment opportunities in Croatia, foreign investment in the past, statutory exemptions for foreign investors and projects aimed at attracting inward investment. (J.F.)

Privredni vjesnik Year III No 0129

CROATIAN FOREIGN CURRENCY MARKET Currency

AUD CAD JPY CHF GBP USD EUR Source: HNB

EUR

Kuna exchange mid-rate

7.36

5,255976 5,168678 6,436613 5,42887 8,407756 5,199048 7,344175

Geofoto to provide services to JANAF and Agricultural Payment Agency Geofoto, one of the leading European companies in the area of geodetics and geo-information, has signed contracts with Jadranski naftovod (JANAF) and the Agricultural Payment Agency, for €1.78 million. The JANAF contract, which has a value of €0.41 million, regulates Geofoto services in the area of ortho-photographic monitoring – the periodic restoration of digital orthophotographic (DOF) maps for all JANAF routes. In addition, Geofoto has signed a contract with the Agricultural Payment Agency for €1.37 million to provide services for the initial vectorisation of agricultural areas on DOF maps. Unemployment and production both up The total number employed within Croatian industry decreased by 0.4% this September in comparison with August and showed a decrease of 6.3% over the same period in 2009. However labour productivity increased by 6.8% in the first three quarters of 2010 in comparison with the same period of the previous year. Statistics for specific areas of activity show that the greatest reduction in numbers employed for September was in the mining industry HOK and HZZ as employment partners Mato Topić, President of Croatian Chamber of Trades and Crafts, and Ankica Paun, the Senior Manager of the Croatian Employment Service, recently signed an agreement on business co-operation. The agreement regulates mutual co-operation in the areas of economic development, unemployment reduction and encouraging employment.

5.32

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CHF

5.43

7.35

5.28

5.40

7.34

5.24

5.37

7.33

5.20

5.34

7.32

5.16

5.31

7.31 1.11.

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4.12 1.11.

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CROATIAN NATIONAL BANK

Money available on savings accounts September figures show €18.7 billion has accumulated in savings and fixed-term deposits, an increase of €0.89 billion in comparison with the end of 2009 espite the global financial crisis, decreased consumption, reduced interest rates for new deposits in local and foreign currencies and budgetary planning, Croatian individuals still manage to save, as shown by the increasing number of private deposits in Croatian banks. September figures, published by the Croatian National Bank, show €18.7 billion has accumulated in private savings and fixed-term deposits, an increase of €0.89 billion or 5% in comparison with the end of 2009. If current accounts are also considered, private individual assets within banks amount to €20.77 billion.

Dominant population According to figures published by the Croatian National Bank, private savings are still dominant in the total savings structure as some 75% of all savings and fixed-term deposits in commercial banks relate to this particular segment. Foreign currency savings remain more popular as more than €16.03 billion or some 86% relate to foreign currency deposits and €2.66 billion or 14% of all deposits are in local currency. The Euro, with an 81% share of savings and fixed-term deposits is the prime currency with deposits in kuna standing at 12.3%. Most private funds in Croatian

banks relate to fixed-term deposits, totalling some €16.05 billion or 77.3%. However, savings and deposits stand at €2.64 billion or 12.7%. Funds on cur-

rent accounts exceeded €2.05 billion at the end of September, representing 10% of total private funds in Croatian banks which stood at €20.77 billion. (V.A.)

www.privredni.hr Business & Finance Weekly

WE PRESENT 7

HOTEL PODRAVINA, RASINJA KOPRIVNICA

RECIRCLE, ZAGREB

2D, 3D and stop-motion animation all available The production market has also felt the recession but Recircle remains optimistic as all indicators point to a constant expansion of media ven though 3D film is technologically as old as 2D, many still see it as something new. The main reason for that is that 3D is still quite rare; of all the films produced worldwide since the Lumière brothers only several hundred of them were made using 3D technology. 3D film production requires considerable investment into equipment. Thus the first Croatian 3D film was made only a few months ago, produced by Zagreb-based company Recircle, headed by Denis Valentić, creative director, Zvonimir Mikšić, film director, and Miljana Dragičević, producer. The film “Time Machine”, in which more than 160 characters retell the history of Dubrovnik, lasts 12 minutes. Recircle is a production company whose clients include media houses and leading advertising agencies. Apart from advertising production, their activities include production and animation in 2D and 3D, as well as design. They have been awarded several international prizes, such as the Silver Bra Magdalene award.

An active vacation paradise Hotel owners plan to capitalise on the comparative advantages their hotel and the Koprivnica area have to offer in order to so that the town becomes a popular conference destination oprivnica is not only famous for its food and pharmaceutical industry, but also for its growing tourism potential that is becoming more attractive on both local and international markets. The main tourist centre in the area is the Podravina Hotel, as its accommodation capacity and menu of local Podravina dishes and drinks can cater for the needs of Croatian and foreign guests. “The Podravina Hotel has 60 rooms, and further investment in additional accommodation capacity and conference rooms are planned due to increasing interest”, according to Boris Dvorski, hotel owner. Bearing in mind the importance of conference and incentive tourism and the purchasing power of conference guests, the hotel owners plan to capitalize on the comparative advantages their hotel and the Koprivnica area have to offer to ensure Koprivnica becomes a popular conference destination. The Tourist Recreation Centre, situated in the vicinity of the hotel, is also owned by Mr Dvorski and offers a wide range of tourism opportunities. Rasinj is an active vacation paradise, with its numerous vineyards, orchards, forests, and

particularly the lake and fish ponds. “Many Croatian and foreign tourists enjoy the fishing, and those who prefer culture and religion can visit the castle that belonged to the Inkey family in the 19th century, and the Parish Church of St Cross”, Mr Dvorski mentioned. Koprivnica regional gastronomy Throughout the year, Rasinja hosts many different events, including cycle and motocross paths for adrenalin-tourism fanatics, including cyclists and motorcyclists from Croatia, Slovenia, Austria and Hungary. A special attraction of Rasinje is an estate with a farm and wild animals. The nearness of Kalnik and the Bilogora hills with hiking paths and wild species is more attractive to the hikers and hunters, and the tributaries of the Drava River offer the opportunity for different types of river tourism. “Apart from the natural beauties of the Koprivnica region, the Hungarians also enjoy the river delicacies. This is why we opened a Fisherman’s House. As a result the tourist recreation programme of the area is now complete”, Dvorski concluded. (S.P.)

Global village At the end of November, Recircle will mark its 10th anniversary, pointed out Miljana

Dragičević. In the early days of the company, their main area of expertise was in design and new media, but only two years later they expanded into the video and production fields. There have three permanent employees, but the full Recircle team consists of ten or more contractual employees, depending on the project. In addition to regional co-operation with colleagues from Slovenia, Bosnia and Herzegovina, Serbia and Macedonia, Recircle has established good co-operation with film professionals from America, Australia, Britain and Poland. Fortunately, as Ms Dragičević emphasised, highspeed Internet and the meeting of minimum technical conditions make film collaboration possible anywhere, regardless of distance. The production market has also felt the recession, but Recircle remains optimistic as all indicators point to a constant expansion of media. Due to new media enabling high resolution digital image transmission and the switchover from analogue to digital television which will undoubtedly result in the expansion of their product range, the Recircle team believes there is significant demand for film and video productions. (D.Ž.)

Privredni vjesnik Year II No 0129

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€ 1.5 million investment planned by Rizman in winery construction

CONSTRUCTIONS FOR PRODUCTION

Grapes and olives are ready for harvesting; wineries and oil refineries are not

Croatian regulations view wineries and oil refineries as industrial buildings so their construction in the coastal zone is not allowed Jozo Vrdoljak any years ago some entrepreneurs from the Croatian coastal region leased farmland owned by Hrvatske šume (Croatian Forests), in order to prepare permanent plantations of mainly olives and grapes. As EU regulations require that top-quality vines are to be bottled on the vineyard of growth, some of them planned to construct farm houses on their plantations. However, this has caused a major problem. Some the entrepreneurs who signed contracts with the Ministry of Agriculture, Fisheries and Rural Development, were permitted to construct farm houses whilst others were not, one of whom was Jurica Kapović.

Confusion Croatian style “I cannot understand why the Croatian government allows the construction of outhouses for some entrepreneurs and not for others. Personally, I planned the construction of an oil refinery on my olive farm to produce extra virgin olive oil, but was denied a

permit to construct it within the farm”, says Kapović. Mihovil Štimac, director and co-owner of Rizman, believes the main problem lies in the definition of a particular plot of land. “If a plot is leased for the purpose of growing permanent crops, such as olives and grapes, it cannot be defined as woodland but as a farm. On this basis, we require necessary changes to the Act on Farmland as well as the regulations on the construction of outhouses. It primarily relates to the construction of wineries, oil refineries and storehouses for farm machinery and the development of agro-tourism”, emphasises Štimac, adding that wineries worldwide are mainly situated within the specific vineyard. “We requested a permit to build on a site 1,300 meters from the coast and the protected coastal region. However, the Ministry of Environmental Protection, Physical Planning and Construction refused to grant a permit since the plantation was considered to be situated in a woodland area”, adds Štimac whose company has already invested some €2.5 mil-

lion in the vineyard with plans to invest a further €1.5 million into the construction of outhouses and additional buildings. Differing interpretations Davor Meštrović, owner of Poljopromet from Opuzen, signed a contract which foresaw the construction of outhouses or a vinery on his plantation. However, he was denied a permit. According to Meštrović, the head of the district where his vineyard is situated, required a written

One authorised institution will often send an entrepreneur to another institution which is aggravating

explanation from the Ministry of Environmental Protection, Physical Planning and Construction, which has not yet arrived. Meštrović requested the explanation in person. However, he was told to visit the County Office for

Physical Planning and the relevant offices in Metković. “To date I have invested €1 million in my vineyard, which is currently bearing the first grapes which I will have to process elsewhere as I cannot construct appropriate outhouses”, points out Meštrović. He stressed that the ‘relevant offices’ never give exact answers but merely refer backwards and forwards to each other. Marija Mrgudić, a winemaker and her partner, American entrepreneur Robert Benmosch, have bought land and so far have invested €2 million into the land purchase and an additional €1 million into the vineyard whilst a further €1.5 million is planned to be invested in the winery. “The major problem is that Croatian regulations consider wineries as industrial buildings but no economic activities are allowed in the coastal region. A change in the relevant regulations is an absolute priority, since wineries and ironworks are not one and the same thing. However, both can only be constructed within industrial zones”, points out Mrgudić.

Privredni vjesnik Year III No 0129

CONFERENCE TOURISM

EXPERIENCE AS IMPORTANT AS NEW IDEAS Croatia setting trends in conference organisation, according to Zlatan Muftić Sanja Plješa onference tourism, as a very complex concept, comprises a variety of activities and reasons for a businessperson to visit a certain destination. Conferences, business meetings, various workshops, seminars and symposiums generate considerable income to the specific town as well as the whole country. Unfortunately, a unique model which would show the expenditure of all business visitors in Croatia is still non-existent as current figures show only data on business visitors staying in luxury hotels. Conference tourism is an integral part of other types of tourism as businesspersons usually use a range of services offered, such as visiting concerts or restaurants amongst others. Such tourism is one of the most profitable and most rapidly growing branches within the tourism industry, accounting for more than €30.14 million profit in Croatia on an annual basis. “Such visitors are prone to spend more than the “ordinary” ones, who visit Croatia on holiday. Businesspersons spend more money on additional services as their company has provided them with funds for accommodation. The level and style of such form of tourism is formed according to the general state of the economy in a specific country destination. Croatia is on the verge of setting trends in conference organisation, as its proposals have been present on almost every international tourism market.

50% of all events held in Zagreb Today, Zagreb is as competitive as Vienna, Graz, Prague and even Bangkok, especially if the organisation of large conferences is required”, says Zlatan Muftić, Head of the Za-

greb Convention Bureau at the Zagreb Tourist Board. Conference tourism does not comprise of the country solely as the convention centre, but a specific region or town. In addition, any destination should meet certain prerequisites for the preparation of the event, such as good transport and accommodation infrastructure as well as a sufficient number of hotels and conference facilities. Zagreb, Dubrovnik, Split and Opatija with Rijeka are considered as the main

conference destinations in Croatia, according to Muftić. Although the construction of the Zagreb conference venue has not been finished yet primarily due to the global financial crisis, the Croatian capital still welcomes 50% of all events. Figures for the first half of 2010 confirm that 1,233 events of 2,587 were hosted by Zagreb. In 2009, some 2,648 events were held in Croatia, of which 1,216 were centred on Zagreb.

::: news €630 million investment for HŽ-Infrastruktura In the first nine months of 2010, HŽ-Infrastruktura generated a profit of €0.68 million, with government budget support being reduced by €12.74 million. Liabilities also show a reduction of €14.79 million, with payment terms reduced to 50 days. In addition, HŽ-

Infrastruktura management has identified the provider of a new €630 million loan to finance current and future investment. Kandit Premijer plans to manufacture 75,000 tonnes of sugar Kandit Premijer, the Osijek based sugar refinery, has managed to process 330,000 tonnes of sugar-beet as planned for

2010. It is expected that the sugar refinery will manufacture some 75,000 tonnes of sugar although management expects a slightly reduced amount. Dubrovnik host to 12% more tourists Dubrovnik registered a total of 563,751 tourists in the first ten months of 2010, an increase of 12% when compared with

the same period in 2009, with the number of overnight stays totalling 2.1 million or 14 % more than in the previous year. 93% of all visitors came from abroad. According to the Tourist Board statistics, 522,539 foreign visitors were registered in the first ten months of 2010, an increase of 14% when compared with the same period of 2009.